DigitalFlyer® and Community Business Token (CBT) Customer Loyalty Blockchain Rewards Program
The CBT blockchain rewards program aims to have a decisive impact in multiple areas of existing loyalty programs. The platform will allow for the efficient use of a cryptocurrency token in the markets without needing a significant overhaul of the existing financial infrastructure. It also allows businesses to eliminate the liability of unredeemed reward points.
CBT, as an emerging cryptocurrency, has a strong focus on enhancing micropayments. It is only a matter of time before all loyalty programs migrate to blockchain. The business rewards industry is changing swiftly, along with customer expectations. Customer pain points today will inform the innovations of the future. The CBT blockchain rewards program technology for loyalty programs will not only allow more businesses to explore the capabilities, it will also change the future of small businesses.
DigitalFlyer® SA and CBT (Community Business Token) have successfully developed a B2C (business to customer) and B2B (business to business) digital marketplace with its own blockchain rewards token. The CBT token has been developed for any rewards program, making the implementation really simple and cost effective.
Understanding traditional rewards programs
Customer loyalty programs form the foundation of many companies’ success today, especially in the retail space. Businesses today cannot underestimate the value of loyal customers, yet the infrastructure and maintenance costs related to building a digital-only rewards program can far exceed the budget of smaller companies. Building a strong network of customers who value your brand above all others and are willing to spread that message to their friends is a huge advantage.
Loyal customers spend more, are more likely to convert when they visit your site and are more likely to become brand promoters and champion your business and brand to other potential customers.
Businesses have used loyalty programs to encourage repeat business for a long time. These programs are used as a tactic to encourage repeat customers by offering points and discounts.
Existing rewards programs are beginning to lose traction with modern customers because of complex registration processes and having to carry multiple cards. Instead of enhancing the customer experience, they can actually have the opposite effect. Customer enthusiasm is dampened with complex rules and transactional rewards. Due to inactivity on accounts, low redemption rates, time delays, high transaction and system management costs, current loyalty and rewards programs are not accomplishing what they set out to do.
In our view, there are several reasons for these inefficiencies. Lack of uniform management systems across different loyalty and rewards programs is a primary source of members’ inactivity. Recent studies show that customers were much more likely to choose a bank that offered them a better rewards program for being a good customer.
Blockchain is an ideal solution for what troubles traditional loyalty rewards programs.
What is blockchain?
Blockchain is, in simple terms, a decentralized ledger (unlike banks that make use of a centralized system). The virtual blocks are storage units for digital information about transactions (e.g. date, time, amount, and parties engaging in the transactions). Each block includes a unique code called a hash that allows it to be distinguished fr om every other block.
As new transactions are made, new blocks are added to the end of a chain, which is a public database available for anyone to view. Blockchain technology is broadcast off a P2P (peer to peer) system of nodes, making it more anonymous and secure than other forms of payment. Because each block contains a unique hash, the data cannot easily be altered or hacked.
How can blockchain enhance the customer experience?
Blockchain is designed for storing transactional data. It is secure and decentralized. It improves customer experience significantly by allowing them to access most, if not all, of their loyalty rewards programs in one digital wallet. In short, loyalty rewards are a type of digital currency. It is only natural to conclude that the same technology that enables the most well-known digital currency, Bitcoin, which is used to trade, exchange for services or goods, and convert to fiat currency (traditional currency), could do the same for loyalty reward points.
Blockchain allows reward program providers, administrators, system managers and customers etc. to interact in one system without a middle-man and without compromising privacy. For loyalty rewards program providers we believe that blockchain streamlines the execution and administration of their programs with near-real-time transparency, resulting in cost savings. For small businesses being part of a larger network provides them with a greater opportunity for growth. By using blockchain technology we can connect the largely disconnected world of loyalty rewards programs. It reduces costs, eliminates disagreement between the service provider and the customer, brings loyalty rewards crediting and redemption into near-real-time, provides a more secure environment, and facilitates business relationships.
Unlike traditional rewards points, these tokens never expire. Here are a few of the advantages to this type of system.
1. Decentralised systems
Blockchain tokens cannot expire as they are recorded publicly on the blockchain. The issuing company cannot take away those tokens due to company policy changes. This has great benefits for the consumer who does not have to worry about their points expiring before they can use them. As a result, businesses will gain greater customer loyalty by providing an easy to use and transparent customer experience.
2. No more loyalty cards
Blockchain tokens can be used at other stores, switched for different cryptocurrency on exchanges or saved. That means consumers will not have to juggle different rewards with different businesses.
Customers have more freedom in how they redeem their tokens, including being able to redeem them in smaller increments. One of the many complaints customers have with loyalty programs is a complex point accrual system with very limited rewards. Blockchain tokens allow for more flexibility in how consumers use and spend their rewards.
4. Cost reduction
Programs are cost effective and easy to implement and maintain. Because of blockchain’s native ledger, you already have a loyalty record.
Consumers will know that a business cannot change any rules or blockchain token amounts. This enables greater customer satisfaction knowing that they can redeem what they want, when they want.
6. Eliminating fraud
Blockchain is based on a P2P system. All transactional information is stored on the unchangeable blockchain ledger. The database entries are time-stamped and irreversible, preventing fraud and manipulation.
How will blockchain benefit businesses?
1. Easy adoption for businesses of all sizes
Blockchain can be a game changer for any size business because it enables businesses to create loyalty programs of their own. Loyalty programs can be put into practice at a lower cost and on a smaller scale with fewer roadblocks.
2. Easier accounting
Blockchain rewards are simpler for customers to manage without having to juggle multiple cards and accounts. Businesses will not need an accounting team to handle the complex transactions.
3. Satisfied customers
Rewarding customers for being loyal is one way to achieve return customers. With the help of blockchain, businesses can revamp their loyalty programs by giving customers greater ownership and flexibility over their rewards for an overall happier experience.
4. Access a new network of loyal customers
Using blockchain to create a network of partnerships wh ere customers can use their tokens, a business gains access to a bigger ecosystem of potential customers.
DigitalFlyer® Loyalty Network Platform
DigitalFlyer® has already developed the loyalty network platform, enabling multiple different organizations to use the CBT token. It facilitates business and customer interaction, especially in terms of the ease of convertibility and exchange of their points.
CBT is built on the ERC20 Blockchain network. ERC-20 tokens are tokens designed and used solely on the Ethereum platform.
Ethereum is a decentralized network of computers with two basic functions:
1. record transactions,
2. a virtual machine that can produce smart contracts.
Smart contracts are used to create ERC-20 tokens.
They are also used to facilitate transactions of tokens, and record balances of tokens in an account.
CBT Loyalty Tokens
CBT is now an ERC20 token with its own smart contract and can be traded, spent, or exchanged for fiat currency.
How does this work?
• Public members can purchase CBT’s via the ICO or upcoming IEO’s.
• Business members can already accept CBT’s as payments.
• CBT holders can already transact in CBT via the CBT wallet or any Ethereum trust wallet.
• With DigitalFlyer® SA as our first digital marketplace, members and businesses will earn CBT’s by simply transacting via the ecommerce module of DigitalFlyer® SA.
• DigitalFlyer® SA’s platform will also be rolled out internationally in the next few months.
• Because of the smart contract, any CBT holder can already spend or transfer CBT’s to someone else. When we list on various exchanges from the 1st of April 2021, holders will be able to trade CBT’s like any other cryptocurrency.
We believe that blockchain rewards tokens are the next logical step in the evolution of rewards programs. We are simplifying rewards programs for customers while introducing crypto to businesses.