We are all aware about blockchain and everyone still is looking for the killer app. I am working in loyalty marketing company with 4 years experience. When we face with mobile distruption in loyalty marketing, everyone wrote about it with old loyalty card images. I won't do that again, it is a very dissapointing cliche. Now, behind the scene, blockchain is tranforming this marketing concept and still blockchain is loyalty marketing is very promising for brands and governments. 

CASES : FINE INTRODUCTION

I really love to start to talk about a concept with current cases. Before the benefits about blockchain in loyalty marketing, I want to share some cases around the World.

BURGER KING RUSSIA: WHOOPER COIN

Burger King Russia created their own cryptocurrency called Whooper Coin. Each time customer buy a whooper, Burger King is rewarding with Whooper Coin. It's a very good try and worth to watch the performance. Burger King has partnered with crypto-cash start-up Waves to create and run the scheme.The tech company will run the blockchain ledger for the coin to keep track of who has coins and what has been done with them.Customers will be able to claim their coins by scanning a receipt with a smartphone.The crypto-currency is a stand-alone system that has some technical similarities to Bitcoin but is distinct from it.This means the company would be able to shut the system down if it found it was being abused.

So, remember the name of the Waves in this case.

SINGAPORE AIRLINES

Singapore Airlines launched their cryptocurrency wallet for their frequent flyer program. The new KrisFlyer digital wallet app, which is expected to roll out in about six months, was developed through a collaboration between SIA Group, KPMG Digital Village and Microsoft. SIA Group is initially signing up retail merchant partners who will accept the miles as currency in Singapore. The KrisFlyer digital wallet is managed using a SIA-owned private blockchain that will be exclusive to SIA’s partners and merchants.

Now, customers are able to spend their miles in merchants. Also, please think about the cost burden of miles to an airline company. It's a nice win-win program. Earn the miles, don't spend all of them on your future flights. They partnered with Loyyal, and now please remember the name of Loyyal.

NORWAY AND DUBAI: CASE OF TOURISM

Source: https://cointelegraph.com/news/dubai-and-norway-use-blockchain-to-redefine-tourism

Loyyal is working with Dubai Global Blockchain Council, run by the Dubai Future Foundation on ‘Dubai Points’. These Dubai Points will be a Blockchain based system. A press release carried by ACN Newswire said, “This program is proof that Blockchain is not limited to financial transactions but could be used in many ways, including promoting tourism," said Saif Al Aleeli, CEO of Dubai Future Foundation. He continues, "The Foundation established the Global Blockchain Council as part of its Future Agenda to explore emerging technologies, investigate their impact, and also come up with ways to regulate it.”

https://cointelegraph.com/news/dubai-and-norway-use-blockchain-to-redefine-tourism

When you visit Dubai as a tourist, you can earn "reward-coins" and you can spend them in local merchants. This is amazing because governments can make profit from it, local merchants can profit from it, and it's also tourism booster because it's an unique experience. 

Sausalitos: German Cocktail Bar Chain

Source: https://www.ccn.com/german-cocktail-bar-chain-announces-blockchain-rewards-program/

Sausalitos which has 4 million yearly visitors, 41 restaurants, and 900 employees establishments throughout Germany is rolling out a loyalty reward program with a blockchain-based cryptocurrency with partnering Qiibee. Please remember the name of Qibee now :)

Qiibee created on top of the Ether network. brands purchase QBX tokens on crypto exchanges in order to trigger a smart contract which creates loyalty tokens. Sausalito’s and Lattesso are examples of companies working with the program, and their tokens are tied to the value of QBX.The cocktail bar can choose to promote a particular beverage during happy hour (for example) and reward customers with their bar tokens, as well as asking the beverage brand to purchase the tokens in return.

BENEFIT: REASONS TO MAKE IT

Everyday we are adding new cases, you can search it on the Google and you will face with many of those type of cases. Qiibee and Loyyall is dominating the industry for now, however Waves is very promising company to change the way your redemption methodology. So, what is the benefit of the blockchain in the loyalty marketing environment? 

Let's start with a retail specially QSR industry. Think about that, you have a coffee chain and you created a traditional mobile loyalty program. Let's say that like Starbucks, for every 15 purchase you are rewarding your customers with free drink. For an illustrative example, let's assume that cost of a free drink is $1.00, average price of a drink is $5.00 and assume that your net profit is $4.00 (for a simple example we can only think that the drink's cost) 

Simply, every time a customer earn a free drink, you will earn $60.00, and for every free drink you will give up on $5.00 

If your customer's shopper frequency is increasing with the program, you can feel comfortable with your incremental revenue(generally heuristically calculated, most of the time far away from the reality)

One day you woke up, read about an article about blockchain and loyalty programs, and decide to give a chance. Your CRM and IT teams worked collaboratively and created the COFFEE-COIN. Every time your customer buy a drink, now you are giving your cryptocurrency. You don't have to think about the rules & descriptions about your campaigns because it's hard coded. You don't have to define the reward point to your customer next day after the transaction. Also if you are working with partner like Loyyal or Qiibee you don't have to find third party partners to diversify your program's benefits. Because with your Coffee-Coin you can buy Cinema-Coin and redeem it on a movie, you don't have to think about the churn because it's hard-coded, your customer can't buy Starbucks-Coin.Whenever customers spend their loyal-coins on merchants, your coin's market volume will increase so we can expect that price will increase too. 

Finally think about the case, your customer will spend his/her coffee-coin on your merchant. When customer buy the latte with Coffee-Coin, your drink cost will decrease because your loyalty point now have a financial value in the market. Also in a future case, you can earn much more profit from your coin like a tech company. 

When we are talk about blockchain and loyalty in Turkey many of the experts are saying that:

- It's not legal

- Government should understand it first

- It's not applicable because people don't now anything about the blockchain 

OK, there is a governmental issue on this topic however it's not a huge barrier. In the Middle East and emerging countries, experts generally wait for the best-cases. They are generally not risk-taker when it comes to new technologies and business models. It's true, people don't understand the blockchain however people also don't understand the mechanism of a debit card. Ask any of your customers about magnetic-stripes probably you won't take good definition and you don't have too. It's also true about the blockchain. Because customer should see the benefit, they don't have to understand the technology behind it. 

I deeply believe that blockchain is the next distruption in the loyalty marketing like mobile-wallets and AI. If emerging countries want to be a developing country they have to learn about risk-taking.