Unveiling the interplay between blockchain and loyalty program participation: A qualitative approach based on Bubichain

Abstract

Keeping motivated customers partaking in point exchange activities is a major challenge in extant loyalty program (LP) studies. In the literature, IT or its applications play a paramount role in enabling firms to offer superior services and consequently deepen the relationships with their customers. Although already applied to augment customer experience and increase participation in practice, how blockchain applications interact with the LP context is still largely unknown in IS research. The objective of this research is to explore how blockchain, as an IT artifact on the rise, influences value creation in a LP context. Drawing on self-determination theory (SDT), this paper considers both intrinsic and extrinsic motivations in a LP context guided by SDT regulation: meeting the needs of Economy, Autonomy, Competence and Relatedness, and explores the effects of blockchain application on customers’ motivations, which influence value perception and participative behaviors. By using an exploratory case study of BubiChain in China, we collected data through semi-structured interviews and extracted from the raw data of BubiChain-based loyalty point exchange platform, including real-time, multi-brands, peer-to-peer, and secure, traceable and fraud-proof exchange. We found that these features of blockchain applications not only improve customers’ economic perceived value by meeting their extrinsic motivation but also enhance their social interaction and psychological self-fulfillment value perception by satisfying their intrinsic motivations, thus increasing customers’ experience and participative behaviors. We also synthesized the results and theorized the findings into 4 formal testable propositions, which would offer testable hypotheses for future empirical studies. This paper reveals an innovative breakthrough on SDT theory and LP research, and is an early attempt to analyze how the blockchain is applied to LPs. We endeavor to establish a theoretical overview of how the key features of blockchain-driven point exchange platform influence customers’ motivations, which affect value perception and consequently induce participative behaviors in a loyalty point context.