The blockchain changes everything. If we believe the hype of crypto-evangelists.

But there is some truth to the rumor… beyond a few inflated cryptocurrencies and overpriced NFT art auctions, real business opportunities are starting to emerge. And some of the most exciting of these are in the world of customer engagement and loyalty. Whether that’s simply swapping traditional loyalty points for branded tokens (imagine Nectar points becoming $Nectar tokens), or building the infrastructure to design a whole new engagement programme from scratch.

Web 3.0 will bring two big disruptions to the loyalty industry. One internal and often overlooked, and the other external which is often overhyped. Looking at what these are, and how they’re being applied by brands with varying levels of success, can help us create a roadmap to the future.

Firstly, the blockchain can provide a huge number of internal operational efficiencies for a business running a loyalty programme. Secure decentralised databases will ultimately enable simpler, speedier systems with the ability to work more flexibly across multiple touchpoints and partners without relying on a slow central ‘command and control’ approach.

And because the blockchain is intrinsically more secure and transparent than a traditional centralised database, it can reduce the expense of fraud, abuse and double-spending in points based programmes. Not to mention fostering stronger relationships with partners and consumers.

Secondly, Crypto-Loyalty allows us to reimagine the external relationship between brand and consumer. The latter will no longer just consume what the brand offers them, but also collaborate and influence what they do. Whether that’s by giving people a financial stake in the products they buy, or supercharging engagement programmes with voting capabilities and dynamic benefits linked to an individual.

But readers beware. Whilst the theoretical potential for Crypto-Loyalty is enormous, the current reality is… limited. Most of today’s offerings might best be described as superficial and gimmicky. This risks us dismissing the opportunity of the blockchain, so it’s important we can see past them to the potential that lies ahead.

Socios.com is a frequent poster child for Fan Tokens: tradable digital assets with a utopian vision of allowing sports fans to influence their team – including high profile partnerships with Barcelona, Juventus and Arsenal. But this is not Crypto-Loyalty. It’s a cryptocurrency marketplace masquerading as fan engagement. The types of influence available are surface deep: choosing songs for the locker room playlist, or suggesting a message to be printed inside the captain’s armband. It’s no surprise that all Socios Fan Tokens have depreciated in value since launch.

Ultimately, and ironically, the framework for the future might involve going back to the inspiration behind the Socios.com brand name. ‘Socios’ translates as partner or member. Long before the blockchain, this was the term for the 144,000 Barcelona fans who form an assembly of delegates to elect the president and vote on issues that face their club. Demand is so strong that there’s a minimum three-year waiting list. An enticing taste of the level of engagement that Crypto-Loyalty could deliver, if we get it right.