From ambivalence to trust: Using blockchain in customer loyalty programs

Abstract

Global initiatives on climate protection and national sustainability policies are accelerating the replacement of fossil fuels with renewable energy sources. Many electricity suppliers are engaged in efforts to monetize this transition with ‘green’ services and products, such as Green Electricity Tariffs. These promise customers that their supply includes a specific share of green electricity, yet since electricity suppliers often fail to deliver on those promises, many customers have lost trust in their suppliers. Further information asymmetries may not only exacerbate this loss of trust, but also spark distrust and lead to an overall feeling of ambivalence. Eventually, ambivalent customers may feel inclined to switch suppliers. To prevent this domino effect, electricity suppliers must eliminate ambivalence by increasing customer trust and reducing customer distrust. Here, we discuss how these challenges can be met with a customer loyalty program built on blockchain technology. We developed the program following a Design Science Research approach that facilitated refinement in four iteration and evaluation cycles. Our results indicate that the developed customer loyalty program restores trust, reduces distrust, and resolves customer ambivalence by providing four features: improved customer agency, sufficient and verifiable information, appropriate levels of usability, and unobstructed data access.