Part of the joy of going to an arcade is that each of them has its own unique token system, only valuable within a specifically branded gaming economy. Standard dollars can still buy whatever prizes that tokens or tickets can win, but when better people play, a $15 stuffed dolphin can be won with three dollars worth of tokens. Consumers like to get the most value they can from their time and money, and cryptocurrency affords them this opportunity.
Cryptocurrency is not mainstream yet, but a growing number of businesses are beginning to host Initial Coin Offerings. Similar to how using a dollar is something unique to the United States, using a business’s native digital token makes customers feel part of a community—with a few additional rewards, too. Tokenization is more than a mere trend, so here’s how to take advantage of it to incentivize user engagement.
Using tokens as a customer loyalty program
Most customer loyalty programs are well-intentioned, but they sometimes fail to keep customers fully engaged. Are people earning enough points? Are points easily redeemable? Some people abandon programs because they do not even know how to access their balances. A recent study notes that approximately $100 billion worth of loyalty program points is currently unclaimed.
Cryptocurrency, however, is more straightforward to manage, and the concept of coin value is already familiar to them. Digital Commerce 360 says:
“Perhaps the most intriguing part of using digital tokens for loyalty points is the ability to use them as currency or as redeemable rewards a different, in-network establishment. For example, points earned from buying a latte in the morning at Starbucks could be used later in the day to buy lunch at Chipotle. This versatility is a game-changer and puts both the brand and the consumer in the driver’s seat.”
The purpose of loyalty programs is to make customers feel as if they are getting paid to spend. Owning digital tokens instead of working with an obscure point system is like having extra cash, and people are more likely to spend what they understand.
Digital Commerce 360 mentioned “in-network” transactions. One way to maximize a crypto customer loyalty program is to partner with other businesses so that your particular “economy” is not overly esoteric. If people can earn tokens by participating on one online platform and spend them at another, the companies partake in a mutually beneficial relationship where each other’s business supports the other.
A company named SuccessLife is a good example of a company that does this: SuccessLife is creating a decentralized online marketplace for personal and professional development resources, which is open to third-party users. Instead of providing only original content, the company allows anyone with self-improvement wisdom to share it, so the platform becomes a go-to place for anyone seeking further education.
Give participants some flexibility
CMO reports that when Loyalty partnered with the University of NSW, they offered students cryptocurrency rewards for typical purchases. Students were given four options regarding how to access their currency: they could “cash it in for a gift card; have the currency directly deposited into their bank account; transferred to another participant; or banked directly and held in an Ether wallet.”
When using cryptocurrency, be sure that your blockchain application does not frustrate participants. Flexibility requires speed and size, so adopting specialized blockchains may be wise. Dispatch Labs offers a fast and scalable application for others to use. Dispatch’s blockchain uses the Delegated Asynchronous Proof of Stake consensus algorithm, making it able to process transactions faster than Bitcoin and Ethereum. Customers will love a crypto-based loyalty program, but only if it functions smoothly and securely.
Not all businesses require people to spend money, especially online ones. One company, AI Gaming, allows participants to create complex artificially intelligent “bots” that compete with one another. Though users are not purchasing products, AI Gaming still finds that tokenization motivates more frequent activity.
When asked how their cryptocurrency fosters closer engagement, AI Gaming says that users can earn tokens in a variety of ways: 1) by educating themselves on basic coding techniques, which creates an incentive for learning, 2) by competing, using AI Gaming Coins as stakes for winning games, 3) by branding and sponsoring challenges, rewarding participants with tokens for participating, and more.
Offering digital tokens with on-platform value makes users feel like they are earning something—and they are. Time spent on AI Gaming is not idle when it pays to learn and form a community. Why would users avoid such an opportunity?
Advertise the benefits of blockchain technology
Typical customer or user engagement programs are often bogged with bureaucracy and mismanagement. It’s incredibly frustrating when someone accumulates points and expects to redeem them, only to find out that there are unexpected terms and conditions or technical discrepancies that prevent them from doing so.
Blockchain technology, however, records all crypto transactions made with its system. It provides an unprecedented level of transparency that allows users to view their histories and plan future participation accordingly. Techniques to motivate participants should be reliable, and blockchain offers necessary security.
Many businesses are struggling to keep their users engaged. Where traditional methods are insufficient, digital tokens can incentivize participation.