This blog series illustrates how we can integrate utility tokens as loyalty rewards for eCommerce websites with the power of Solana Blockchain. Loyalty reward systems are seen in certain affiliate websites, where users are rewarded with special points for performing certain actions.
You may have come across eCommerce websites where you can earn rewards and spend extra cash by performing some actions such as watching a promotional video, participating in surveys, writing a review, or buying or selling products. Such websites are called Reward websites and have grown quite popular in the past few years. These websites allow their users to start earning loyalty points that help them win various gifts, redeem them for free products, or for earning massive discounts on subsequent orders from their website. In exchange, they want their users to perform actions like buying or selling products, watching videos, or writing a product review. They earn their revenue by the means of affiliate marketing.
Similar results can also be achieved in the Web3 world using SHYFT APIs. SHYFT APIs can help us to build websites, instead of native coins or units, which can roll out actual coins or tokens as rewards that can be later redeemed from the website itself or elsewhere.
Why Blockchain?
The traditional loyalty reward system has its own hits and misses, both from the company’s and the customer’s point of view. Customers may have to manage numerous loyalty programs which may not be compatible with each other, and each has different guidelines. Also, customers may have to make unnecessary purchases in order to avoid losing their loyalty points, as most loyalty points have an expiry date. From the company’s point of view, these loyalty programs may require a huge management team, which may increase the maintenance cost. This is where blockchain finds its application, as they have the potential to improve the loyalty system for both companies and customers. Some of the companies which use blockchain-based loyalty programs are Singapore Airlines and American Express.
With the added advantage of transparency and security, Blockchain-based loyalty programs provide some features which make them an attractive option for companies that are planning to build a customer-appreciated loyalty program.
Reusable Loyalty Tokens
Blockchain-based loyalty systems use SPL tokens instead of loyalty points as rewards for their users. These tokens can be already existing tokens or new tokens specially created for one particular system (or website). This can make partnerships and collaboration within companies easier than ever. Generally, reward websites, or websites with loyalty-customer program use affiliate marketing to generate their revenue. This makes collaboration with other companies an integral part of their business. Using the same tokens for the parent and affiliate companies clarifies the currency value for both customers and collaborating companies.
Maintenance Free Infrastructure
Building and maintaining a traditional loyalty system can be both time and resource-intensive, and this cost may increase as the number of loyalty customers increases on the website. We can exploit the power of Blockchain using SHYFT APIs. SHYFT provides a series of wallet and token APIs, which will help you to set up and maintain a token-based loyalty system on Solana in a totally zero-maintenance backend manner. Wondering How? Keep following the next blog in the series to know more.
Token Autonomy
Whenever we opt for a Blockchain-based loyalty reward system, we tend to replace loyalty points with tokens or some form of cryptocurrency. This can impact the customer’s trust in a positive way as they have autonomy. Customers are the sole owners of tokens that they have earned as loyalty, and they can do anything they want with them like sharing among themselves or burning them. With the added advantage of partnership programs, they may also redeem these tokens elsewhere, which reduces the need for unnecessary purchases, just for the sake of spending the Tokens.
Crypto Enthusiasts As Potential Customers
Blockchains and Blockchain-based systems are a great way to attract Crypto-Enthusiasts, who could also be potential customers for the website. In recent years, Blockchains have grown quite popular, and a lot of users view cryptocurrencies as a huge investment opportunity. So, a website that gives out cryptocurrencies to customers as loyalty, will gain the limelight very fast and will attract crypto enthusiasts and investors. Users would also want to sign up just to collect these tokens just for the sole purpose of having them in their collection or collecting them just to exchange them for actual currencies, as the tokens themselves will have value.
As we see, there are multiple lucrative reasons for replacing the traditional loyalty reward system with a robust and scalable Web3-based reward system using Blockchain. Now comes the question of how. In the next part of this series, let us see how we can integrate a Blockchain-based loyalty reward system for eCommerce websites. Stay Tuned!
Up next: How to reward users with utility tokens on a Solana-based eCommerce Loyalty System.
