The role of Cryptocurrency in shaping customer loyalty

Abstract: An emerging body of research has focused on cryptocurrencies and loyalty programs; nevertheless, there is still a significant knowledge void and potential for more investigation into this field and the relation between them. Research has given a limited amount of attention to the role that cryptocurrencies play, even though cryptocurrencies have the potential to radically alter the nature of value perception, which is an essential component of the design of any loyalty program. As a primary research gap, we argue that limited attention has been paid to how incorporating cryptocurrencies, as the reward of a loyalty program, can influence the effectiveness of that program, which is translated as customer loyalty. This thesis pays attention to this issue and fills this research gap. We intend to have a more in-depth look to understand the role that cryptocurrencies play in loyalty programs as there is limited research on these two topics together, even though cryptos and loyalty programs have a combined monetary value of billions of dollars. The purpose of this thesis is to get a better understanding of the ways in which cryptocurrency, as a forward-thinking component of a reward program's innovative design, might affect consumer loyalty. The study focuses on three primary questions. The first is related to the impact that cryptocurrencies have on people's conceptions of loyalty in the context of loyalty reward programs. The second one focuses on the role of emotions and cognitions of the types of rewards and how the customer molds their loyalty to a particular reward program. The third question centers on the potential implications and impacts that come along with implementing cryptocurrency as a design element in a reward program.To address our research questions, a mix-method study and analysis were conducted. First, we conducted quantitative research on why people (users of loyalty programs) are interested in reward programs and examined how their cognitions and emotions associated with cryptocurrencies influence attitudinal and behavioral loyalty. To accomplish this, we administered a survey to 162 respondents, analyzing various variables, including perceived value, status dependence, and skepticism in the perception of loyalty. Second, we also conducted 7 semi-structured interviews with people who have worked in the loyalty reward industry (employees of firms offering a reward program), which was helpful for taking into consideration the company’s point of view too regarding the role of cryptocurrencies in influencing customer loyalty (adding to the insights derived from the quantitative part of the study regarding the user point of view).Our study contributes to the body of literature on loyalty programs (Kim et al., 2021), which are now being deployed and examined at a pace that is unprecedented, since loyalty programs are excellent tools for relationship marketing. However, attempts in the real world often fail, or at the very least do not live up to expectations, which highlights the need for a closer look at the design of loyalty programs that can boost their effectiveness. We build on prior research that suggests paying attention to the design, psychological, and operational elements which can play a role in influencing customer loyalty and particularly, we focus on cryptocurrencies as a design element that can trigger different emotions and cognitions, which are critical for attitudinal and behavioral loyalty.