Conventional travel loyalty programs have long been a topic of debate and
criticism.
Consumers are regularly frustrated by complex rules around earning and
burning points, limitations on transferability and interoperability and –
particularly with travel limited by the pandemic – concerns about points expiring.
Meanwhile for travel brands, loyalty programs can be expensive to operate
and attractive targets for hackers.
And complicating the topic further is the question of whether these programs
do in fact turn consumers into loyal customers – ones that will choose their
brand over others again and again.
According to Phocuswright’s report, Loyalty
Programs Revisited: Key Metrics and the Impact of COVID-19, from March
2021, 89% of travelers belong to at least one travel loyalty program.
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Says the report, “The pandemic has
opened a window for travelers to consider new brands. In turn, there is the
possibility for brands to gain new customers and start laying out their paths
to loyalty. Overall, one in three travelers agree that they are more willing to
try new travel brands now, and business travelers especially have an appetite
to experiment. Half of business travelers agree that they are now more open to
trying new travel brands due to the pandemic.”
As brands reevaluate their loyalty programs, could
blockchain-based tokens become the new, better form of loyalty currency?
Mark McLaughlin thinks so.
McLaughlin is founder and CEO of Coras, a platform that enables brands such as Ryanair and Rakuten to sell tickets for attractions and events, and now he’s also
developing a loyalty token known as Fida.
His goal is to use this token to demonstrate to brands in
travel and other areas of e-commerce that a loyalty program based on
decentralized finance (DeFi) can solve the issues of transferability, interoperability,
expiration and security – and in the process make consumers much more loyal.
McLaughlin joined PhocusWire’s Mitra Sorrells on our latest PhocusWire Pulse: Emerging Innovation online
event to explain how token-based loyalty will work.