In the world of blockchain and web3 tech, the real builders are working to create true utility for consumers and organizations by leaning into the many benefits of this technology. While some sectors rise to the top in terms of media coverage, such as gaming, finance, and cryptocurrencies, one of the most important areas that is being explored, and will impact huge audiences in the future, is in loyalty programs. To move beyond intra-brand walled gardens, however, interoperability of loyalty programs and its token/voucher systems is a must.
In a previous post I described how, in the gaming industry, interoperable tokens represent a huge opportunity for portfolios of games to incentivize game discovery, allow cross-promotion to players, increase retention in an ecosystem, and reduce churn with meaningful offers. These benefits are on top of the players’ desires to use their hard-earned in-game tokens across products when they want to try new experiences.
This idea of tokenizing rewards and driving brand/ecosystem/portfolio loyalty is the crux of Web3 loyalty programs. But the special sauce is in interoperability, where brands can explore target-rich environments in a trusted, anonymous, spam- and scam-free environment… with meaningful benefits for their audiences.
Value From One Brand To Another (And Back Again)
The transfer of value within a brand is clear… A single hotel example: upon check-in, get a voucher for free martini at the bar. At a chain: receive a 25%-off dining voucher at any Westin Hotel restaurant. The system can also allow value from an expiring coupon to be transferred to a new offer.
The transfer of value between (non-competitive) products or services is a supercharge opportunity for these brands. It enables consumer exposure between brands that share target audience characteristics, incentivizes discovery of products and services, and rewards loyalty. It would not require time-consuming brand team meetings between companies, as the data illuminates segmentation, demographic, psychographic, and behavioral information to allow brands to access and drive loyalty promotions in a targeted manner.
The back-end to this process must be invisible and seamless to the consumer, and provide benefit to consumers and brands. It should feel “familiar” (everyone knows loyalty programs) including the widespread adoption of digital wallets to manage loyalty vouchers. The tech also has to account for the token marketplace, specifically balancing exchange rates or transfer pricing between brands, accounting for the inception point of tokens and consumer wallets, evaluating the value of consumers from one brand to another, and more.
Blockchain technology not only enables interoperability within and between brands, but the technology provides an immutable, distributed ledger in the background to securely account for all transactions and movement of loyalty tokens along the chain. It also verifies the details of transactions and users, plus provides meaningful data points at all stages.
As a result, loyalty offers and exchange rates can be tweaked on an ongoing basis to optimize incentives directly to specific audiences, promote consumer discovery of new products and launches, and create targeted promotions and campaigns. Analytics of wallet-level activity provides the ability to further hone in on valuable clients. Moreover, Web3 loyalty systems increase margins by reducing fees going to advertising intermediaries such as Facebook and Google, or to bot army audiences.
All this WITHOUT the burden of Personally Identifiable Information (PII). Perhaps the most important benefit is in the ethical brand-to-consumer relationships – underpinning Web3 loyalty is privacy and user control. In some instances consumers can even choose to sell their data.
Why Blockchain vs. Traditional Methods:
- Efficiency – brands do not have to deal with numerous, costly, inaccurate middlemen in digital advertising
- Full auditability; shared ledger system verifies transactions and target audience attributes, behavior
- Control digital marketing waste; low CAC vs. other methods
- PII liability management – anonymous wallets do not track or share sensitive data associated with user identities
- Provides direct-to-consumer relationships to build loyalty, effective remarketing, and LTV
- Transferability of tokens to different brand offers and shareability with different users
These are early days for blockchain-enabled loyalty programs, but with a consumer-first mindset and interoperability in mind, these programs have the potential to bring Web3 to the mainstream.
The future of fun is interoperable! Pocketful of Quarters technology helps transition videogames from servers to the blockchain. Quarters are a patented cross-game and cross-platform non-speculative digital currency which can be transferred seamlessly between products. We also offer a powerful white label solution for larger publishers' ecosystems and their brands. Enhanced game discovery, retention, cross-marketability, and seamless token transfer in gameplay – POQ makes games better for every player, influencer, and developer, creating a multiplier effect on games discovered and played as well as community expansion.
POQ was Unity's first Verified Solution Partner for Web3, has the industry's only SEC No-Action Letter, and has full regulatory compliance. As a consumer product, POQ's interoperable tech has wide applications beyond games to any brands driving loyalty programs with the benefits of Web3.