Loyalty 3.0 has arrived on Campus.

Loyalty 1.0 was launched in the 1930’s by Sperry & Hutchinson with their S&H Green Stamps. Customers would receive stamps at the checkout, which could be redeemed for products in the catalogue. This type of program design persists to this day (including the humble coffee card). This type of program’s core failing is it only rewards the most loyalty, high-value customers. Most of the customer base receives nothing as they’re not spending enough with the company to earn a return. A large percentage of members who join the program end up disengaging as they don’t successfully access any value.

Loyalty 2.0 came to prominence in the 1980’s with the rise of the coalition program. The most successful example of this program design are the airline frequent flyer programs. By creating a desirable currency, airlines sell points for vast amounts of money to partner companies. These partner companies award the points to their customers to stimulate repeat purchase behavior. While hugely successful, the popularity of coalition programs is on the wane as members become increasingly disenfranchised by the airline’s tendency to continually reduce the value a point is worth when redeemed. One popular airline program offered a $100 department store gift card for 13,500 in 2011. By 2017, they now demand 17,500 points, meaning 30% more points are required for the same reward.  The obvious erosion of value is generating significant dis-loyalty to the airline programs.

Loyalty 3.0, the rewarding of loyal members with a free-floating digital currency, is possible thanks to the invention of blockchain, or distributed ledger technology. Before this, creating a trustworthy digital currency has been difficult. Unlike Loyalty 1.0 and Loyalty 2.0, Unify Rewards provides genuine value by rewarding members with a currency the value of which is determined by market forces rather than the program owner.

For this trial program Unify Rewards has chosen to use Ether as the currency. Ether is a digital currency used by developers who want to access to the ethereum blockchain to interact with smart contracts built in that language. Ether is traded on a number of digital currency exchanges and the price fluctuates with the demand for the currency. Like other digital currencies, Ether can be bought, sold, transferred, traded, gifted and sent electronically anywhere in the world to another person with a digital wallet address. Because Loyalty 3.0 is new, the Unify Rewards program is being initially run as a trial at UNSW, Sydney, Australia. Results of the trial will be published in the Research section of this website.

Unify Rewards has been developed by Andrew Lowe (CEO & Co-Founder LoyaltyX) and Philip Shelper (Chief Design Officer LoyaltyX). Learn more about LoyaltyX here.