What is the impact of blockchain on CX? How can blockchains and CX work together to make a better experience for the customers? This article will explain what cryptocurrency, blockchains, NFTs are, and how they can impact the CX industry. So, take our digital hand as we walk through it together.
What is blockchain?
New technology can add a lot of improvement to the world of CX. However, you would have to know and understand the different terms so that you can use them to the best of their advantage. Before we dive deeper into the impact of blockchain on the CX industry, we have to go a few steps back and cover some essential concepts such as cryptocurrency.
Cryptocurrency, or crypto for short, is similar to blockchains, in that the two are strongly intertwined. The best way to describe Crypto is looking at it as a digital currency. As in you can use it to buy/ exchange/ trade services and goods online. However, people usually use it as an investment such as Bitcoin.
However, there is no third-party authority overseeing the transaction. It is purely peer-to-peer. Meaning the “middleman” is totally cut out of the interaction. It is the technology for people not versus people.
Going deeper into blockchain
Blockchain is often described as being record-keepers. Blockchain technology is not just one source but instead are shared over thousands of secure systems. Therefore, if a change is made to the transaction, it would have to go through all the systems within the network. It is blocks connected together, hence the name.
Furthermore, it uses an online ledger that has strong cryptography to make online transactions secure. Cryptography is constructing and analysing as well as constructing protocols that prevent third parties or even the public from reading private messages, in this case, interactions.
Plus, it is also close to impossible to tamper with due to the multiple systems as well as the decentralization of servers. Therefore, cryptocurrency and blockchains can be viewed as being one and the same.
What is an NFT?
NFTs means Non-Fungible Tokens. To put it simply this is a digital collectable where no two are the same. Unlike Bitcoin where they are all the same. NFTs are stored using blockchains making it close to impossible to alter the tokens in any way.
What is more, is that these can be sold from one person to another. The price is decided according to the value of the NFT. One of the most expensive ones as well as the first is “Quantum” by Kevin McCoy which sold for 1.4 million in June 2021.
And all the transactions regarding NFTs happen without the need for an authorized third-party overlooking. Tons of content creators are jumping on this bandwagon as a way to sell or trade NFTs such as YouTubers like Psychicpebble. Although only when the trend first started. Plus, NFTs are not limited to visual art, but music too.
NFTs are the digital, modern equality of art where there is only one Mona Lisa that everyone wants. But then the question arises: how does blockchain benefit customer experience? And how can NFTs do the same?
Understanding the impact of blockchain on CX
Blockchain tech has the ability to improve CX in leaps and bounds if you understand how. As well as explain it to your customers, so they do not get turned off by this new technology. There are several great qualities in using blockchain in your CX business model, and we will go into them.
1. Payments and goods
Using blockchain technology can make financially clearing as well as identity checking time much lower. This makes the transaction smoother and faster. Compared to a bank or international payment, where a transaction can last for days. With blockchain, mere minutes. This will certainly help with CX.
Furthermore, blockchain can also be beneficial for customers who do not have access to bank accounts. As in they cannot get to a bank, or they are paid online through PayPal or Payoneer, etc. This method can improve how customers pay for services and goods, thereby creating a better CX.
On the subject of goods, many customers complain about paying for goods and services not being delivered or done. The use of blockchain technology can solve a major problem in this field. One of the ways is that blockchain allows for goods to be tracked while in transit. Customers can see every point of the supply chain as well as information about the state of their package.
Furthermore, payments are released at every verified transaction when they are completed. What is more, is that all the information is transparent. Therefore, both the company and the customers can see what is happening. It presents an objective truth if the package got lost, or any other issues come up from either side.
Additionally, businesses would only be able to take payment if the package has been delivered. This can be verified through the blockchain. It will give reassurance to customers that they will not lose any more than they have if the package goes missing. The company can see issues in their supply chain straight away so that proactive action can take place.
2. Customer security
One of the biggest concerns customers have, certainly when it comes to online shopping, is their privacy. They are worried about their details, be it identity or credit card getting stolen. Allowing businesses to take note of this as well as jump into action.
Blockchain tech could be the solution. Civic, for example, is working on a system on blockchain to store customers’ personal information to make it easier for the customer to pass data security checks. All while keeping their information secret. It will not be held internal as is the nature of blockchain
Blockchain emphasizes privacy. Plus, the system of blockchain is opening the door to more sustainability in the CX field due to the lack of a source of information.
3. Smart contract
With blockchain, the idea of “Smart Contracts” can be realised. These types of contracts follow the “If/then” model. Thereby, actions are triggered when conditions are verified as being met or not met through the blockchain.
This can give peace of mind to the customers in that if a service is not completed by a company at a certain date then the customer will get a refund. Lawyers will not have to get involved. As well as customers not having to run after the company to get their refund.
However, if the service is done and even before the date it was meant to happen, then the payment is taken for the customer even if the work is completed early. Furthermore, if is it like internet, cable etc. then the actual services can start working before the due date. Smart contracts create a better power balance between the company and clients since they can benefit both parties while being transparent.
What is more, these clever contracts can also help companies to reduce the time and effort of fixing customer service issues. This is because everything is automated and transparent. So, if a service or product is not done or delivered then the company can jump into action to correct and learn why it did not go through in the first place. Smart contracts show the impact of blockchain on the CX industry in a positive light.
How the use NFTs can improve CX?
Blockchain and NFTs have a lot in common, with the most important being are that they can fight fraud. So much so that using NFTs technology can help increase customer loyalty. This is because NFTs can verify the authenticity of eCommerce products, thereby improving the customer’s experience. NFTs are unique vehicles of information aka digital snowflakes.
An example can be buying shoes online. A consumer can make an online purchase, and they are sent an NFT to their email. Therefore, when the physical item is delivered, they can scan the OR code to see if it is indeed the authentic pair of shoes they brought. The receipt has to match the record on the blockchain.
If the shoes are not what they ordered, aka fake, they have proof allowing them to receive a quicker refund, in theory. Furthermore, if the shoes are real then, depending on the company, the customer can also see other information regarding the shoes such as the materials used to make them, manufacturing, how they were handled, etc.
This can bring huge peace of mind to the customers as well as make the companies who use NFTs become more legitimate. All while strengthening brand loyalty. Blockchain and NFTs can benefit CX in many ways, making it a worthwhile investment for companies to learn and apply to their business.
The pitfalls of NFT and blockchain tech?
However, there is still a lot we do not know about blockchain and NFTs regarding CX. It is still a new technology that is open to many changes in the future, as all new systems often are.
When looking at the cons of using blockchain and NFTs there are environmental concerns since crypto uses a significant amount of energy. Cambridge University states in their study about blockchain and NFTs that the rise of crypto mining has increased global warming by about 2 per cent.
A potential downside regarding NFTs is, while they cannot be duplicated, they can be stolen. But this is a common concern when it comes to any form of technology. Blockchain and NFTs are not perfect technology, but we will see how what the future holds. Maybe they will overcome their pitfalls? Only time can tell.
However, as of now, the impact of blockchain on the CX industry could be a positive one. If the companies are mindful of the potential cons. As well as have methods to combat it as much as they can.