TicketManager | Connecting Loyalty Programs Across a Team’s Sponsorship Portfolio

Many sports teams and consumer brands run loyalty programs, but only recently have properties and sponsors started to integrate them as part of a sponsorship activation.

One difficulty was the “conversion factor” between two points systems. What’s the airline mile equivalent of engaging with five social clips per week via the team app? If a $5 drink gets you 5 loyalty points at a coffee chain, should a $90 jersey at the team store get you 90 loyalty points to put towards your next latte as part of a team-cafe partnership?

Another challenge was the technical aspect of linking the two programs for those users enrolled in both, and then managing the stream of points earned and redeemed in both directions.

Could bitcoin be the medium of exchange for loyalty programs?

The Houston Rockets announced a partnership in mid-November that takes a step towards using bitcoin as the “reserve currency” of rewards programs.

NYDIG is a bitcoin brokerage and product developer. They promote bitcoin-based loyalty programs as one of their core offerings, and the Rockets will use NYDIG’s platform to “provide creative rewards and payment options to our fanbase and associates.” Putting their crypto where their marketing is, NYDIG will pay the entire sponsorship fee in bitcoin.

One week earlier, NYDIG and Landry’s – Rockets’ owner Tilman Fertitta’s hospitality company – announced a bitcoin-backed option for members of Landry’s Select Club, the company’s loyalty program. Members who take the bitcoin option will still earn and redeem points in cash, but the value of their points balance will be based on the market price of bitcoin at the time of redemption. The rewards points will not be denominated or redeemable in bitcoin, but this is a significant step towards the convergence of loyalty programs and cryptocurrencies.

The Rockets and Landry’s offer NYDIG two distinct but related opportunities to experiment with bitcoin-based rewards programs and observe customer adoption of both the bitcoin-backed loyalty programs and bitcoin as a form of payment. If they see that a significant number of customers are using bitcoin at both Rockets games and Landry’s restaurants, they will have valuable data linking customer behavior between the two brands via bitcoin. They will also obtain insights into the relationship between customer spend, bitcoin value and rewards point redemption to determine the viability of a rewards program built “natively” on cryptocurrency or the blockchain.

Ultimately, a partnership like this could evolve into connecting rewards points from two separate programs by assessing the value of each program in terms of bitcoin. This could make bitcoin the conversion factor or even the medium of exchange between two or more rewards points systems.

Money spent on one is a reward point for all

Taking a more conventional approach – at least in terms of denomination – is Arsenal Football Club. Ahead of the Premier League season’s kick-off in August they announced a new reward program that would let fans earn points for their day-to-day interactions with the club and then redeem those points for rewards, products or experiences. This is a step up from the two standard paths of awarding points for interacting with the team via social media or the app, but not offering any real value upon redemption; or basing the points system on ticket or merchandise purchases, and then offering rewards on future purchases.

Members of My Arsenal Rewards will earn points both at the stadium and with selected partners. Club sponsors adidas and Cadbury were involved with the program when it launched, with Lavazza, wine producer Santa Rita and a local brewery exploring their options.

One limitation of both programs is that they are heavily weighted towards in-person consumers. Arsenal, more than the Rockets, relies on a global fanbase. But for any team, the vast majority of fans on any given night – indeed, over the entire season – will not be at the stadium. Rewards programs that allow fans to earn and redeem points consistent with their passion (and perhaps their status on rewards points leaderboards, online fan forums and social media), regardless of location, are a necessary next step for sports teams and brands.

Fans can express their commitment and spend their money in many more ways than those connected to the game day stadium experience. They can have regular, in-person, commercial transactions with their favorite team’s sponsors, from food & beverage to apps to consumer products. They also give lots of time, attention and data to the team and its sponsors via digital interactions. Rewarding those interactions via micropayments will be an expectation as blockchain-based products (also known as “Web 3.0”) become standard.

The more teams and sponsors can connect and leverage all those interactions for mutual gain, the closer the fans will be to each and the more valuable the sponsorship.