If you think blockchain is something that’s happening only in the financial industry, you couldn’t be more wrong! The technology is all set to disrupt almost every business that deals with data transactions. According to a recent study, the global blockchain market is expected to register an annual growth rate of 55.59 per cent between 2017 and 2021. Gartner even named blockchain as one if its top 10 strategic technologies for 2017.
Wondering how a decentralized ledger verified by a network of computers across the world can disrupt marketing and customer relationship management? To answer that, we first need to understand how blockchain works. Experts liken it to a public ledger that everyone can see and share with all users. The record is stored in a chain-like configuration, in ‘blocks’. And here’s the USP: It can only be built upon, not changed.
Hailed as the ultimate peer-to-peer network, blockchain is heralding pioneering opportunities for marketing strategies and consumer behavior, courtesy innovations such as smart contracts, cryptocurrencies like bitcoin, and platforms like Ethereum. Enterprises willing to invest in long-term customer retention and loyalty need to brace themselves for the change. Here’s why:
With blockchain, you can bid adieu to the middlemen (and the associated costs). In other words, there’s just the buyer and the seller. Peer-to-peer dealings will become the norm; as will smart contracts – which are self-executing agreements between users of blockchain – that guarantee complete transparency and accountability.
For digital marketers, this could mean communicating directly with website owners, without intermediaries like Google or Facebook. Imagine not needing a bank for financial transactions! Blockchain has the potential to create better value for ad campaigns – minus the inefficient and opaque marketplace crowded by middlemen. Not to forget, the increase in profit margins for enterprises.
Globally, startups are already venturing into this open-source, peer-to-peer network, to offer merchants and customers a novel shopping experience. While financial dealings are made using the cryptocurrencies, all the associated data is distributed across the global network instead of being stored in a central database.
Safe & secure
What if you never had to worry about your data getting hacked? With blockchain, it’s a real possibility. Even though the blockchain ledger is public, the distributed nature of the technology makes it less susceptible to cyber crimes. Besides, the data is verified and encrypted using advanced cryptography. As far as fraud prevention is concerned, blockchain’s unique verification capability prohibits illegitimate users from wreaking havoc.
Unlike data on a traditional centralized server, blockchain makes data storage more safe and secure. It’s not easy to tamper with data in a distributed ledger that has built-in algorithms to check accuracy and approval. Automation also mitigates the risk of human error.
Money for data
One of the biggest blockchain revolutions is, perhaps, the technology’s potential to enable consumers to not only own their data, but also to monetize it. Experts believe that within a decade, marketers may have to pay the user to consume their advertising material.
Contrary to the current scenario, blockchain can develop an architecture whereby enterprises go to the user for their information. Catchphrases like user-centric and user-controlled will become more than mere marketing jargon. In a world where blockchain-based identity is owned by the user, marketers will have to engage with customers in novel ways. It’s just a matter of time before the customer charges the marketer for access to his data in the blockchain.
Unified customer profile
What’s in it for the enterprises did you ask? Well, that elusive thing called unified customer profile – a holistic picture of the customer. The biggest differentiator from other marketing tools is that this data comes from the customer himself, not from third parties.
Naturally, this will pave the way for completely new customer journeys that are quicker and more responsive. Indisputable customer databases will facilitate customer queries and service issues to be dealt with swiftly and purposefully. As enterprises get real-time views of customer behavior, the onus will be on the marketers to plan and implement innovative strategies that lead to engaging customer relationships and better retention.
In the near future, loyalty points could become the global payment currency. With the adoption of blockchain, there is expected to be an increase in the redemption of incentives, rewards, gift cards and loyalty programs. It’s a great opportunity for brands to build long-term loyalty.
Experts predict that merchants rewarding customers at the point of transaction will become the norm, as will brand coalitions and peer-to-peer loyalty point exchanges. If the idea of managing multiple membership programs seems daunting, don’t worry! Single customer wallets promise to make the task stress-free.
Matter of trust
What’s the most challenging aspect of a marketer’s job? To build trust in the products and services of an enterprise. Especially in today’s day and age, when information overload and skepticism have become a way of life.
Blockchain, with its tamper-proof processes, allows for a level of transparency and accountability that is difficult to establish in the traditional business setup. For instance, Walmart recently teamed up with IBM to make their supply chain process more transparent. The company used blockchain to digitally trace where their pork products came from – starting at the retailer’s base in China – to win customer trust.
Similarly, when it comes to corporate social responsibility (CSR) initiatives, blockchain can be used to create digitized contracts that are open to the public, thereby ensuring greater accountability and trust.
To wrap it up
Just like the internet revolutionized the way we live, blockchain has the potential to redefine customer expectations and how enterprises meet those expectations. These are exciting times for marketers as they will be challenged to engage with customers in inventive ways, enhancing customer relationships, loyalty and retention. Are you ready for the new wave?