Bitcoin was first accepted as a legal tender by El Salvador in September 2021. After this, there have been a lot of changes in the crypto dynamics. It has generated curiosity amongst consumers and businesses about this new-age digital currency. Prominent business owners who operate in Bitcoin or other cryptocurrencies have considered making incentive strategies like multiple crypto reward programs.
Crypto and Bitcoin have gained more attention from financial institutions, investors, startups, merchants, and fintech. There has been significant growth in the customer base after these domains started the crypto reward programs for their customers.
In this blog, let’s dive deep to find out about the incentives for customers to pay with Bitcoin.
Incentives are a part of strategy businesses include to gain customers and keep them involved for a long time. There are multiple tools and ways used to find out the best method which helps Bitcoin to incentivize among this big platform. Let’s take a look at some of them.
Blockchain has cut down the mediator’s issues, lowering the charges applied per transaction. All the transactions run smoothly on the blockchain with the help of miners and validators. They got their reward for this contribution they made towards the network. Other than that, many crypto enthusiasts earn incentives by uncovering security flaws in the form of bounties. Or they get the new coins through airdrops.
When the users are exposed to the advertising, they have the opportunity to get paid in tokens. Customers can decide the data they want to share with the brands, and it helps them get the brand target more effectively.
Proof-of-work or PoW is when miners compete with each other to be the first person who solves a complex mathematical puzzle using advanced computation powers. The miners who win and do it first receive their incentive in the form of cryptocurrency.
Major crypto networks like Bitcoin and Ethereum use this algorithm to provide valid rewards to the miners. It secures the transactions on their platform, and without implementing any other intermediary, the transactions at these networks get validated.
PoS, popularly called proof-of-stake, provides an advantage of incentive more than PoW. Here miners are chosen to mine a block based on the stake of coins they possess. These miners will receive rewards in the form of cryptocurrency. This provides the whole incentive to a single miner, which is more benefitting.
The drawback of this method is that miners who possess more coins get frequently selected, and it can lead to a monopoly in the market. This implies that few validators will always get a significant share of incentives. This will prevail against the 51 percent attack in the market.
Many crypto startups want to hold crowd sales; these targets are tried to be achieved through utility tokens. These can then be spent in exchange for other goods or services. The public will embrace crypto payments when they are incentivized, and this first makes them aware of the new form of payment.
Shopping and other services are what most people need on a daily basis. Hence, if startups bring out something new for their customers to try, it will benefit their businesses, and generating rewards in digital currency helps expand it globally.
Any business that wants to flourish always comes up with new ways to be seen in the market. Digital marketing is a part of that, and now, with the advancement of technology, many have adopted the option of paying with crypto. To promote it, they provide incentives over the selected payment methods.
Consumers and brands are in consideration of this future money. There are certain benefits that they see in incentivizing Bitcoin.
Using crypto with cards can get discounts or other cash-back rewards. This allows users to invest in digital currencies. The main benefit of card linking is that Bitcoin can be traded, withdrawn, or spent. In some instances, it can be used as collateral on loans. These rewards can be used in any possible way by the customers.
Bitcoin possesses global characteristics, removing the financial barriers of sharing data with others. It builds more virtual and international partnerships. The received Bitcoins can be redeemed at any retailer that has partnered with Bitcoin anywhere in the world. This helps in spending the required money based on your consumption habits and needs.
Security is the central lookout point when it comes to cryptocurrency payment. Limiting a company’s financial liability will potentially prevent incidents of data breaches or other security hazards. Hence, businesses can withdraw encrypted money from their accounts by rewarding Bitcoin. This will help them to earn more by acquiring more customers rather than storing the currency in their accounts.
Companies that want to enhance their customer engagement strategies implement crypto and Bitcoin reward programs. In the USA, nearly 70% of consumers are familiar with the use and advantage of bitcoins, and other populations can be made aware of your products by the incentive programs of crypto rewards.
Designing an incentive program needs a lot of financial planning, and emerging businesses are coming up with new reward strategies using digital currencies. It enhances the engagement of the market with targeted customers.
This is a loyalty program where customers receive cash back when they shop from a particular retailer. In crypto, new coins are evolving day by day; by following this trend, many companies have started their coins to make their crypto reward program accessible to all.
These rewards are in the form of a percentage when a purchase is made using the services the company provides. For example, if you use a service provider and one of its facilities, the user will receive cash back; these rewards can be processed in their currency and other forms.
To support the operations of a cryptocurrency wallet, validators hold it in the wallet. When these users hold more currency, it provides their computation power to the network; they can verify other transactions using that. By doing this, they received rewards in the form of bitcoin or other crypto.
This is a very well-functioning program for incentives, as users who own a few coins can stake them and earn at the same time by working with a cryptocurrency platform. Crypto stacking works with platforms that operate on PoS features.
Multiple industries are coming up with unique reward programs; in this series, credit cards are also joining in with different kinds of rewards. A customer can earn an incentive every time they use a credit card in two ways. The first one is digital asset rewards, where you get the incentive in any form, like coins, tokens, currency, or other assets.
In the other way of getting rewards, the company provides you with some cash-back on each transaction. This form of reward exists in fiat but is also now implemented in digital currencies.
Travel companies have also implemented the reward system in their domain. Some of the companies provide a varied range of discounts on flights and stay when paid in Bitcoin or other cryptocurrencies. At the same time, others offer reward points that can be redeemed for travels or various purchases.
Multinational hospitality and travel companies have tied up with reward platforms where they can offer rewards to their customers.
In the corporate world, crypto is provided in the form of appreciation rewards to their employees. They prefer NFTs; these are non-fungible tokens that can not be transferred, such as art, collectibles, and virtual world assets.
Certain tech-savvy companies have started providing NFTs to employees who perform well in their roles. Although these tokens are not interchangeable, you can monetize them by returning them to the company after some time or at the time of switching.
Initially, businesses traditionally used tokens and loyalty incentive programs to improve their customer base. These programs have developed a lot in the past few years; to be updated with that, organizations are creating specially curated incentive programs.
Customer insights and data analytics are essential in identifying individual interests and purchasing tendencies. This helps to create personalized reward offers to different customers. Personalization helps in retaining customers and also enhances the development of loyalty programs.
By this, you can understand the buying behavior of your customers and then plan rewards by integrating their payment data. These special offers can be provided to repeat customers on their highly bought products or can suggest new products to try out. Some startups promoting crypto offer rewards if the customer pays through that payment system.
This encourages customers to use a crypto payment method and get incentives by paying in Bitcoin.
Adding up activities related to integrated payments makes your platform more engaging and fun for customers. In many payment gateways, the gamification of rewards has gained much popularity. Currently, businesses focus on joyful customer competition by providing incentives through game-like elements.
These are like accumulating points, challenges to reach, and leaderboard rewards. Customers who join any of these programs gain timely rewards based on their payment behavior. The advantage of these interactive features is that it promotes a sense of achievement amongst the customers and their regular operations with the program.
With the help of VR and AR, businesses are creating an interactive virtual world for users. They eventually earn rewards when they can interact with the brand and its products and make the required purchase based on their payment method.
Businesses hold their trust in blockchain-based loyalty program providers as they are benefited from their cutting-edge technologies. They establish digital assets for their internal ecosystem and reward the customers with loyalty tokens. These can be redeemed for various advantages, discounts, exclusive stores, and many more.
Blockchain allows the interoperability of these tokens; hence users can use it across various businesses and brands. It is the most secure way for companies to establish a reward program with blockchain, allowing the customers to have a consistent and streamlined experience.
As a result of the most recent events in the financial world, businesses have devised many tactics to enhance customer engagement. Integrating the payment program with reward points is one of them. It has increased the potential for an organization and encouraged the customers for more revenue development. This leads to the compilation of targeted offers and enables the customers to pay by Bitcoin for these advantages. Businesses are creating a dynamic world of rewards that not only repeat their business but also improve user retention over their programs to promote payment with Bitcoins.