As we move into 2022, we will no doubt see an increasing number of businesses look to exploit the potential that blockchain technology offers and use it to enhance their customer experience (CX).

Blockchain is most commonly associated with cryptocurrency, but in recent months there have been a number of announcements from major companies looking at how blockchain can be used in different areas of the business. The technology offers the ability to share information via a distributed ledger, meaning it’s trusted by members of the network without the need for any middlemen – once information is on there, it cannot be altered or changed.

Blockchain Applications And Implications For CX:

As such, implementing blockchain technology into a company’s processes means the data it uses is more trustworthy. As well as this, because of its decentralized nature, it can enable customers to take control of their own data rather than remain at the mercy of companies that hold their data. For example, Walmart is using blockchain technology in order to improve food tracking and safety by making use of tamper-proof and transparent ledgers so customers can see where their food has come from. This allows people to choose whether or not they want to purchase certain products based on this information – so if you were worried about pesticide residues in your product, you might be concerned to learn that a product was handled by a supplier that experienced a breach in their food safety management system.

This gives more of an incentive for companies to protect customer data and make it transparent – if the data is already on a decentralized network, extensive security measures cannot be taken to keep the information away from prying eyes as this would render the whole concept useless.

It also allows customers to take control of their data and choose if they want certain information shared – for instance, it may be advantageous for some people to share some health data in order to receive tailored medical advice.

Companies can also use blockchain technology to create new types of loyalty programs that give the power back to the customer. With an increasing number of businesses experimenting with cryptocurrency, consumers could soon have a wide range of ways in which they can be rewarded for their spending habits, such as receiving discounts when shopping at different stores or earning coins by taking part in market research surveys or interacting with companies on social media. A company could even reward customers with coins based on how long they’ve been a member of the brand’s community – this would allow customers to accumulate their coins over time, before using them to pay for a product or service once its value had grown. Customers could even potentially exchange these cryptocurrencies with each other or use them in different ways outside of the brand’s ecosystem, depending on how creative companies are willing to get.

Advantages Of Using Blockchain For CX:

Blockchain offers a number of advantages when it comes to customer experience, such as:

• Full Transparency – companies are able to provide more transparency, as it’s easier for them to make their data trustworthy via blockchain technology.

• Stable Security – because of its decentralized nature, companies are better equipped against cyberattacks and there is no one point of failure with blockchain technology.

• Reduced Costs – using a distributed ledger means that the need for intermediaries is reduced or even eliminated altogether, which can potentially save businesses money in terms of transaction fees. This also has an impact on customer service, as staff may be able to deal with issues more quickly without having to wait on hold.

• Greater Convenience – customers have access to their own data so they can control how much information they want to share with brands, thus increasing the convenience of shopping online.

• New Forms Of Incentives – customers are rewarded for interacting with companies, which encourages them to remain loyal to brands that they trust and believe in. It also gives them more of an incentive to share their personal information.

• More Creativity – because blockchain technology enables greater interoperability within ecosystems, companies are able to create more creative products that can be used by multiple different stakeholders. For example, a customer might be able to use coins earned through one company on another brand’s platform or give these coins as gifts to friends or family members.

• Greater Insights – because blockchain allows for a more detailed audit trail, businesses are able to obtain better data about their customers and how they use their products or services.

• Easier Sharing Of information – it’s easier for companies to share information when there is a decentralized network behind them, as blockchain makes it easier to trust the data being shared by different stakeholders.

• Better Customer Service – having access to decentralized and accurate records means that staff can resolve issues quickly and efficiently and customers can go about their day without having to wait on hold for extended periods of time.

• More Personalization – the interoperability of blockchain makes it easier for brands to create products that are able to interconnect with other platforms, resulting in a better customer experience.

• New Business Models  – businesses have access to cheaper transaction fees due to reduced intermediaries, which can enable new types of business models. Reduced costs allow companies to find ways around the “one size fits all” approach and offer more tailored services as a result.

• More Innovation  – companies have the opportunity to create new business models that can unlock new markets. Because of this, they are able to experiment more with different ways of delivering their products and services which help them stay ahead of the competition.

Disadvantages Of Using Blockchain For CX:

On the other hand, there are some potential disadvantages in regard to the customer experience when companies utilize blockchain technology. For example:

• More Complex – the fact that blockchain is a relatively new and ambitious technology means that it can add complexity to businesses and make it harder for them to truly understand how this tech works. Another downside is that there aren’t many experts in this area when compared with something like artificial intelligence (AI) or robotics. This means that most employees won’t have much knowledge about what they’re selling and may not be able to explain anything beyond simple facts and figures.

• Scalability Issues  – just like cryptocurrencies, there is a huge issue with scalability that needs to be addressed. Blockchain is not currently able to handle the number of transactions that companies like Visa and Mastercard can process on a daily basis, therefore making it difficult for them to use this technology as their main service delivery platform.

• High energy Consumption – by operating on a decentralized network, blockchain technology can cause high levels of electricity consumption which has an impact not only on the environment but also cost due to increased expenses. It will take some time before there are any breakthroughs in terms of increasing efficiency or finding alternative sources of energy for this form of tech.

• Lack of Regulation  – because this is still a relatively new area of technology there are no industry tests or guidelines in place to protect consumers when utilizing blockchain’s capabilities. Even though there are some self-regulatory mechanisms currently in place (e.g. KYC), people should still remain wary when making financial decisions due to the uncertainty surrounding where their coins will end up if something happens to them (e.g. if they lose their password).

Industries Set To Benefit From The Blockchain:

There are numerous industries that could potentially benefit from utilizing blockchain technology such as:

Banking, Healthcare, Education, Retail, Real Estate, Entertainment, Gaming, Transportation, Energy, and Manufacturing.

A few businesses that already utilize blockchain technology:

There are a number of companies, both big and small, who have been leveraging blockchain to improve their business offering. These include Microsoft, Samsung, IBM, Maersk, Alibaba, Overstock.com, Walmart, Red Bull Media House.

How can digital service providers leverage blockchain technology to enhance their customer experience?  

Some companies have even gone as far as using Ethereum’s ERC-20 tokens within their platform which allows them to create their own currency. This makes it possible for people to trade supplies, products, and services on one platform and easily exchange currencies with each other without having to go through an exchange.

There are also decentralized hedge funds that use the Ethereum network which gives investors more options in terms of where they put their money.

As you can see, blockchain is a very versatile form of technology and it has the power to make almost anything more efficient, secure, and streamlined. This is why experts believe that when fully implemented across society, it could be the foundation for a new model of economic and social organization.

It is still an emerging technology and it will take some time before we see the full potential of this incredible innovation. However, regardless of if companies use “private chains” or opt to utilize other decentralized peers to peer (P2P) systems like Ripple, it’s clear that this is the direction that companies are heading when it comes to their digital service offerings.

As A Business Process Outsourcing Company, Why Should We Care?

In short, blockchain is something that any kind of business that interacts with consumers should consider implementing into their service delivery model. This includes outsourcing companies who are looking to enhance their customer service experience by making it efficient, trustworthy, and quick.

Most companies will not be able to afford to develop or maintain their own Customer Support, or Back-Office teams which is why outsourcing their needs to a company like ours makes the most sense. We have extensive knowledge of industry standards as well as business process management methodologies that can help your company quickly integrate new forms of technology into your business model.

What are your thoughts on how blockchain can change the customer experience? Do you think that companies will adopt the technology in the near future or is it something that will take some time to develop? Let us know in the comments below.

This article was written collaboratively by Paul Pokotylo and Burak Turk from the Marketing and Business Development teams on behalf of LimTC.

Our mission is to provide you with the information you need on trending topics that we see will have an impact on Customer Experience with a focus on the technology involved. To stay up to date on subjects that interest you, follow us on social media and check out our blog.