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UC Wk 5 Impacts of Blockchain on Loyalty Programs Discussion


Impacts of Blockchain on Loyalty Programs

Blockchain technology is a decentralized distributed database that utilizes clever cryptography to add new data to spreadsheets. Still, previous data is increasingly possible to go back and delete data to provide a secure distributed record of what occurred over time—blockchain without upsetting loyalty. According to the speaker, there is too much noise in the blockchain (Burnett, 2018). Still, however they have a place in loyalty, we are away from blockchain, including the standards necessary for establishing mission-critical applications. Brands need to experiment with blockchain, but they should be hesitant in building mission applications, but they should be prepared to incorporate this.The application of blockchain in loyalty programs presents various opportunities; this includes rewarding redemption; this technology addresses various concerns of traditional loyalty programs such as redeeming points before they expire, thus keeps track of the different loyalty programs (Fromhart et al., 2016). Also, blockchain allows customers to store all topics in a single wallet, thus saves them from managing multiple schedules. Also, blockchain facilities are more flexible in loyalty programs. This is where customers will no longer have to wait to be rewarded points since they will receive them in real-time. Also, the data stored in ledgers are secured and structural, thus is efficient for targeted content.

Many companies have adopted and exploring the possibilities and opportunities of blockchain on customer loyalty programs. Both videos present critical challenges for leveraging the blockchain in such programs; these drawbacks include scalability; since the technology is new, it may struggle with demand. (Fromhart et al., 2016).  Also, the infrastructure supporting the technology may not be sufficient for large-scale blockchain loyalty programs. Another challenge is the emerging trends. Today many companies such as Gift Jeenie and Loyela are implementing blockchain loyalty programs. For instance, companies such as American Express have capitalized on the transferability of blockchain to allow merchants to tie the company’s reward points to their products. Thus these companies aim at improving their customer experiences through giving rewards to their customers, thus having control over their loyalty program.

The challenges of leveraging blockchain technology for loyalty programs can be overcome through the capabilities of integrating programs. Also, there is a need to maintain data security and coordinate multiple intermediaries. Additionally, utilizing the strategy of empowering customers with control helps overcome the challenge of new companies taking over loyalty programs. (Burnett, 2018). Also, there is a need to enable brands to create reward programs that reduce error; these brands can also cut costs and empower their customers.  In addition,  blockchain challenges in loyalty programs can be prevented by establishing loyalty programs that focus on personalization to control customers’ accounts. The ability of flexible stabling rewards allows customers to earn points for different bills through mobile apps. Therefore, since blockchain technology comes with potential challenges, it is essential to harness blockchain’s capabilities enabling companies to develop reward programs that can retain consumers.


Burnett, S. (2018). Can blockchain reinvigorate loyalty programs?. Forbes Magazine, 11.

Fromhart, S., & Therattil, L. (2016). Making blockchain real for customer loyalty rewards programs.


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