Designing a Blockchain-Based Customer Loyalty Programme using Design Science Research Method

Abstract

Loyalty programmes are crucial marketing tools for businesses to increase customer engagement and retention. These programmes, sponsored by enterprises, offer rewards, discounts, and other incentives to attract and retain customers. However, the lack of interoperability among loyalty programmes of different organisations can limit the customer’s ability to maximise the value of their loyalty points. In this study, we proposed the design and implementation of a blockchain-based platform using the design science research (DSR) method as a candidate solution to overcome the limitations of conventional loyalty programmes. Using smart contracts, the design enables organisations to embed all necessary attributes for their desired customer loyalty programmes in accordance with their policies. The designed platform provides a decentralised, transparent, and secure environment for the exchange of loyalty tokens between various organisations and customers. Using expert opinion methodology, we discussed the technical considerations and implementation of the blockchain-based loyalty programme platform, as well as its potential impact on the customer experience. Our findings suggest that the proposed platform can improve the interoperability of loyalty programmes using a universal token that creates more value for businesses and customers. The research contributes to the field of loyalty programmes and blockchain technology by proposing a platform that enable businesses to develop more effective and data-driven loyalty strategies, while providing customers with better value for their loyalty points.