Can Cryptocurrency Manage $300 Billion in Loyalty Points for Frequent Flyers and Consumers?
If you’re a frequent flyer, you probably have mileage points scattered across several airlines – American Airlines, United Airlines, Virgin Atlantic, Delta Air Lines, Alaska Airlines. And if you’re a frequent shopper, you’ve accumulated all kinds of points with special incentives from all kinds of brands. Pointium, an ERC20 token based on the Ethereum platform, is planning to unify all of those different points onto a single platform.
A recent report by Accenture reveals that more than “90 percent of companies currently employ some form of customer engagement or loyalty program.” But running loyalty programs, retaining consumers and educating participants about how each loyalty program works create huge costs for major brands along with homework for customers who have to keep track of point expiration dates and minimum spending requirements.
To solve these problems and retain customers, many brands opt for more Byzantine strategies offering Gold, Bronze, Platinum and Silver points.
Last month, Hilton made changes to their rewards program.
“Beyond the direct-booking bonuses, Hilton is also starting a program that awards members 10,000 bonus points for every 10th night after the traveler stays 40 nights. In this way, extended loyalty can be built. Members can earn Diamond status, for example, after 30 stays, but the additional bonus can keep those top-tier members from defecting to another hotel chain after that milestone.” – Skift
With an estimated 3.3 billion loyalty program memberships in the US alone, and an average of 29 loyalty programs per household, consumers are having a hard time keeping track of the different rules that apply to each program. They also worry about their points getting devalued.
The Accenture report concludes, “Without a course correction, investments in loyalty are likely to be wasted in the years ahead — diluting margins, draining profitability, driving less-than-expected growth, and decreasing customer value along the way.”
To reduce the burden, some brands, such as Marriott and Starwood, are unifying their rewards plans.
A blockchain solution is even more comprehensive. Pointium, a blockchain-based platform, plans to use cryptocurrency to solve the problem of so many disparate rewards programs. Their team has identified loyalty rewards across all industries valued at $300 billion, and they’re initially targeting two of the largest sectors – airlines and hotels – before expanding into retail.
The Pointium Wallet is a user interface that acts as a management tool for consumers to exchange and integrate all of their loyalty points for Pointium’s native cryptocurrency, PNT. Their goal “is to corner the global point market by exchanging the points of companies all over the world for PNT, integrating into PNT, and using various promotions for PNT through Pointium Wallet.”
Consumers could maximize benefits without needing to think about when points will expire or how many days they need to stay at a certain hotel or how many airline miles they recently traveled. Users could manage different points from various participating companies at once. By aggregating points, the platform could rewrite the business model of rule-laden loyalty programs, driving efficiency and reducing waste on both sides.
