The second edition of Blockchain Loyalty, the definitive source on this exciting subject, is now available. This edition is very comprehensive, and features an entire chapter on Loyyal, explaining in detail how this enterprise blockchain platform can be integrated with a loyalty management system to facilitate secure, real-time, auto-reconcilliated transactions, generating business efficiencies and an improved member experience.
Excerpt from chapter: Enterprise Blockchain Loyalty Solutions
The global leader in this area is Loyyal (www.loyyal.com). Founded in 2014, Loyyal is an enterprise-grade Blockchain as a Service (BaaS) platform with a significant client portfolio including a major middle-eastern airline, Star Alliance, Deloitte, a large Canadian bank, Hawk Incentives (a Blackhawk Network company) and Bond Brand Loyalty. Loyalty & Reward Co were engaged as consultants in late 2018 by Australian company Reffind, a 15% stakeholder of Loyyal, which provided us with the opportunity to gain access to the team and platform to really understand the company’s potential.
Loyyal’s patented Hyperledger-based platform is designed to extend and enhance existing CRM, loyalty and enterprise resource planning (ERP) platforms rather than replace them, an astute strategy considering the millions of dollars many programs have invested in their legacy systems. Importantly, Loyyal avoid competing with these program operators by not playing in the cryptotoken loyalty space. This is a smart move, particularly in light of the struggles facing cryptotoken loyalty programs that are failing to grow their merchant and member bases while suffering large-scale crashes in their cryptotoken prices.
Loyyal’s grand vision is to build the Internet of Loyalty®; a global permissioned blockchain of program operators connected to a large base of earn and redemption partners. Any business connecting to the Loyyal platform will be able to automatically access any other business that is connected (providing that permission has been granted).
Loyalty program operators face a range of challenges. Current loyalty legacy technology is expensive to manage, scale and integrate. Any significant innovation is generally constrained by fragmented technology. The onboarding of earn and redemption partners can be complex, slow and expensive, especially if supporting real-time earn. Program interoperability, such as the processing of earn and redemption transactions between airline partners, involves inefficient, varied protocols which require entire teams to manage them.
Furthermore, coalition loyalty transactional processes are based on 1980’s designs, back when frequent flyer programs were first invented. Loyalty program operators struggle with reject and reconciliation issues caused by data mismatches, which require significant manual processing, costing time and revenue. On the member experience side, points and miles can take up to 30 days to hit accounts in an era where immediacy is a consumer expectation.
There are an estimated US$500bn of points and miles in circulation and over 3.8bn loyalty accounts in the US alone. In this massive, global loyalty industry, small efficiency gains can deliver multi-million dollar benefits, making Loyyal’s platform potentially very valuable to major loyalty program operators.
The Loyyal platform integrates with existing legacy loyalty systems to deliver faster onboarding of new earn and redemption partners, streamlined reconciliation and settlement processes and simplified data sharing among partners with reduced IT time and effort. It also supports the enablement of multi-program promotions more easily with shared liability, the ability to develop broader insight into member behaviours (including across partner programs) and the capacity to generate real-time, targeted promotions.
One company utilising Loyyal is a major middle-eastern airline that has managed to replace their two-way cumbersome reconciliation and verification process with a single step, a solution which saves them and their partners countless hours and revenue, while improving the member experience by reducing the incidence of errors.
Another company connected to the Loyyal platform is Hawk Incentives, a subsidiary of Blackhawk network, the largest supplier of gift cards in the world. Rather than having to connect to individual loyalty platforms, any loyalty operator connecting to the Loyyal platform can now allow their points and miles to be redeemed on Hawk Incentive gift cards. Programs can choose to offer physical or electronic gift cards from over 120 brands or Visa/MasterCard prepaid debit cards.
Loyyal are operating on a global level with a presence in the US, UK, Europe, Middle East, Asia and Australia/NZ. Their reach includes reseller partnerships with IBM, Deloitte, Cap Gemini and REFFIND.
I interviewed Gregory Simon, CEO and Founder of Loyyal Corporation regarding his inspiration for starting Loyyal and his thoughts on blockchain loyalty.
‘The inspiration was my personal experience in being confused and frustrated with existing loyalty programs. The ability for blockchain to potentially move value efficiently and securely was an obvious solution to some of the underlying causes. Most of the industry will remain as actively-managed branded programs. These programs are the bulk of the industry for a simple reason; consumers are loyal to the brands they interact with and consume. I believe operators of branded programs will adopt blockchain technology as their underlying architecture. This does not make loyalty points cryptocurrencies, however. Eventually, the entire industry will be blockchain-based and nobody will notice. If done properly, the consumer need not even know blockchain is powering their favourite loyalty programs. It will disappear in the background, just as the internet has behind our smartphones and TVs. Points are still points, only better.’
Loyyal are also successfully securing patents around the world. In December 2018, they announced a new patent had been approved in Japan. The award by the Japanese Patent Office of Patent for Distributed Ledger Protocol to Incentivize Transactional and Non-Transactional Commerce was yet another addition to Loyyal’s growing portfolio of intellectual property, alongside other associated patents at various stages of approval in over eight territories globally.
‘Having the scope of this innovation recognized by the Japanese Patent Office is a major step forward for Loyyal,’ said Thom Kozik, Loyyal’s Chief Commercial Officer. ‘Given the innovation and leadership Japanese firms have historically shown in consumer loyalty programs in the retail sector and elsewhere, we are excited about the new opportunities and partnerships this opens for Loyyal in Japan, and in Asia at large.’
Soon after receiving the patent approval, Loyyal secured investment from Japanese firm Recruit Co., Ltd. Recruit is a $40bn market cap Japanese company with a dominant presence in the HR, Media and Solution, and Staffing Services technologies. Recruit has strong brand name recognition in Japan. Using Loyyal, Recruit plans to aggressively enter the Japan incentive management industry, which kicked off in March 2019 at Recruit’s annual conference in Tokyo.
Japan is the second largest loyalty market in the world and very invested in the future potential of blockchain. Loyyal is well-placed to capture a sizeable share of the market with their world-class enterprise blockchain loyalty platform.
As mentioned earlier, Loyyal’s tech stack is designed to enhance, rather than replace, legacy loyalty platforms:
An API layer connects to the legacy loyalty platform, providing the loyalty program operator with access to an Admin Console (providing basic member management capabilities and operational metrics such as overall transaction volume and processing velocity) and Program Manager. The Program Manager enables the definition and configuration of incentives and other aspects of an incentive campaign. It also allows for management of member balances and other data, providing the security controls to selectively share that information with earn and redemption partners.
The book also features chapters on the below:
- the basics of blockchain and cryptocurrencies
- the history of loyalty currencies
- a world-first blockchain loyalty research project
- interviews with blockchain loyalty companies
- the essentials of running an Initial Coin Offering
- business models including tax and legal considerations
- blockchain marketing gamification basics
- enterprise-level applications by major loyalty programs
The second edition of Blockchain Loyalty can be purchased from the leading bookstores by following the link.