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Loyalty programs have a long history, dating back to the 18th century. Curiously, the essence of loyalty programs has not changed much over two centuries: it has always been a tool to encourage customers to come back and buy more. By making a purchase, the buyer received units of something that could be collected and exchanged for values.

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In contrast, the way it is implemented has constantly evolved to be more effective, following the advancement of technology. Only web3 was able to change not only the mechanics of loyalty, but gave rise to a rethinking of what would even improve the loyalty of today's spoiled consumers.

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## Evolution of technology

Let's start with a brief overview of the evolution of the technologies on which loyalty programmes have been built, which I took from [this terrific study](https://loyaltyrewardco.com/the-true-history-of-loyalty-programs/).

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1. 🪙 **Copper, 1790s.**

   The first modern loyalty program, according to a New York Times article, commenced in 1793, when a merchant from New Hampshire began rewarding customers with **‘*copper tokens’***. The idea was quickly replicated by other retailers. Unfortunately, the Coinage Act of 1864 made the minting and usage of non-government issued coins illegal, ending this era.

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2. 🏷 **Paper, 1850s.**

   To boost repeat sales, in the 1850s, soap seller from New York invited customers to cut-out and collect the **‘*trade marks*’** from product packaging. Another example of that period is The United Cigars Store Co. which pioneered a coalition of partners by striking deals with several companies, all of which placed United coupons in their product packaging.
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   In the 1890s, the most popular mechanics of the period emerged. Companies started using physical ***'stamps'***, which customers stick into collecting books. These books could then be exchanged for a wide range of rewards. By 1914 around 7% of retail trade involved the awarding of stamps.

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4. 💳 **Plastic, 1980s.**

   In 1981, American Airlines launched the world's first frequent flyer program, using a new currency (***'miles’***) that matched the number of miles flown by the member.

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   With the rapid expansion of the frequent flyer and hotel plastic **'*membership cards’***, banks and retailers soon replicated their approach. Points and miles loyalty programs quickly became the dominant loyalty program currency globally, ending the ninety-year reign of stamps.

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5. 🌐 **Web, 1990s.**

   Increasing competition, combined with the birth of the digital age, led to a loyalty program innovation boom from the 1990s onwards. The user of the program simply had to know their ‘digital id’. This allowed businesses to offer more sophisticated loyalty programs that provided customers with more convenient ways to track and redeem rewards.

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6. 👾 **Non-Fungible Token (NFT), 2010s.**

   The emergence of a ***‘unique numerical identifier’*** that cannot be copied, replaced, stoled or split has changed the approach to building customer loyalty through rewards. This technology makes it possible to create unique and personalised high value trophies, as well as changing the rules of the game.

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## What makes NFT a game changer?

Using NFTs in loyalty programs can offer various advantages.

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* One such benefit is their ability to **authenticate digital assets and confirm their origin**. This becomes especially valuable in loyalty programs where rewards consist of exclusive content or digital collectibles.

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* NFTs also represent **ownership of digital assets**, which can be extremely important in loyalty programs that feature rare or limited availability rewards.

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* In addition, NFTs ensuring a **transparent** and immutable record of their transfer. This allows customers to track how their rewards were earned and redeemed.

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* Finally, NFTs are highly **flexible** and can be tailored to meet the specific needs of a loyalty program. Businesses can create unique and valuable rewards that cater to their customers' preferences.

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## Examples to inspire you

Below are some instances of NFT loyalty programs that employ inventive and imaginative strategies to incentivise and retain their clientele.

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* [Reddit](https://nft.reddit.com/#how-to-use) introduced a program that allows users to become proud owners of exclusive NFT-based avatar built on the Ethereum blockchain. You can sell or trade your Reddit NFTs with other collectors. Reddit’s avatars are also used as profile pictures, giving the images a glow-like effect when they comment in forums.

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 ![](https://cdn.hackernoon.com/images/t5rgsiQ1e4Mzid38fkrK3Z5PK7e2-8fe3pln.jpeg)

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* [NBA Top Shot](https://nbatopshot.com/) enables fans to collect and trade digital collectibles featuring NBA players and moments. The program is built on the Flow blockchain and uses NFTs to represent ownership of the collectibles. Fans can earn NFTs by participating in the program, and can use them to access exclusive content and experiences.

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   ![](https://cdn.hackernoon.com/images/t5rgsiQ1e4Mzid38fkrK3Z5PK7e2-haa3pv5.jpeg)

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* [Starbucks Odyssey program](https://waitlist.starbucks.com/#/learnmore). The popular coffee chain launched the beta version of the web3 reward program to a small group of waitlist members, allowing them to engage in interactive "Journeys" that earn "Journey Stamps" in the form of Polygon-based NFTs. In addition, users also get "Odyssey Points" that will open access to new benefits and experiences in the future, including virtual espresso martini-making classes, exclusive events and trips to Starbucks coffee farms.

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   ![](https://cdn.hackernoon.com/images/t5rgsiQ1e4Mzid38fkrK3Z5PK7e2-nvb3pzh.jpeg)

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* [Clinique](https://www.clinique.com/nft) holds a competition for members of the Smart Rewards program. Three winners are awarded three unique pieces of the brand’s story, in an NFT that captures the spirit of their most iconic products.

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   ![](https://cdn.hackernoon.com/images/t5rgsiQ1e4Mzid38fkrK3Z5PK7e2-p9c3po6.jpeg)

  Maintaining customer loyalty in a digital world is becoming increasingly difficult. By using NFTs as rewards, businesses can create unique and valuable experiences for their customers.

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:::tip
The robustness of NFT technology makes it possible not only to increase the value of rewards for loyal users, but also to possibly make them 'shareholders' of the business. What could make them more loyal and engaged than this? All you have to do is link the value of the rewards to the company's value on the stock exchange - and voila!

:::

What do you think of such an idea? Feel free to comment with your thoughts on the subject

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