If you’re a business looking to increase customer retention and engagement, loyalty programs are an effective strategy to build relationships and brand affinity. However, with 3.3 billion loyalty memberships in the US alone, competition is only becoming fiercer as every other brand launches their own version of a loyalty program. To stay competitive, your brand can either offer more points or rewards to entice customers, but this will directly impact your bottom line. So how can your business truly stand out without having to compromise your profit margin?
Crypto rewards as the new currency
Traditional loyalty programs typically offer rewards in the currency of points that can then be redeemed for other goods or services, or straight dollar cash. However, over the past few years we’ve seen a new asset class emerge that is growing in popularity and demand. That asset is cryptocurrency.
To some, the term “cryptocurrency” is nothing but a buzzy marketing ploy. To others, crypto is viewed as a real asset and store of value. Whichever side of the fence you sit on, the market has already spoken by valuing the global crypto market at over $1 trillion.
According to study, over 145 million Americans say they currently, or at some point owned cryptocurrency. That’s roughly 56% of the entire U.S. adult population! Particularly during a time when the stock market is down and inflation is soaring, more and more consumers are turning to alternative assets to build and preserve their wealth.
The value of offering crypto rewards
Crypto rewards are already being offered in products today. The most common example we see is in credit cards. Crypto firms like Blockfi, Gemini, Coinbase and Crypto.com are trailblazing the industry by offering traditional credit card products with a crypto-based reward program. Rather than giving customers cashback on everyday purchases in traditional dollars, they maintain a competitive edge by giving crypto-back as the reward. According to Visa, the biggest credit card issuer in the U.S., they processed over $1 billion in transactions in the first half of 2021 on their crypto-associated cards.
But it’s not just crypto companies that are offering these incentives though. Even mainstream brands like Shake Shack are experimenting with crypto reward programs. Back in March, this major burger chain tested a promotion of offering 15% back in crypto on purchases made with the Cash Card, a debit card issued by Cash App.
Even more recently, Starbucks announced their plans to incorporate crypto into their current rewards program that we all know and love. Despite the risky and volatile nature of cryptocurrency, big brands are continuing to experiment with crypto-based rewards because they see value in offering this type of loyalty program.
It adds value to your brand at low risk. For those interested in entering the crypto market, earning free crypto rewards through a purchase is the easiest way to onboard. There’s virtually no risk to the customer to receive crypto-back rather than cash-back. When they see their assets soar in value, it also adds value to your brand. For consumers already invested in crypto, there is even less convincing required as they already see the value in earning and holding crypto.
It’s an eye-catching marketing tactic. While your competitors offer traditional rewards and unappealing loyalty programs, your business can stand out by offering the novelty of crypto rewards. This strategically positions your business as ‘innovative’ and ‘ahead of the curve’ - a type of brand that will appeal and capture the attention of GenZ and millennial consumers.
It promotes a safer, more transparent environment. The nature of crypto is that all transactions and records are stored on a public ledger. For your business, more transparency can prevent fraud, double-spending and system manipulation.
Become an early adopter of crypto rewards
While cryptocurrency itself is growing in demand and adoption, crypto rewards are in its infancy. Major brands are just beginning to experiment with their loyalty programs by incentivizing customers with this unique, new currency.
For smaller ecommerce businesses and retailers, you too can also launch your own crypto rewards program and win over your market. Rather than increasing the dollar amount of rewards, your business can maintain a competitive edge by simply offering a different form of currency, one that meets the demand and appeal of your consumers.
Peopetail makes it easy for Shopify merchants to set up and give customers free crypto-back on selected purchases. To start, all you have to do is download the Peopetail app, free on the Shopify Marketplace and start offering crypto rewards in minutes.