Is blockchain the future of loyalty programs?

Qiibee hopes its blockchain-based ecosystem will help solve the many issues with existing programs.
Gabriele Giancolo

As customer loyalty programs continue to face major hurdles, companies are looking to leverage new technologies to offer programs that better suit both customers and businesses.

Swiss company Qiibee is one that has turned to blockchain technology to solve issues like loyalty program fragmentation, account inactivity and consumer concerns over data management and privacy.

Qiibee has worked with a few international brands, including Subway and Burger King, and is currently in talks with others that have a presence here in Canada.

As a blockchain-based ecosystem with its own loyalty platform and developer interface, Qiibee gives brands the chance to build their own applications within its system. Customers earn rewards for their purchases as usual; however, those rewards are then “tokenized,” similar to cryptocurrencies like Bitcoin. This allows customers to redeem rewards with any business on the platform that accepts this token. This gives customers more flexibility than with traditional loyalty programs, while also giving brands greater access to all the customers within the ecosystem.

“The underlying fact that customers can redeem their loyalty tokens anywhere within the ecosystem incentivizes brands to offer appealing promotions which thereby increase the quality and attractiveness of the Qiibee ecosystem as a whole,” wrote the company’s co-founder and CEO, Gabriele Giancola (pictured), in an email to strategy.

Multi-partner loyalty programs aren’t new by any means, ranging from legacy programs like Air Miles to startup programs like Drop. But by using blockchain technology, Qiibee also addresses the consumers’ underlying concerns with data collection, because a blockchain system is inherently built on transparency and decentralizing data. Giancola says this has the potential to not only decrease the risk of attack, but that it also saves companies money on data management and security.

Asked whether such a loyalty system has sufficient appeal among consumers to benefit businesses, Giancola points to a survey of 1,000 people, in which 68% of respondents showed an interest in cryptocurrency-based loyalty programs or promotions, with 53% saying they would prefer it over traditional rewards.

Of course, Qiibee is not the only company to enter the space. Others, such as Loyyal, Incent Loyalty, Simple Token and Omise Go are also vying for part of the market with cryptocurrency-based offerings. However, Qiibee sees its advantage as being the fact that it’s an open loyalty platform on which others can build their own loyalty applications.

“The beauty of our protocol is that anybody can use it to integrate their existing loyalty program or build a new one from scratch,” Giancola says. “Small brands that do not have the funds to build their own bespoke loyalty programs can join already existing loyalty applications or choose to use alternative white labelled programs.”