Global Mkt & Blockchain Tech (week 5 Discussion)

Traditional loyalty programs have many setbacks, including low redemption rates, high costs, few customer enticements, and security issues. Blockchain for loyalty programs is the best choice because Blockchain technology enables the storage of transactional data in a safe and decentralized way. Blockchain loyalty programs connect owners and users of many programs. The technology has easy processes of application and manages consumers' wallets with rewards and passwords. Blockchain is more effective and enables users to receive and redeem loyalty tokens relevant to other programs (Ma, 2020). The Blockchain tokens do not expire or lose value, while in traditional systems, the tokens would expire and lose value. Companies use Blockchain for loyalty programs because they have many benefits, including more organization, open systems, flexibility, lower costs, enhanced security, fewer fraud incidences and transparency. Customers' retention is high because they receive the best treatment from companies. Customers can redeem what they want and any time. Companies also enjoy low costs due to Blockchain, which maintains a native ledger that keeps all the records. Blockchain technology eliminates most of the issues that traditional programs face, and also it has helped companies retain their loyal customers.

Blockchain has many benefits but also faces some challenges. Introducing Blockchain technology involves high costs, and some companies are unable to raise the money. There are costs also brought by the need to break down specific systems and ensure security and proper coordination of all stakeholders involved. There is high consumption of electricity by the hardware used to run the blockchain systems. In some instances, loyalty programs involve many brands, leading to some companies lacking the willingness to exchange personal information. These companies are afraid of exposing themselves and losing control over their data. Blockchain technology faces scalability issues that may affect the success of loyalty programs. Blockchain technology implementation is expensive, and most organizations lack enough knowledge of Blockchain. Most businesses lack awareness of the technology and how it works to ensure successful loyalty programs. When there is a lack of understanding, the technology is not as effective and efficient. There are no proper regulations and governance because technology is constantly changing. Most companies struggle to use Blockchain for loyalty programs because they do not know how to use it with existing regulations (Shalchi, 2019).

Companies can work through the challenges by acknowledging that the technology has a lot of potential. Inform customers and equip them with the control to make permanent records and become more trustworthy. Companies should create rewards programs that have minimal errors, low costs and also empower their customers. Companies should perform extensive research to understand how Blockchain works and incorporate it without incurring a lot of costs. Every new technology comes with its challenges, but Blockchain technology can make loyalty programs more successful and rewarding for customers (Ma, 2020). When the technology is well implemented, it ensures transparency, efficiency, and flexibility to users. Companies need to find ways to get the technology's full advantage to ensure it offers the expected benefits. Blockchain can offer secure and flexible rewards programs that ensure customer retention (Ma, 2020).

Outline: Week I Discussion

Introduction

• Traditional loyalty programs have many setbacks, including low redemption rates, high costs, few customer enticements, and security issues.

Loyalty programs

• Blockchain for loyalty programs is the best choice because Blockchain technology enables the storage of transactional data in a safe and decentralized way.
• Blockchain loyalty program connects owners and users of many programs.
• The technology has easy processes of application and manages consumers' wallets with rewards and passwords.

Challenges

• Introducing Blockchain technology involves high costs, and some companies are unable to raise the money.
• There are costs also brought by the need to break down specific systems and ensure security and proper coordination of all stakeholders involved.
• There is high consumption of electricity by the hardware used to run the blockchain systems.

Solutions to challenges

• Companies can work through the challenges by acknowledging that the technology has a lot of potentials.
• Inform customers and equip them with the control to make permanent records and become more trustworthy.
• Companies should create rewards programs that have minimal errors, low costs and also empower their customers.