Exploring How Blockchain Impacts Loyalty Program Participation Behaviors: An Exploratory Case Study

Abstract

How to keep customers motivated in participative behaviors remains one major challenge in extant loyalty program (LP) studies. While some companies have initiated efforts to utilize blockchain-based distributed ledgers and smart contract capabilities to enhance customer experience and improve LP efficiencies, academic assessment of blockchain application in the LP context remains scarce. This research attempts to establish a theoretical overview of how the key natures of blockchain influence customers’ varying motivations (economy, autonomy, competence and relatedness) and perceived value, which consequently induce participative behaviors in a loyalty points context. Then, using an exploratory case study of Bubichain in China, we verify that the blockchain-enabled loyalty points scheme not only improves customers’ economic perceived value by meeting their economic motives, as the traditional one does, but also enhances their social interaction and psychological self-fulfillment value perception by meeting their intrinsic motivations, thus increasing customers’ experience and participation behaviors.