# On being lost: Loyalty Points and Social Tokens

On being lost: Loyalty Points and Social Tokens

In the world of business and marketing, loyalty programs have become a popular tool for brands to engender loyalty among their customers. These programs, often in the form of loyalty points, aim to create a sense of value and reward for customers who continue to choose a particular brand. This concept of rewarding usage is rooted in the idea that money is what people say is valuable, and loyalty programs serve as a manifestation of this belief.

However, there is a growing trend towards the use of social tokens as a form of loyalty currency. Social tokens, a concept introduced by Swartz, are corporate currencies that brands like Starbucks have begun to implement. The idea behind social tokens is to create transactional communities, networks of shared trust within the communities themselves. In this sense, social tokens serve not only as a financial incentive but also as a social incentive, fostering a sense of community and belonging among users.

But what does this mean for businesses and their loyalty programs? Well, it suggests that there may be a shift towards more complex and immersive loyalty schemes. Rather than simply collecting points, users may be more engaged and motivated to participate in a scheme that offers a game-like experience. This aligns with the idea that collecting points is play, and by making loyalty schemes more complex, businesses can tap into this natural human inclination towards play and competition.

In designing transactional communities of social tokens users, it's important to consider the balance between financial incentives and social incentives. While financial rewards may be the initial draw for users, it's the sense of community and belonging that keeps them engaged and loyal. This means that businesses should strive to create a holistic experience that combines both financial and social rewards.

So, what actionable advice can businesses take away from this discussion? Here are three key takeaways:

1. Embrace complexity: Consider making your loyalty program more immersive and game-like. By adding layers of complexity, you can tap into the natural playfulness of users and create a more engaging experience.

2. Foster community: Don't just focus on financial incentives. Instead, create a sense of community and belonging among your users. Encourage interaction and communication within your loyalty program to foster a strong sense of community.

3. Balance financial and social rewards: While financial incentives may initially attract users, it's the social rewards that keep them engaged. Find ways to strike a balance between financial and social rewards to create a holistic experience for your users.

In conclusion, loyalty points and social tokens represent a shift towards more immersive and community-driven loyalty programs. By embracing complexity, fostering community, and balancing financial and social rewards, businesses can create loyalty programs that not only reward usage but also foster a sense of belonging and community among their users. So, if you're looking to revamp your loyalty program, consider the power of social tokens and the potential they hold for creating transactional communities.