Executive Profile: Loyalty expert Philip Shelper on blockchain marketing

9th August, 2019

How is blockchain technology coming along? If on one hand there is scepticism around the utility, on the other as the likes of Facebook and Rakuten take a plunge in this arena, the potential can’t be ignored. Intriguing situation to say the least.  


Blockchain technology isn’t having an easy time and doubts have been raised over its utility in the arena of loyalty. For instance, blockchain enabling an exchangeable currency within different loyalty programs isn’t a proposition that excites loyalty specialists. Another vital question that has been raised is around the exclusivity of blockchain. Is it the only technology that can, for example, interchange a loyalty currency into cryptocurrency?   

Still the technology promises to contribute in several aspects – curtailing system management costs with smart contracts (minimize systemic errors and fraud to ensure secure and transparent transactions); processing a transaction in real-time; paving way for a secure environment etc. Also, developments pertaining to Facebook’s new cryptocurrency, Rakuten’s foray into blockchain etc., too, have emerged this year.  

Ai’s Ritesh Gupta caught up with Sydney, Australia-based Philip Shelper is CEO of Loyalty & Reward Co, a loyalty management consulting agency, and spoke about various topics, including blockchain marketing. Shelper, who is also one of the course leaders of the recently launched The Australian Loyalty Association’s Customer Engagement and Loyalty Course, believes that Facebook will launch Libra and create the biggest loyalty program the world has ever seen, threatening the dominance of banks and even some governments.


Ai: As a traveller, how do you assess the scope for improvement in loyalty programs or FFPs being run by airlines?

Philip Shelper: I’m currently a Gold member with Qantas Frequent Flyer, and I have to say the experience is pretty good. I enjoy the lounge access and priority boarding, it’s easier to redeem points on flights, I earn bonus points and I can access a better level of customer service. The odd complimentary upgrade would definitely be a bonus.

Ai: How can blockchain technology play its part in fostering loyalty – can you cite real use cases?

Philip Shelper: All the big advancements in blockchain loyalty are happening in the back-end with enterprise grade implementation. Loyyal is leading in this area. They’re working with major airlines and other multi-national companies with their customised Hyperledger solution to solve some real-world problems. This includes real-time points earn, auto-reconciliation, instant settlements, single view of customer, easier onboarding of earn and redemption partners, and more. They are making strong inroads in the US, Canada, the Middle East and Asia Pacific.

Ai:  How do you think rewarding members with cryptocurrency or cryptotokens can play its part?

Philip Shelper: When I was first exposed to the concept of a cryptocurrency-powered loyalty program several years ago, I was really excited. I loved the idea of earning a loyalty currency which could fluctuate in value, and saw it as something which would really revolutionise the loyalty industry.

A number of start-ups were raising large sums via Initial Coin Offerings (ICO) and it felt like we were on the cusp of a brave new world. This all came unstuck with the crypto bear market which struck in early 2018. Many of the loyalty start-ups saw their currency valuations plummet by 99% which completely killed their member engagement. A few of those early started, such as Incent and LoyalCoin, continue to push forward with new innovations and global expansion, but time will tell if the model is feasible.

At the other end of town are companies such as LINE, Facebook and now Walmart. These companies are looking to introduce their own cryptocurrencies. This will enable cryptocurrency loyalty programs at a scale not ever seen. They will truly revolutionise the loyalty industry. It’s a very exciting space to watch. Imagine 2.4 billion Facebook members earning Libra for sharing, watching advertising, buying products through Facebook marketplace and spending with a Facebook digital credit card.

Ai: Do you think blockchain is being rightly ignored?

Philip Shelper: There was a lot of hype a few years ago as a result of entrepreneurs seeing an opportunity to earn large sums of money via ICO. Within loyalty, lots of ideas were thrown around, including the claim that loyalty was broken and blockchain could fix it by enabling interchangeability from lots of different loyalty accounts. Investors who didn’t understand the loyalty market were enticed by this and poured in tens of millions of dollars. Unfortunately, there wasn’t the realisation that most loyalty program operators don’t support the idea of their loyalty currency being transferred outside their program, as it represents a cost to them.

Thus, the hype totally overpromised. In addition, since the same solution can be delivered without blockchain, although the promise of blockchain is a system doesn’t require a central administrator to facilitate the transfers, making it potentially more cost-effective and trustworthy.

Ai: Can you talk about blockchain marketing? What does it mean?

Philip Shelper: The core principle of blockchain marketing is providing members with full security and control over their data. Companies such as Bron.tech encourage members to input personal data into a secure blockchain data wallet. Research companies can then reward the member for providing them with access to the data in the wallet. This is quite a different model to most loyalty programs where the members data is collected and then monetised by the program without the member having control over the data or being compensated when the program earns revenue from using it.

This approach is still very new and as a business model it is yet to be proven, although events like the Facebook Cambridge Analytica scandal certainly help its cause.

Ai: Where do you see the future of blockchain technology in loyalty?

Philip Shelper: Companies such as Loyyal will eventually scale globally. They will be connected to many major loyalty management systems and thousand of earn and redemption partners, creating an Internet of loyalty which will allow easy connectivity between businesses keen to participate in a global loyalty ecosystem.

Facebook will launch Libra and create the biggest loyalty program the world has ever seen, threatening the dominance of banks and even some governments. Walmart, Apple, Amazon, Rakuten, Google and other tech giants will have no option but to follow. The end result with be a new global financial paradigm, the outcome of which is difficult to predict, but will include loyalty program elements within the frameworks. We certainly live in interesting times.


Hear from senior executives about the blockchain technology at the 8th Annual ATPS Asia-Pacific to be held in Penang, Malaysia (27-29 August, 2019).