Loyalty Programs

How to Choose a Web3 Loyalty Program for SaaS Companies

Post by
Brian BloomKing
How to Choose a Web3 Loyalty Program for SaaS Companies

With a recession looming it may be harder to get new customers for revenue generation. The next best strategy for growth during a downturn is to retain more of your existing customers (lower churn), generate more referrals, and increase your expansion revenue. A web3 loyalty program is a quick and relatively inexpensive way to achieve all three of these recession proof goals.

However, applying Web3 principles for customer loyalty is very new to most companies (even though BitCoin has been around for over 12 years).  And loyalty programs themselves are rare for SaaS companies.  If you've been thinking about this type of program (or we convince you;-), then selecting a loyalty company, presents a lot of options to choose from and a lot to think about. 

So, how do you decide which one is right for your business? In the consumer world, customers have come to expect rewards for their loyalty. They want to be rewarded for their business, they want to be rewarded quickly, and they want the rewards to have real value. That's why 1) You need to consider adding a loyalty program to your marketing mix and 2) Why choosing the right Web3 loyalty program for your SaaS company is important. 

In this article, we will discuss the factors you need to consider when deciding. We will also provide tips on getting the most out of your Web3 loyalty program.

What are Web3 Loyalty Programs For SaaS Companies and How Do They Work?

Web3 customer loyalty programs are a new way to reward software product users for their usage and loyalty. Unlike traditional programs that rely on points or coupons, web3 programs use blockchain technology and tokens to track consumer activity and offer rewards in the form of digital tokens or coins. Ideally, these tokens increase in value over time, and can be exchanged for other tokens, used to redeem rewards, or sold on crypto exchange markets such as Uniswap or Pancake Swap. Through smart contracts, SaaS companies can even take a percentage of the revenue generated by the sale of one of their loyalty tokens, which is a new revenue source.

Essentially, tokens allow companies to implement an open, exchangeable token as a reward. This is in contrast to traditional loyalty programs where the value of rewards are locked up on the brand's platform and cannot be owned or sold. This aspect of tokens will incentivize your users to generate more tokens and increase the value of the tokens they hold. This in turn will increase revenue and valuation.

Tokens can also be tied to specific, high revenue, high retention product usage use cases via smart contracts, and product APIs, making loyalty tokens not just rewarding for members, but also able to enforce virtuous product lifecycle loops that increase your market share and valuation, while reducing churn and increasing retention. As web3 technology continues to develop, we expect token-based loyalty programs to become an increasingly popular way for SaaS businesses to engage with their customers and prospects.

New Frontier:  Tying Product Usage to Tokens Via APIs And Smart Contracts.

Smart contracts are the ‘brains’ of blockchain.  Smart contracts are software programs stored on top of a blockchain that automatically trigger rules when predetermined conditions are met.  For example, you may discover that customers who upload their email contacts to your app churn less.  So you can tie the action of uploading contacts, via an API call, to a smart contract that automatically grants a token to the customer’s loyalty account or wallet when they use a virtuous product feature.  It’s simple code to implement but has powerful consequences for reducing churn and increasing retention.

Types of Web3 Loyalty Programs

Loyalty programs are a great way for businesses to reward their best customers. There are various types; the best type for a business will depend on its specific needs and goals.

Points-based programs: In a points-based program, customers earn points, which can be utility tokens or coins, for every positive action they take. These tokens can unlock rewards such as discounts, upgrades, community access, live event access, exclusive content, or cash (via a token swap).

Tier-based programs: Customers are divided into tiers based on their activity and purchases. The higher the tier, the more benefits and rewards customers receive. This type of program encourages customers to keep engaging in revenue producing behavior to reach the highest tier.

Subscription-based programs: In a subscription-based program, customers could buy tokens with a bundle of benefits such as product usage, exclusive upgrades (for taking certain actions), or free access to exclusive content. This type of program is often used by Internet platforms such as e-commerce stores or streaming services.

How to Choose the Right Company for Your Needs?

Choosing the right Web3 development company for your needs is an important decision. Today, there are no ‘out of the box’, no-code solutions for B2B loyalty programs.  And this is a good thing. 

What constitutes loyalty for your app is very different from another company in another industry.  There are many factors to consider, such as loyalty program rules, nft utility, blockchain integration, and program integrity (blocking scammers and spammers). 

This probably means you’ll need a custom solution from a company that has pre-built modules that they can modify for your use cases.

Here are some tips to help you choose the right company for your Web3 needs:

First, consider your loyalty program requirements.  You’ll want someone with experience with a Web3 technology stack that easily integrates with your product via simple API calls and syncs those calls with your smart contract so that you can manage product-usage based rewards.  Choose a company that specializes in this technology and understands it.

Second, Talk to them about some ideas for how a rewards program could apply to your specific offering. Some programs are generic and apply to consumer applications.  As a SaaS company, you’re going to want something unique for you, your customers and your industry.

Third, Ask to speak to other companies who have implemented your proposed vendors rewards programs.  It not only helps vet our potential loyalty program partner, but you can learn early on what to do and not to do by speaking with someone who has been there.

By following these tips, you can be sure to choose the right Web3 development company for your specific needs.

What are the Benefits of a Loyalty Company for SaaS Businesses?

There are many benefits of using a loyalty company for SaaS businesses. Loyalty programs can help you immediate connections with customers, improve customer retention (reduce churn), increase expansion revenue, and generate new leads. In addition, loyalty companies can provide valuable first-party data insights into your customers' behavior and preferences.

  • Customer retention: Retain your best customers by incentivizing them to stay with your business. And by the inverse, reduce churn.
  • Increased spend: These programs encourage and engage customers to upgrade, try new features and new products, collectively know as revenue expansion.  This is your easiest, highest margin revenue and you want to encourage this whenever you can.
  • Generate new leads: Attract new customers by offering rewards for referrals and for leaving reviews in top industry review sites (think G2, Trust Pilot, etc.)
  • Customer insights: This can provide valuable insights into your customers' behavior and preferences. This information can be used to improve your marketing and sales strategies.
  • Tokens for the buying journey: You can also issue tokens for prospects who engage in positive buying behaviors like downloading a white paper, or watching a product demo. Prospects who own tokens are more likely to convert to customers in order to keep their tokens and add to their value.

Overall, the right loyalty company can help you boost your business in recession-proof ways. Choose a reputable and reliable provider if you're considering using a loyalty program for your SaaS business. 

Will Web3 Brand Loyalty Program Become The Norm For Customer Loyalty (as several recent articles indicate)?

A core psychological underpinning of tokens is that holders will put in effort to avoid the price of the token they are holding to drop (called ‘loss aversion’ in psychology).  Once companies begin to understand this and see it action, Web3 loyalty programs will replace traditional points across all loyalty programs. So yes, we’re bullish on adoption.  The upfront cost to implement a web3 loyalty program is same as a traditional loyalty program.  But the payouts on the backend for the members are potentially much larger.  

Web3 technology is revolutionizing the way we think about loyalty and reward programs. In the past, these programs were centralized and often depended on points that could be easily lost, or forgotten due to indifference. With Web3, these programs can now be built on the blockchain, using tokens to represent value that can't be lost or stolen and that, ideally, increases in value as the value of your company increases.

This new paradigm shift is already being seen in the world of crypto reward programs, where blockchain-based loyalty tokens are becoming more popular in the gaming world.  And notably Starbucks Rewards members will be offered Starbucks odyssey that will offer tokens instead of points as an option in their loyalty program.  

As more businesses begin to explore the possibilities of Web3, we can expect to see a wide variety of innovative, new reward programs emerging.  Chances are you can be the first in your industry to implement one.

How Tokens Fit Into Loyalty Programs

A token is like a digital currency that cannot be replicated, replaced, or divided. Instead, it is recorded on a blockchain and verifies ownership and authenticity.  Like a security, its value can increase over time.  Unlike traditional points in a consumer loyalty program, tokens are not proprietary. If you leave the program you still keep your tokens. This can make tokens very appealing to loyalty program members, and incentivize them to get more tokens.

Even though web-based B2B loyalty programs are still progressing, they offer innovative marketers with an amazing opportunity to foster stronger connections with their customers. The right provider will let you construct a program that not only helps you comprehend your users more but also provides them with valuable payouts if they stick with your program. 

Through APIs and Smart Contracts, you're only limited by your creativity as to what you can tokenize for rewarding user behavior. For example, you can determine the ideal combination of features (aka, a playbook), and offer tokens when users run these playbooks. Or for marketing, you can offer tokens to prospects BEFORE they become customers, like when they download a white paper, or watch a demo. Thank about that. A prospect who already owns some of your tokens, is more likely to become a customer so they can try and earn more.


If you want to do something unique and impactful in your industry, a web3 loyalty program would certainly stand out.  So, how do you choose the right loyalty program for your business? Ask yourself a few questions. How do loyalty programs work, and What are your own goals for the loyalty program? What features are important to you and your clients?  What actions can my customers take when using the produce that drive revenue?  How do I reward those actions?

Once you know what you're looking for, it's time to start evaluating programs. Do some research on different providers and read reviews from other businesses. Then, narrow down your options until you find the perfect one for your company. And remember, even if a provider doesn't offer the smart contracts technology you need, it may be worth considering them if they have a great reputation and can provide most of what you need. Thanks for reading. We hope this guide helped make your decision easier.