Most of us belong to at least 4-5 different loyalty programs – but likely even more.
Personally, I get quite excited when receiving an email which tells me of an upcoming improvement and, being a member of well over 100 loyalty programs, I’ve seen some pretty decent improvements and new features being announced in 2018.
Oporto introduced a tiered program structure, which featured higher earn rates dependant on tier status, just like Qantas Frequent Flyer. As an existing Flame Rewards member, I got emailed about automatically being enrolled into Gold, the second highest. However, as a nice surprise and delight play, it turned out that they actually made me Platinum, where I could enjoy the highest earn rate and other associated benefits.
Hilton Honours recently introduced an awesome points pooling feature for up to 11 people, allowing members to pool their points into a single account and use as they see fit. This is an improvement because program operators typically don’t mind seeing points expire as that is a boost to the bottom line. This way, the member gets another opportunity to extract value.
Uber has also recently launched its loyalty program in the US, called Uber Rewards. Whilst this isn’t technically an improvement (more of a feature), what they’ve done is promised to move existing Uber users into a tier based on the last 6 months of retrospective transactions, instead of starting from start at program launch. This immediately sets the scene for deeper engagement from customers who are already heavy users.
And now…. Let’s take a look at the winner of the worst improvement – Razer. The program is currently structured in the following way:
- Members purchase Razer Gold ($1 = 1 Gold), which then allows them to buy games and merchandise at better prices. Effectively, it’s Razer’s payment type.
- Once spent, members earn Razer Silver, which is the loyalty program currency. The more Razer Gold spent, the more Razer Silver is earned, which can then be redeemed for games, vouchers, limited edition merchandise and more.
The “improvement” they’ve introduced is called Razer SoftMiner and is another opportunity to earn Razer Silver, promising that members could earn “500 or more Razer Silver per day”. So, what do members actually have to do?
Put simply, they have to set-up their computer to mine cryptocurrency via this application. For those not familiar with cryptocurrency mining, it’s a process where the computer has to solve extremely complex mathematical equations to then earn a share of whichever cryptocurrency is being mined. This process uses a ton of electricity and CPU power because of the level of complexity.
So, does the member get to keep the mined cryptocurrency? No, because Razer then takes the mined cryptocurrency and gives the member Razer Silver in return.
One of the available redemption options, Tomb Raider, is available on Razer‘s reward portal for 98,000 Razer Silver. Assuming a rate of earn of 500 Razer Silver a day, it would take me 196 days to save up for a game that costs around US$50. Considering that electricity usage over the same period would run me potentially thousands of dollars into the red (plus I’d lose out on selling the mined cryptocurrency), I would suggest that someone at Razer has chronically underestimated that all important value equation. Gamers are a savvy bunch and I simply can’t imagine this getting any reasonable traction.
Max Savransky is Loyalty Director of Loyalty & Reward Co, a leading loyalty consulting firm based in Sydney. He has 10 years’ experience within the loyalty industry including roles at Mastercard Loyalty (Pinpoint), Silverneedle (Next & Sage Hotels) and Pureprofile. As Loyalty & CRM Manager at HOYTS, he launched the highly successful partnership with Qantas Frequent Flyer, including a world-first Qantas Points in-store redemption proposition. He is an active cryptocurrency trader.
Max regularly contributes to www.blockchainloyalty.io, a global resource centre for everything blockchain loyalty.