Conference Paper

A loyalty program based on Blockchain and Mobile Phone Interactions

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Abstract

Loyalty cards programs have been used by retailers to increase customer retention. Loyality cards provide means to identify a particular customer and to collect customer specific data, thus enabling individualized marketing; however, operating a loyalty program is complicated for retailers since they require to manage balances, collections, and transfers of customers. Moreover, customers may forget or even deliberately decide to not use their cards mainly because it is uncomfortable carrying a physical card. % % This paper proposes a Loyalty program based on a blockchain that does not require a physical card for identifying customers as it associates customers to their phone numbers. In this perspective, companies can reduce overhead costs involved in managing the loyalty program. This paper reviews the technology required, and describes the implementation of a loyalty program based on blockchains. Finally, it also enumerates the reasons for choosing the blockchain technology for this application.

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... A local Ethereum node can be used for the transactions (Ibarra González et al., 2018); alternatively, a public node can reduce the footprint in a local system. The advantages of using a public node are introduced in the following section. ...
Article
Loyalty cards programs have been used by retailers to increase customer retention. Loyality cards provide means to identify a particular customer and to collect customer-specific data, thus enabling individualized marketing; however, operating a loyalty program is complicated for retailers since they require to manage balances, collections, and transfers of customers. This is exactly the same problem the retailers were facing before credit cards were readily available. A new problem is that customers now have too many cards, customers may forget, or even deliberately decide to carry only a selection of their cards. This paper proposes a loyalty program based on a blockchain that does not require a physical card for identifying customers as it associates customers to their phone numbers, since nowadays people always carry their phone. In this perspective, companies can reduce overhead costs associated to managing the loyalty program. This paper reviews the technology required and describes the implementation of a loyalty program based on blockchains. Finally, it also enumerates the reasons for choosing the blockchain technology for this application.
Conference Paper
Full-text available
In extant loyalty program (LP) studies, one of the main challenges is to keep customers motivated in participation behaviors and achieving financial goals. While some companies have initiated efforts to use blockchain (BC)-based distributed ledgers and smart contract capabilities to reduce LP operating costs and enhance customer experience, academic assessment of BC application in the LP context remains in paucity. In this paper we establish a theoretical framework to explain the effects of BC on LP participation. Guided by the self-determination theory (SDT), we illuminate how the BC-based natures influence the relationship of varying customer motivations (economy, autonomy, competence and relatedness) and perceived value, which consequently induces participation behaviors. We outline 4 propositions to depict the conceptual mechanism based on the theoretical framework, and then employ a case study to illustrate how a BC-enabled LP scheme can help enhance customers' involvement in a point exchange environment.
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This article aims to examine the negative effects of loyalty programs from the perspective of frustration theory. It seeks to develop a model of customer frustration on the basis of frustration theory and an exploratory qualitative study.
Chapter
To foster customer relationships, firms have implemented so-called loyalty programs (LPs). These programs provide monetary benefits (e.g. through direct discounts or rewards) and/or more soft benefits by focusing on creating commitment to the firm among customers through excellent service or giving special treatment to customers. In this chapter, we present a framework of three mechanisms underlying the LP effect. Next, we incorporate a discussion of relatively under-researched areas, such as reward redemption effects and so-called short-term LPs. We discuss models that can be used to examine LP effects and to analyze customer data to support marketing decisions. Finally, we provide a discussion on emerging topics in LPs, specifically addressing increasing digitalization, empowered customers, and the prevalence of big data. We conclude with a discussion on some pressing research questions.
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This study examines the differential effects of the benefits customers receive from a loyalty program (LP) on satisfaction with the LP, trust in the LP, and store loyalty for high- and low-end fashion retailers. With survey data from U.S. LP subscribers, the study tests the relationships using multiple regressions and analysis of covariance. The results show that symbolic benefits are more important for high-end fashion store consumers' satisfaction with the LP; conversely, utilitarian benefits increase consumers' satisfaction with the LP more in low-end fashion retailing, whereas hedonic benefits increase consumers' satisfaction with the LP in both types of retailers. All benefits in both types of retailers affect trust in the LP. Finally, satisfaction with and trust in the LP are important drivers of loyalty to the retailer. The findings have important implications on how managers of high- and low-end fashion retailing can effectively design their LP rewards to maximize loyalty.
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