Universal loyalty programs can serve as powerful tools, not only creating a direct link between a brand and its consumers but also influencing the latter’s shopping behavior, says Gennady Volchek, the CEO of loyalty rewards app Shping. However, by harnessing the power of blockchain and cryptocurrency, these loyalty programs allow brands to connect with customers regardless of their location.
Universal loyalty rewards to drive Web3 adoption
Volchek argues that a loyalty program, if not dependent on narrow monetary systems, allows brands to connect with unbanked audiences or customers excluded from the formal economy. Furthermore, the borderless nature of digital assets means they can serve as an alternative to fiat money or gift cards, eliminating the need to adhere to different redemption mechanisms in different jurisdictions.
When discussing the potential role of universal loyalty rewards in accelerating Web3 adoption, Volchek said the goal should not be to force users to understand the underlying technology. Instead, the goal 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 responses sent via Telegram, the CEO also addressed the impact of a universal loyalty program on a brand’s budget. Below you will find Volchek’s answers to all questions.
Bitcoin.com News (BCN): What are universal loyalty programs and what pain points do they address for users?
Gennady Volchek (GV): Our universal rewards program represents a significant shift from the traditional retail rewards systems we are accustomed to. Most of the time, rewards come from the stores themselves, and they are quite general: if you buy something, you get a reward no matter what you buy, as long as you shop at that specific store. But here’s the thing: this kind of leaves out the actual brand, the one who made the product. 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 and creates a direct link between shoppers and the brands that make the products. Even if you buy through a third party, the experience shifts to a direct interaction with the brand. It’s a game-changer, making brands more connected to consumers and influencing shopping behavior in a whole new way.
Moreover, the special nature of a universal reward program offers a clear advantage. While shoppers appreciate the benefits of rewards programs, managing multiple programs with different terms, redemption methods and rules can be overwhelming. A single rewards program that includes purchases across all brands mitigates this challenge, allowing shoppers to seamlessly participate in multiple rewards programs through a single app. This not only simplifies the customer’s experience, but also increases his or her ability to effortlessly engage with different brands within a unified platform.
BCN: Can you talk about the role of blockchain technology in universal rewards programs? Also, is there a reason why platforms like yours chose to use cryptocurrency as a token of reward instead of traditional money?
GV: There are compelling reasons behind our choice to use a blockchain utility token, commonly known as cryptocurrency, as the cornerstone of our rewards system. First, because we view our platform as truly universal, we aim to serve shoppers all over the world. Recognizing that nearly 2 billion people remain unbanked, relying solely on fiat money poses a significant limitation.
In today’s globalized marketplace, where even smaller brands can boast global distribution, it is critical that we can seamlessly allow a brand in Australia to reward someone in Africa for purchasing their product or contributing a review. This transaction would be exceptionally challenging, if not impossible, if we were tied to local monetary systems or dependent on different redemption mechanisms such as gift cards in each of the jurisdictions.
We realized from the very beginning that we need to develop our own smart contract and integrate 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 reward symbol: 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 more about Web3?
GV: There are numerous buzzwords and acronyms such as defi, Web3 and Dapps, which may not have much meaning to the general person. Mainstream adoption of such technologies often happens seamlessly when users are not even aware of the underlying technology, but rather recognize its tangible benefits. Looking back on past experiences such as adopting Skype, we didn’t embrace it because of the VOIP technology, but because it allowed us to make free calls. I believe the same principle applies to the adoption of Web3 technology.
As more consumers realize the power of taking control of their first-party data, the ability to share it in a controlled environment and be rewarded for it, while at the same time allowing brands to control every interaction with their shoppers personalize, the intrinsic value created increases. a driving force behind the widespread adoption of this underlying technology.
BCN: It’s been said that loyalty programs are more than just reward points or coins. For brands, it is also a tool for collecting first-party data, maintaining customer relationships and influencing shopping behavior. Why should brands choose to work with Shping to become part of your universal rewards programs?
GV: Brands, especially 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. Because the brands themselves have no direct connection with shoppers and cannot offer loyalty programs, Shping, for the first time, allows brands to connect directly with their consumers and run their own loyalty and rewards programs, providing the benefit of they have access to first-hand data.
BCN: Where does the money come from to reward customers for their engagement and loyalty? And how do universal rewards programs like yours impact a brand’s marketing budget?
GV: The short answer is that rewards are funded by brands. For example, if a brand wants shoppers to see their new video explaining the value of their product, they traditionally create a campaign on a social media platform, with the goal of inserting that video into consumers’ timelines. If the video is viewed, the brand is billed for the delivery of that content.
In the Shping world, shoppers would see that video on the product page in the Shping app and 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, rather than paying through the social media platform. Eliminating the middleman for brands could mean reducing their marketing costs by more than 70%, as the rewards paid to shoppers are significantly less than the cost of video views on social media platforms.
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