Blockchain-Based Loyalty Rewards Foster Brand-Customer Connection, Accelerate Web3 Adoption — Gennady Volchek
Universal loyalty programs can serve as potent tools, not only forging a direct link between a brand and its consumers but also influencing the latter’s shopping behaviour, Gennady Volchek, the CEO of the loyalty rewards app Shping, has said. However, by harnessing the power of blockchain and cryptocurrency, these loyalty programs empower brands to connect with customers, regardless of their location.
Universal Loyalty Rewards to Drive Web3 Adoption
Volchek argues that a loyalty program, when not dependent on restricted monetary systems, enables brands to engage with unbanked audiences or customers who are excluded from the formal economy. Furthermore, the borderless nature of digital assets allows them to serve as an alternative to fiat money or gift cards, eliminating the need to adhere to varying redemption mechanisms across different jurisdictions.
When discussing the potential role of universal loyalty rewards in accelerating the adoption of Web3, Volchek said the goal should not be to compel users to comprehend the underlying technology. Instead, the objective should be to help users recognize the tangible benefits of Web3. Volchek argued that universal loyalty rewards could be the tool to achieve this.
Meanwhile, in his written answers sent via Telegram, the CEO also touched on the impact of a universal loyalty program on a brand’s budget. Below are Volchek’s answers to all the questions.
Bitcoin.com News (BCN): What are universal loyalty programs and which pain points do they address for users?
Gennady Volchek (GV): Our universal rewards program represents a significant shift from the traditional retail reward systems we’re accustomed to. Typically, rewards come from the stores themselves, and they’re pretty generic – you buy something, you get a reward regardless of what you buy as long as you shop in that specific store. But here’s the thing: this leaves the actual brand, the one that made the product, kinda out of the loop. Despite being a crucial part of the process, brands often don’t get that direct connection with consumers.
Shping’s universal rewards program cuts out the middlemen, creating a direct link between shoppers and the brands that make the products. Even if you’re buying through a third party, the experience shifts to a direct interaction with the brand. It’s a game-changer, making sure brands are more connected with consumers, and influencing shopping behaviour in a whole new way.
Moreover, the singular nature of a universal rewards program provides a distinct advantage. While shoppers appreciate the benefits of rewards programs, managing multiple programs with varying terms, redemption methods, and rules can be overwhelming. A single rewards program that incorporates purchases across all brands mitigates this challenge, enabling shoppers to participate in multiple rewards programs seamlessly through a single app. This not only simplifies the shopper’s experience but also enhances their ability to engage with various brands effortlessly within a unified platform.
BCN: Can you talk about the role of blockchain technology in universal reward programs? Also, is there a reason why platforms like yours chose to leverage cryptocurrency as a token of rewards instead of traditional money?
GV: There are compelling reasons behind our choice to utilise a blockchain utility token, commonly known as a cryptocurrency, as the cornerstone of our rewards system. Firstly, envisioning our platform as truly universal, we aim to cater to shoppers worldwide. Recognising that nearly 2 billion people remain unbanked, relying solely on fiat currency presents a significant limitation.
In today’s globalised market, where even smaller brands boast global distribution, its vital for us to be able to let a brand in Australia seamlessly reward someone in Africa for purchasing their product or contributing a review. This transaction would be exceptionally challenging, if not impossible if we were tethered to local monetary systems or reliant on different redemption mechanisms such as gift cards across each of the jurisdictions.
We have realised from the very start that we need to develop our own smart contract and incorporate specific technologies and capabilities to meet the diverse needs of our future global user base. This strategic approach has led us to create our own truly universal token of reward – the shping coin.
BCN: Do you believe that creating a bridge between brands and consumers will accelerate Web3 adoption and why would this be a useful tool for non-crypto users to learn about Web3?
GV: There are numerous buzzwords and acronyms like defi, Web3, and Dapps, which might not hold much meaning for the general person. The mainstream adoption of such technologies often happens seamlessly when users aren’t even aware of the underlying technology, but rather, they recognize the tangible benefits it brings. Reflecting on past experiences, such as the adoption of Skype, we didn’t embrace it because of its VOIP technology, but because it allowed us to make free calls. I believe that the same principle applies to the adoption of Web3 technology.
As more consumers realize the power of taking control over their first-party data, having the ability to share it in a controlled environment, and being rewarded for it, while simultaneously enabling brands to personalize every interaction with their shoppers, the intrinsic value created becomes a driving force for the widespread adoption of this underlying technology.
BCN: Loyalty programs are said to be more than just reward points or coins. For brands, it’s also a tool for collecting first-party data, nurturing customer relationships, and influencing shopping behavior. Why would brands choose to work with Shping to become part of your universal reward programs?
GV: Brands, particularly those with third-party distribution, rely on retailers to obtain some of the first-party data that retailers collect by running their own loyalty programs. As the brands themselves lack a direct connection with shoppers and are unable to offer any loyalty programs, Shping, for the first time, allows brands to connect directly with their consumers and run their own loyalty and rewards programs, bringing the benefit of having access to first-party data.
BCN: Where does the money to reward customers for their engagement and loyalty come from? Also, how do universal rewards programs like yours affect a brand’s marketing budget?
GV: The short answer is that rewards are funded by brands. For example, traditionally, if a brand wants shoppers to see their new video explaining the value of their product, they would set up a campaign on a social media platform, aiming to insert that video into consumers’ timelines. If the video is watched, the brand will be invoiced for the delivery of that content.
In the Shping world, shoppers would see that video on the product page within Shping App and would earn rewards if they choose to watch it. As you can see, the brand would pay the consumer directly for their engagement with that video, instead of paying the social media platform. Cutting out the middleman for brands could mean reducing their marketing costs by more than 70%, as rewards paid to shoppers are significantly less than the cost of video views on social media platforms.
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