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  • dan40268

The Shameless Secrets your Loyalty Programs don’t want you to know...

Updated: Jun 29, 2022

Forgive the "click-bait" title but people have really gotten short attention spans. Before we start the "shame-game", please be advised that at the end of this short blog entry, we will share a much better way to create a next-generation Loyalty Program or other Ecosystem. A next-generation ecosystem that specifically avoids some of the “features” shared by too many Loyalty Programs out there. (Disclaimer: The "secrets" revealed here are actually not secrets. They aren't shameful or shameless either. Just my attempt at humor.)

Strategy of the current generation Loyalty Program – Of course all Loyalty Programs have increased revenue/profit as their goal. This is assured under every corporate charter. The approach each Loyalty Program employs to pursue this profit objective can differ. Ultimately, from a consumer/member perspective, some Programs are much better than others.

Here are a few “secrets” that most Loyalty Programs share:

Secret 1: Point Expiration – There is no reason to expire points that have been earned/given since ultimately, we are trying to get customers to be loyal. Expiring their points does nothing to improve customer/member experience.

Secret 2: Non Transferable – I should be able to send my points to a friend or relative (or buyer for that matter). The purpose of issuing the perk was for it to be used. Allowing transfer makes the ecosystem stay dynamic or vibrant.

Secret 3: Privacy – Many Loyalty Programs are interested in capturing (and selling) information about their members. They use this information for marketing. There is a large potential for misuse of this data and numerous hacks can be easily confirmed via quick google search.

Privacy is very important

A suggested Strategy for a next-generation Loyalty Program - This general approach is simple and will work for any Consortium or Ecosystem, including Loyalty Programs. The strategy is to reward the stakeholders of the system according to their contributions to the success of the ecosystem or program. In this example, the rewards that the ecosystem or program allocate to contributing participants are called “Loyalty Points”. These rewards could be any form of asset.

As a starting point we assume the following 4 Stakeholder groups are equally contributing to the success of the ecosystem:

  1. Ecosystem management and employees or contractors

  2. Shareholders and other ecosystem value-holders

  3. Members/Customers

  4. Ecosystem vendors and supplier participants

We can then allocate each dollar of Ecosystem profit 25% to each of the four groups on an ongoing basis. As a starting point. Subsequently, we can install an automatic adjustment mechanism or define a DAO to adjust the Stakeholder allocation to optimize the ecosystem.

What does this new strategy hope to accomplish? In a world already over-crowded with Loyalty Programs, are you going to introduce another “me-too” program? You need a game-changing program. The above program STRATEGY aligns with the direction of the world and technology. Your ecosystem is a financially self-sustaining model. It is not dependent on gimmicks and marketing. Your program will stand on its merits and its value. It will be based on math and consumer preferences.

Approaches that might help your program survive when loyalty judgment-day comes:

Talk about Loyalty - Gotta LOVE Bruce Willis

Approach 1: No Point Expiration – Don’t expire points/benefits. This practice has always seemed reasonable on first examination but does not seem logical upon further consideration. Probably this “feature” was inserted by the accounting department somewhere in the past. We recommend the automatic/easy conversion of loyalty “Points” into “equity” within the ecosystem.

Approach 2: Points/Benefits Transferable – Allow members to share/trade/sell points or perks you have provided to them. With the advent of blockchain and NFT, the perks you issue can increase program velocity if allowed to be transferred or even sold. Reward all the participants for (frequently) transacting using the “Points”.

Approach 3: Privacy – Respect your members/customers privacy. Allocate points or other perks as an incentive to members allow you to provide offers and other marketing material. For example, points are given to them if they opt-in to a birthday promotion etc. Keep only anonymous transaction information (on the blockchain) and allow members to be truly forgotten.

Assertion: The ecosystem or loyalty program that distributes the rewards and benefits most equitably to all the Stakeholders and participants, has the potential to be more successful than a monolithic one.

Do you agree?

If you happen to care about any of this stuff, I would love to hear from you. Just drop me a DM on LI (Disclaimer: The information in this blog post was solely manufactured and distributed by the author. Moreover, they are "like just my opinion man")

Setup your own ecosystem on a blockchain - Pravici TLP

Whether you want to build a new blockchain-based ecosystem or extend an existing Loyalty Program to the blockchain, Pravici TLP can get you there.

Visit or to learn more.

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