Why Blockchain will revolutionise customer retention and CRM
Blockchain is going to profoundly change the world.
A bold claim but one that we feel is justified. So far, blockchain has been the domain of the fintech industry but this is starting to change.
Indeed some of the biggest opportunities are within marketing: developing customer-centric propositions and relationships that empower and motivate customers while also delivering massive efficiencies and responsiveness.
Yet, most marketers aren't yet familiar with Blockchain and the opportunities.
This post reveals exactly what Blockchain is and how we think it will fundamentally change our approaches to customer retention and CRM.
The technology most likely to change the next decade of business is not the social web, big data, the cloud, robotics, or even artificial intelligence. It’s the blockchain." – Harvard Business Review, May 2016
The UK Government defines a block chain as a type of database that takes a number of records and puts them in a block (rather like collating them on to a single sheet of paper). Each block is then ‘chained’ to the next block, using a cryptographic signature. This allows block chains to be used like a ledger, which can be shared and corroborated by anyone with the appropriate permissions.
So in layman's terms:
- Digital assets (money, music, loyalty points) are distributed across a global ledger;
- Transactions posted globally across millions of computers;
- A block is created every 10 mins and linked to a time-stamped chain of blocks;
- Smart contracts are self-executing agreements between companies and people that use the blockchain;
- A blockchain can be permissioned (closed access) or permissionless (open to all).
For every industry the implications are quite profound:
- It is a disruptive technology as it removes intermediaries and their costs (an oft cited use case is that consumers can transfer money direct without the need for a bank);
- Blockchain technology will enable consumers to own and monetise their data;
- Peer-to-peer dealings can become the norm;
- Privacy will be porotected and, due to the distributed nature of the blockchain, the technology is very secure and unhackable.
At this point your head may be spinning so check out these great videos for more detail.
So why should marketers take Blockchain seriously?
Blockchain isn't an emerging idea or a theme that is being hyped by the tech industry. It is a reality.
Research by Deloitte shows that in 2016:
- A billion dollars in venture capital has flowed to more than 120 blockchain-related startups, with half that amount invested in the last 12 months.
- 30 of the world’s largest banks have joined a consortium to design and build blockchain solutions.
- Nasdaq is piloting a blockchain-powered private market exchange.
- Microsoft has launched cloud-based blockchain-as-a-service.
- Blockchain concepts, prototypes, and investments are emerging in every major industry.
But as well as being a reality, Blockchain creates viable and disruptive opportunities for marketers to build and deliver customer relationships.
Due to the peer-to-peer nature of Blockchain, these opportunities are customer-centric and will deliver genuine engagement for the brands prepared to invest in long-term customer experience and loyalty.
So how will Blockchain disrupt customer retention and CRM?
This is a brilliant illustration from Deloitte of what a Blockchain-enabled customer experience could look like:
[Click to enlarge]
We think that the following use cases exist in the retention and CRM spaces:
- Loyalty points as global payment currency.
- Peer-to-peer loyalty point exchanges.
- Merchants rewarding customers at point of transaction.
- Indisputable customer databases (single customer views or customer data platforms) where customer queries and service issues can be identified rapidly and without ambiguity.
- Single customer wallets managing multiple membership progammes.
- Brand coalitions that offer customers a more complete experience.
With such significant opportunities come some profound implications. These implications will determine which brands lead and are able to differentiate their customer propositions through the use of this technology.
Adopting Blockchain to build customer propositions is likely to:
- Increase redemption of incentives, rewards and promotions. Customers will be able to exchange these offers and this will increase redemption. This will be seen as positive (rather than a cost) to brands that recognise this will bond and engage customers.
- Mean that the experience and interactions anre increasingly controlled by consumers not brands. In a Blockchain world there is very little need for intermediaries who dictate processes and add costs.
- Require brands to genuinely engage and build long-term loyalty - not the promise of great rewards that are never fulfilled.
- Mean that there is more transparency and accountability - an end to hiding behind obscure terms and conditions. Auditable, self-executing contracts will be the norm between consumers and brands.
- Unique, tracable customer rewards - for the first time companies will have a real-time view of behaviour, incentives and rewards by customer.
- Completely new customer journeys - where once customer journeys were linear with 'moments of truth' managed by the brand, customer experience will be much faster and more responsive with increased demands on automated contact strategies and business rules.
Blockchain is a big deal for marketers
In creating an indisputable record of relationships, behaviours and value exchange, Blockchain will disrupt customer marketing like no other technology.
It's a reality and it's going mainstream.
Most excitingly, consumer-driven and peer-to-peer relationships are becoming possible in ways that we can only start to imagine. The onus will be on marketers to do what they do best: understand customers and build propositions that support repeat engagement.
Want to learn more?
Come to Conduit's next Meetup - it's free and will give you the inside track. Full details here.
This post originally appeared on the Conduit blog. Republished with kind permission.