Why do we need *tokenized* loyalty programs if we have perfectly well-functioning regular loyalty programs?

Let me explain the benefits of tokenizing using one of the most popular loyalty programs in the US: Starbucks Rewards 🧵

First, let’s talk similarities. In both cases:
• Fans can earn points/tokens for purchases/activities (UGC, surveys) and redeem for branded rewards (Sbux stars ➡️ free bevs/food/merch)
• Brands can use diff loyalty tiers to offer exclusive access (Sbux Gold ➡️ addtl gifts)

So why tokenize?
1. Governance: brand tokens allow customers to vote on company direction (new SKUs, perks etc)

Yes, Sbux could do polls today w/ 1 customer = 1 vote structure; tokenization allows for voting proportional to strength of fandom (more tokens = more votes)

(This is not any different from sports fan tokens by the way - check out the thread below to learn more 👀)

2. Ownership: why limit customers to in-kind exchanges only? If I earned my Sbux stars, I should be able to sell them. If I have 400 Sbux tokens & you have 250 (and need 300 to qualify for Gold, or just want more “voting power”), I can sell you extras at market rate - win-win!

3. Value appreciation: aka the most powerful reason for tokenization – points as shadow equity

Imagine earning Sbux tokens as an early customer & seeing their value appreciate as brand expands (or getting actual equity allocation pre-IPO due to high token ownership! 🤯)

Those are all customer benefits, so why should brands care about tokenization?

More governance, more ownership, and more value appreciation all shift customer mindset: from a regular rewarded/appreciated customer to an aligned shareholder.

Getting rewarded in company upside & having meaningful voice in its direction vs. receiving free products/discounts just hits different, and elicits more impactful customer behavior.

“Shareholder mentality” enabled by tokenization can be esp powerful for young (private!) brands; when your best customers behave as owners, they are retained longer, they spend more, and they become your best marketing, spreading brand awareness & affinity to friends, online etc.