The Future of Customer Loyalty: Predictions and Trends for Crypto Loyalty Programs

It is important for companies to show benefits, encourage repeat actions, and keep customers from moving to competitors. To do this, they create bonus systems – loyalty programs. This helps companies gain the trust of the audience, improve their image in the market, and stand out. In turn, such programs allow companies to track customer activities.

In this article, we look at examples of existing loyalty programs in the traditional and cryptocurrency markets, their similarities, and their pros and cons.

Overview of customer loyalty programs in traditional and digital markets

In the traditional and digital market, we can meet the following popular types of customer loyalty programs (can be used several at once):

• Paid: operates on a subscription basis. The client pays a fixed amount with a certain frequency — a subscription fee — and receives advantages: bonuses, a high level of service, and VIP access to resources and services.
• Cashback/bonus: Based on the mechanics of partial return of the cost of goods to a bank card in fiat or to a digital balance. The percentage of cashback can be fixed or cumulative: its size depends on the amount of purchases. This mechanic encourages the client to raise the check.
• Multilevel: With this loyalty system, a company can elevate a customer’s status and expand their privileges and available bonuses in response to an increase in their spending.
• Affiliate: Companies combine their privileges as part of a common loyalty program. Bonuses accumulated from one retailer can be written off when shopping in another affiliate store. 
• Co-branded loyalty programs of banks and retailers: The basis is the partnership between the bank and the retailer. For example, Apple has released a card in conjunction with Goldman Sachs. The card had a unique design and deep integration with Apple services.
• Umbrella: Combines several brands of the same corporation or group of companies. A subscriber of one service receives points for using all related ones and can spend them on any services in the ecosystem.
• A closed club — a member of the bonus system saves points, increases the discount, and gets access to offers of a closed club of privileges: parties, tastings, and exclusive pre-sales.

Overview of existing crypto loyalty programs with benefits and challenges faced by current programs

Among the crypto loyalty programs, you can find the following types and mechanisms:

• DeFi rewards: Can be earned by engaging in peer-to-peer financial activities through decentralized applications (dApps). You can get them by lending to borrowers or combining assets with other lenders to reduce risk. Another way to earn rewards in this program is by income farming or Decentralized Exchange Liquidity Mining (DEX) and receiving commissions or additional tokens as rewards. Engaging with a crypto exchange in Vienna can provide access to local DeFi opportunities and personalized services.
• Cashback: Acts by analogy with the traditional market, but the customers receive rewards in cryptocurrencies such as Bitcoin, Ethereum, or altcoins.
• Airdrop: Developers distribute a certain number of free project coins to attract, thereby stimulating the trading activity of fresh crypto. Sometimes participants may need to fulfill some requirements to receive it: registration, subscription to official accounts on social networks, or distribution of advertising content.
• Crypto faucets: Platforms or applications that offer users a small amount of cryptocurrency for free in return for authentication testing. Usually, the rewards are insignificant, but for a more impressive accumulation, you can participate in several faucets at once.
• Rebates: A system of discounts or cashback from transaction fees or trading commissions. They are provided by some platforms after transactions. Thus, you can generate passive income or reduce trading costs.
• Referral programs: These are typical for game projects. The project participant distributes the referral link and receives in-game bonuses for the activity of new users registered by this link.
• Communities: Participation in the project community often implies ownership of management tokens. Which in itself represents the loyalty of the project to the customers and vice versa. Community members also can receive goodies in the form of indoor events and early access to the platform’s promotions.

All of the above increases the loyalty of customers to crypto projects and the market as a whole. But there are also some challenges:

• Registration in the project with the personal data provision
• The need for initial financial investments: to have a certain amount of crypto in your wallet or to buy a skin and pump it for a fee. The level of rewards will depend on its level.
• The need to be a member of a project community/club
• Risks related to the liquidity of digital assets in which rewards are provided
• The risk of scams both from the project and the participants
• The lack of clarity in the implementation of bonuses for some projects, the unreliability of bonus systems

SwapSpace Invaders Club NFT Loyalty Program

Now let’s look at the reward method using the example of a loyalty program for customers of the SwapSpace platform.

Cryptocurrency exchange aggregator SwapSpace offers 600,000 crypto-to-crypto exchange pairs, providing its users with favorable conditions for swapping crypto. 

Recently, they launched a loyalty cashback program for regular customers — SwapSpace Invaders Club. 

At the first stage of the project’s launch, the number of tokens was limited to 3999, and skins were endowed with special features that are not available in the next stages.

In the second stage, the developers announced the possibility of personalization of Invaders.

On the third — they announced a reward system for Invaders’ owners in the form of cashback of up to 50% of the RevShare. For each crypto exchange, the registered user receives Diamonds, that would help to upgrade your Invader. The higher the Invader’s level, the more cashback from each swap you’ll get. To increase your cashback, buy a subscription for higher levels. There are 6 levels: at the first level, the cashback amount is 15%, and at the last – 50%.

Those who managed to get rare Invader in the early stages received an increased welcome bonus after the launch of Level 3, which can be spent on increasing the level of the invader or on customizing it.

At the same time, bonuses have some limitations. If you do not renew your subscription to your current level, your Invader loses one level every month. When the Invader gets to level 0, it becomes inactive until you upgrade it back to level 1.

Cashback output is possible in your personal account and is available from 10 USDT.

In addition to cashback, participation in the program provides the ability to track the exchange history, request payments at any time, and enjoy 24/7 support.

Thus, the SwapSpace team offers a loyalty system in the form of a cashback familiar, to the masses, with elements of gamification, encouraging customers to use the service.

Trends shaping the future

The struggle for customers is high in both traditional and crypto markets. Providing loyalty programs helps attract and retain an audience. What trends shape the further development of loyalty programs:

• Reward variability: The ability to use received bonuses in different ways increases customer loyalty and increases their number.
• Personalization: Most customers love it when the offer is customized to their particular needs. The system providing the opportunity to personalize rewards attracts and stimulates the activities of the program participant, creating a competitive effect. The SwapSpace’s personalized Invaders are a great example of that. Also, such a system in the future may imply more prerogatives (meetings, special promotions) for participants, which also attracts them.
• Interoperability: The ability to implement the received bonuses on other platforms would be a stepping stone to this great goal. In part, receiving rewards in the form of cryptocurrency already provides such an opportunity, because they can be converted into any others, and interact with other ecosystems.

However, some experts believe that the race to provide rewards can harm projects since many people are ready to move to another project that provides more attractive conditions. However, so far no one is going to abandon this method of attracting customers.