The COVID-19 global pandemic positively impacts the market in terms of loyalty management and adoption. Owing to the current lockdown situation across countries, almost all businesses, including transportation, retail, hospitality, and banking are disrupted.
The lockdown limits direct product sales, however, online shops and e-commerce websites are gaining traction worldwide to sell essential products and services. Unexpected growth in online purchasing during the crisis, led shoppers to attract and retain maximum customers to their websites, driving the demand for this type of management.
Now the majority of the companies are focused on leveraging the lockdown situation as an opportunity to strengthen their customer trust, confidence, loyalty, and ultimately retention of their customer base.
This digital explosion and growing competition have made customer loyalty and engagement a very difficult task. The loyalty programs like offering customers early access to sales, coupons, etc. have become a standard these days, but customers' expectations are changing. Organizations have to soon shift their approach towards their loyalty program solutions.
People are paying attention to how companies are responding and showing responsiveness toward them during these tough times. Some companies have gone as far as strategically helping customers by making the loyalty points convertible to real-world money or integrating with other services to broaden the reward points redemption options.
Only big players can afford to make those responsive moves.
Most companies stack new loyalty-related tech on top of existing operational systems, creating a satellite system that isn’t truly integrated and doesn’t provide much flexibility. Ultimately, this impacts customer experience, leading to decreased engagement with the loyalty program and watering down its effectiveness.
Points-based loyalty programs also create a new form of currency that brands must be prepared to account for. There are significant monetary implications (money transmitter laws and licenses) that create barriers to entry for companies that are not well-funded or prepared. As a result, brands only make the points as a way for customers to gain more access to new features and lack the option to convert to real-world assets.
Although digital currency is gaining popularity, and exchanging points with crypto could solve the above hurdles, it is still not desirable by everyone. Why? - the majority of the outside world is still unfamiliar with crypto practices (storage, key management, exchanges). Additionally, the volatility in the value of cryptocurrencies has been an obstacle. Because of this, the dream of transferring value from the virtual world to the real-world using cryptocurrencies has yet to be fully realized. SparkleCOIN platform solves this challenge.
The SPRK Awards Platform offers a unique combination of features and consortia building enterprise-level solutions - a dual-ledger system. It offers two different but interactive ledgers.
- A proprietary and private LEDGER for a privately labeled token priced at $1 and,
- The SPRK Blockchain, governed by the SPRK token.
SparkleCOIN’s SPRK Award Platform creates a bridge between virtual world assets and their trading, storage, and transfer in the real world. It provides complete control to providers and consumers alike—the former being able to set the rules that will govern how customers can use the rewards, and the latter having full control to access and use these points as they deem fit.
With a blockchain-based loyalty program solution in place, enterprises also stand to gain in terms of:
- Operation cost: Using smart contracts, businesses can minimize friction, errors, and fraud to ensure secure and transparent transactions, allowing for seamless operation management.
- Transaction ease: More trust in the transactions will permit program providers to bring down minimum points’ requirements for redemption, in turn allowing customers to use points more frequently.
- Transparent process: Near real-time credit of rewards points allows them to be readily redeemable. In addition, by maintaining a timestamped distribution database for every transaction, blockchain ensures each record is traceable and every entry is irreversible.
Let’s take an e-commerce business's virtual economy as an example.
Within the website, economies built around the point system are used to upgrade for special services like delivery priority or discounts. With SparkleCOIN’s SPRK Awards Platform, businesses can allow users to transit the rewards or points to real-world fiat currency through SparkleCOIN (SPRK) in real-time with a single click.
Likewise, the user can also deposit fiat and cryptocurrencies through the SPRK Awards Platform to convert into e-commerce points and use within the website. This is managed by first setting up a fixed valuation for the rewards. For example, every 100 reward points equal 1 stable token, which in turn equals 1 U.S. dollar. This denomination is recorded in the SPRK private ledger.
If a user decides to convert the points, he/she uses an interface that helps to easily redeem the collected points (or rewards) to the stable token, which then can be redeemed for SparkleCOINs (SPRK) at the current market price.
By doing this, the SPRK Awards Platform provides the ability for the stable token to operate within the virtual economy (points) as a fixed-price carrier of value while allowing the SparkleCOIN (SPRK) token to have the varying price dictated by demand and trading on the third-party cryptocurrency exchange, yet providing a seamless way to go from one to the other in real-time.
Based on the information used by the user to create the account, the business can choose to store this information in their own database or transition to SparkleCOIN's private ledger. The private ledger integrated with the business's platform is also used to update in real-time the debit or credit of the user's points.
For each business account, the same login credentials are used to create an account with crypto exchange. Once the user triggers the redeem process (and depending on the method of cash out selected - SPRK or Fiat), the asset management company will manage the transaction at the backend. For instance, buy SPRK from the market (exchange) and transmit the required currency to the user's SPRK wallet. An asset management company usually holds funds in reserve (USDT, or SPRK). This can be a third party or the same business or SparkleCOIN the company itself.
SparkleCOIN leverages its own SPRK blockchain to facilitate SPRK and other cryptocurrency transactions across participant networks. The SparkleCOIN’s digital wallet is integrated into business platforms allowing rewards credit in real-world currencies to the users.
Given that businesses are limited with providing users with options to cashout due to money transmitter laws and licenses, their rewards ecosystem is limited to in-app upgrades. With SparkleCOIN's SPRK Award Platform, since the transition is handled by regulated exchanges, all legal aspects (such as KYC, AML, or money transmission) are automatically handled by crypto exchanges.
To Sum-up:
Growing competition has made customer loyalty and engagement a very difficult task. The loyalty programs like offering customers early access to sales, coupons, etc. have become a standard these days, but customers' expectations are changing.
The market for global loyalty programs is expected to reach $215-$216 billion while growing at a CAGR of 5-6 percent between 2017 and 2022.
With SparkleCOIN developed solutions, a business can easily integrate the SPRK Award platform into their legacy system and offering their loyalty points convertible to real-world money. Ultimately strengthening their customer trust, confidence, loyalty, and ultimately retention of their customer base.
