Photo: Getty Images/whitebalance.oatt
Will shoppers engage with bitcoin loyalty rewards?
Landry’s Inc., the parent of Morton’s steakhouse, Bubba Gump Shrimp and a number of other restaurants, recently introduced the first bitcoin loyalty program in the hospitality space.
Supported by bitcoin startup NYDIG, Landry’s Select Club members earn one point back for every $1 spent at any of Landry’s 500 locations, with 250 points translating to a $25 reward. Customers opting into the bitcoin program can track the value of their points and redeem them in $25 reward increments based on market prices.
Trey Zeluff, director of Digital Asset Strategy at Landry’s, said in a statement, “We view bitcoin as a good choice for a portion of our own treasury, so we want to offer that choice to our customers as well.”
Covering the launch, The Wise Marketer identified three unique attributes about the program:
- Built into the program format is a value-appreciation factor for customers’ bitcoin points, increasing their relative buying power as they mature as members.
- The program provides an interesting test-case to potentially prove the power of bitcoin made readily available in exchange for quick-access consumer goods, like food.
- The fact that Landry’s Select Club members are comprised of patrons from many different brands provides a fertile wellspring of data to better understand how different demographics and audiences respond to cryptocurrency rewards.
A just-released study from digital assets platform Bakkt — which last fall partnered with rewards Mastercard to support crypto rewards — found that, of those who purchased crypto at least one time in the past six months, 72 percent are likely to redeem loyalty points for cryptocurrency and about half are interested in earning cryptocurrency instead of points.
Nancy Gordon, chief product officer for Loyalty at Bakkt, told GOBankingRates, “Rewards is an appealing on-ramp into crypto given that it upgrades what has traditionally been a passive store-of-value into an active store-of-value, that has the potential to increase over time.”
Starbucks, Newegg, Whole Foods, Nordstrom, Home Depot and GameStop are among retailers currently accepting crypto payments.
- Landry’s and NYDIG Announce Bitcoin Loyalty Rewards – Landry’s/ NYDIG
- Bitcoin as Points: Two Notable Loyalty Programs Integrate Cryptocurrency Rewards – The Wise Marketer
- Mastercard and Bakkt partner to offer innovative crypto and loyalty solutions – Mastercard
- Crypto Loyalty Programs are Quickly Garnering Interest – GoBankingRates
- Is it time for retailers to hop on the cryptocurrencies trend? – RetailWire
- Bakkt Study Examines Loyalty & Rewards Preferences of Digital Assets Among U.S. Consumers – Bakkt
Discussion Questions
DISCUSSION QUESTIONS: Is cryptocurrency likely more of an enticement for many loyalty members than cash-back and other traditional rewards? How would you access the pros and cons of offering bitcoin awards?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
Kai Clarke
CEO, President- American Retail Consultants
Loyalty rewards in Bitcoin is actually a clever idea, especially while interest rates on dollars are so low. It’s basically free money and well worth taking a gamble on. It has the additional advantage of being instantly international.
The cons? The value of a Bitcoin has proven to be very volatile — but again, it’s basically free money, so why not?
Bitcoin and some other cryptocurrencies can be an interesting incentive for customers and I applaud Landry’s for experimenting with this option to give customers more choice in how they put their rewards to use. Of course, cryptocurrencies can just as easily go down as up – and control of this is out of the hands of brands providing such an option, so hopefully customers recognize the risks. The other issue brands need to consider is that once their loyalty incentive has been converted to crypto, they no longer have any influence on the customer’s behavior to redeem the points (value) in a way that improves retention.
Spot on Chuck!
This appears to capitalize more on the buzzy addition of “Bitcoin” to a marketing play, than it is a substantial loyalty game changer. Here’s why – buried in the details of the program is this: “all bitcoin loyalty points may only be redeemed for Landry’s Select Club rewards and will not be transferrable outside of the Landry’s Select Club.”
So the Bitcoin can only be used at Landry’s restaurants. By any other name, this is essentially still a closed door rewards system. But the key difference is that if it is truly pegged to Bitcoin fluctuations, members may see their balances increase (or decrease) over time.
If you were interested in cryptocurrency before, you will probably prefer it to typical points rewards.
Are you kidding?! This is FABULOUS! I would buy shrimp even if I hated it. Here’s why: Bitcoin is mysterious to many, confusing to purchase, and a scary if intriguing investment. Getting Bitcoin as a promotion for eating out? A no-brainer. Plus – don’t forget the bragging rights to owning Bitcoin.
I agree — as something to play around with, but how long does the fun factor last?
The fact that this allows for a living, breathing change in the value of points is very exciting. There’s certainly a subset of the market that will be interested in this, however, brands really have to look at their typical target and assess how large of an opportunity this is. Instead, Dunkin’ does a smart, related twist on this – different items are worth more or less points depending on the day they’re purchased. A flexible points model is the way of the future, whether it’s via Bitcoin or not.
The other day on an oldies station I listened to Spinning Wheel by Blood, Sweat & Tears – “what goes up, must come down.” These lyrics have never been more apt!
What is interesting – even intriguing – gets noticed. I asked several people about this idea – cryptocurrency rewards – and they all agreed it was a fun way to learn about something they don’t know about. And, watching how the rewards account fluctuates could keep customers engaged with the program. Finally, crypto is being used, and it’s just a matter of time before it is common. For now, and for most, it’s a new and exciting (and for many, confusing).
When developing a customer loyalty program design/strategy you always take into account who your customer is and their motivations by segment or tier. You meet your customer where they are – so go there. A big challenge is managing fluctuations in value. For my tastes there is absolutely no way I would give up my what I’ve earned with Landry’s as a Morton’s VIP. I’ll take my points and on-demand redemption all day long without having to ever check my status. Kudos to Landry’s for trial, innovation and indeed building the capability. Let’s see how long this currency options remains in place — prediction: washed out in less than two years.
I think the average consumer is still new to the cryptocurrency world and may not fully understand its virtual value. I do like the innovation; I just think it may be premature to gain significant traction in the short-term.
As cryptocurrency becomes ubiquitous, all merchants will need a cryptocurrency strategy, just like they needed an online strategy at the beginning of the internet era. That’s why every major brand is currently exploring options. Loyalty rewards as crypto are a simple way to engage customers in the new paradigm. The company Bakkt is doing some amazing things in this space. The company’s technology platform allows for dynamic conversion of loyalty points to crypto or cash and vice versa if desired. Any digital asset can be exchanged for another in real time and used to purchase whatever the customer desires, or even transferred to friends or family. It gives customers the power to use their loyalty points as true currency.
As a publicity stunt the value is probably high (at least until too many companies do it and the novelty value wears off).
As a practical means of rewarding loyalty, I put it right up (or is it down?) there with giving lottery tickets; that few retailers offer such tells me it’s not a great idea.
Kudos to Landry’s for adding a clever crypto twist to their loyalty program. If you don’t experiment, how will you know what works when dealing with the newest of the new trends? That said, while there is no doubt a subset of their loyalty program members who will love this option and others who will scratch their heads and wonder why they should care, the question remains whether or not this will create stronger brand loyalty with those members. Once they are engaged in checking the value of their crypto, are they still engaging with Landry’s? It’s not clear, but this should be an interesting learning experience for all loyalty programs to watch.
This is just a customer loyalty program. They could have used chewing gum, gallons of gasoline or Bitcoin as a way to track it, but it is designed to reward the customers who purchase their products and services with a bonus. Nothing more. If fact, if they used gasoline, they would probably get more satisfied customers than Bitcoin (or any other digital currency). It is not Bitcoin that makes the customers loyal, but the high quality of their products and customer service at their restaurants!