How customer loyalty schemes need to change to remain enticing

By Animesh Ghosh, KornChain

Participating in loyalty programmes by collecting points and gaining rewards continues to be popular. 77% of the UK population belong to a loyalty programme, and nearly half of them believe their membership encourages them to be loyal to the brand.  However, the industry has stagnated with look-alike programmes causing customer boredom.

One primary drawback with current loyalty points is that it takes too long to reach the redemption threshold and the value is too low to excite customers.  What customers want are personalised, easy and hassle-free experiences. They want to feel truly rewarded for their loyalty and enjoy the power of choice and flexibility.

What needs to change?

There is scope for innovation and the opportunity to deliver a cost-effective and efficient way to manage loyalty programmes, and a significantly improved customer experience.

Customers want to manage all their loyalty cards in one place, to view their available offers, vouchers, and gift cards, and to exchange and pool points for a higher-value redemption; for something that feels like a genuine reward for their loyalty.

To facilitate this loyalty programmes need to go fully digital. Apart from avoiding customers losing paper loyalty cards, a digital loyalty programme and/or loyalty app will generate insights such as which products customers favour or how receptive they will be to various offers.

A way to re-engage customers through loyalty programmes could be to provide flexibility and options on redemption by allowing exchanging points between programmes. For example, a small independent café in Shoreditch allows its loyalty points collected from coffee purchases to be exchanged for a spa day, Airmiles, money off supermarket shopping etc.

However, exchanging loyalty points has, to date, been time-consuming and expensive. Platforms offering loyalty point exchanges tend to charge hefty exchange fees, requiring customers to sacrifice a lot of their points’ value. Recent technological advancements, such as blockchain technology, will change this. 

Introducing blockchain

Blockchain allows the creation of a secure network of loyalty programmes, which would facilitate the instant and effortless exchange of points. Every participating business would benefit from reduced costs of transactions and higher transparency and flexibility. It would also provide them with meaningful insights into their customers wants and behaviours, allowing them to create targeted campaigns.

For example, solutions like LoyalT use blockchain technology to cost-effectively integrate any business, of any size, from any industry into a single loyalty points exchange network. These solutions allow businesses to extend more value to their customers with a real-time loyalty points exchange facility while marketing their business to customers beyond their own programme members. The Shoreditch coffee shop can offer Airmiles, or points of another business by opening up to an exchange.

Benefits for business

In return for offering an exchange of points, businesses will benefit from deep insights on customers’ shopping habits, helping generate more customer engagement through precision marketing.

SMEs especially can gain from being a part of an exchange solution for loyalty points. Not only will they be able to access a massive pool of customer data to help run precision marketing, but they can also get set up quickly and easily, facilitating point exchanges with huge global businesses at a very competitive cost. As such, small businesses can set up a digital loyalty programme and almost immediately start offering loyalty points on every purchase and open up exchange to some highly-desirable loyalty programmes.

Data and security

The joy of a loyalty network running on blockchain is that businesses own and control the data of their customers, minimising privacy concerns. Blockchain in itself is highly secure and the data is encrypted. Further, advanced digital contracts keep information secure and private.

Meanwhile, the network is a bridge between the business and its customers. A good way to describe it is to say that loyalty points are currencies and businesses are loyalty banks. The loyalty network facilitates the exchange, just like payment networks facilitate the transfer of money between customer accounts. Since blockchain automatically creates an unalterable ledger, it is impossible to falsify, making employee and customer fraud a thing of the past while keeping points wallets incredibly secure.

Loyalty programmes are currently undergoing a transformation. Large businesses are augmenting new technologies like Machine Learning, Artificial Intelligence, etc. to improve their marketing strategies to make programmes more desirable. 

Small businesses will be able to take advantage of the opportunities that technologies such as blockchain are offering. By opening up an exchange they and their customers will benefit.


Animesh Ghosh is an industry thought leader and expert in Blockchain, AI and IoT solutions with over 22 years of experience as Consulting Partner Architect and higher, in global companies like Lloyds, RBS, Wipro, Infosys, Virgin Atlantic, etc.

Animesh is also founder and CEO of KornChain ‒ a technology company that is building a global blockchain network for the loyalty marketing industry.

Animesh and his team have recently launched LoyalT. KornChain’s LoyalT® seeks to be a global loyalty point exchange network powered by Blockchain & AI. Customers can earn, spend, exchange & consolidate points in real-time while businesses benefit from customer acquisition, repeat-sales and deep insights. On-going implementation with large clients.


  1. Making blockchain real for customer loyalty rewards programs, Deloitte
  • Jeff Berry, “The 2015 COLLOQUY Loyalty Census: Big Numbers, Big Hurdles,” COLLOQUY, February 2015.
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