Get the most important digital marketing news each day.
An expert on loyalty programs has a warning for blockchain startups
If you’re thinking of setting up a universal currency exchange for loyalty points, says a marketing exec, you’re working against the interests of brands.
A variety of blockchain startups, such as the Lichtenstein-based DigitalBits Project, are looking to employ the protocol’s tokens to reinvent loyalty programs.
Many of the startups envision a marketplace where loyalty points become a kind of cryptocurrency, exchangeable between the loyalty programs offered by brands.
In most cases, brands would have to participate in the marketplace, supposedly because it makes their rewards more valuable. Many loyalty points reportedly go unredeemed.
But, says one loyalty program expert, such universal loyalty currencies are a bad idea for brands.