Points-Based Loyalty Programs Can Work in Sports—With Tech Evolution

Points-Based Loyalty Programs Can Work in Sports—With Tech Evolution

Loyalty is viewed by sports properties as the ultimate prize.

And that’s with good reason. According to a Motista study, fans with an emotional connection to a brand have a 306% higher lifetime value (LTV) compared to those merely satisfied by it.

So, it makes sense that rights owners across the industry have implemented rewards programs meant to cultivate deeper bonds with their supporters.

However, despite significant investment in sports loyalty platforms, closed loop points-based programs have largely failed to deliver sports properties returns on par with what airline and hotel brands have been able to achieve (see: Marriott Bonvoy’s NFL activation). The lack of redemption options offered, liquidity challenges (think: ways to earn points), and high points breakage rates have all undermined their efforts.

That doesn’t mean sports organizations should give up on the rewards concept though. Most simply need to reimagine how their respective programs work. 

By integrating artificial intelligence (AI) and blockchain technology into their loyalty processes, teams and leagues can create an open system that drives fan engagement, sponsor value, and revenue growth, while unlocking the strategy’s potential for the long-term.

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Points based loyalty programs offer rights owners a powerful opportunity to transform casual fans into avid supporters and make them vocal champions of the organization. 72% of American buyers are more likely to recommend a brand that has a loyalty program in place than one that doesn’t.

Rewards programs can also be highly profitable and valuable, when executed correctly. For context, Delta Airlines' SkyMiles program is worth ~$27 billion.

That valuation is reflective of SkyMiles' robust partner network and a busy transaction log—factors most teams lack. Sports organizations typically operate far fewer events, have less customer touchpoints, maintain smaller partner networks, and the redemption options they provide tend to be limited (think: merchandise and tickets). 

But the biggest challenge rights owners face in achieving SkyMiles-like success is finding ways to make their program's points feel valuable year-round, and not just during the season. 

Of course, none of this means sports properties should abandon their points-based loyalty programs. They simply need to address the shortcomings.

Rights owners can do that by:

• Building Broad Partner Networks: That means aligning with brands their fans interact with on a daily basis to expand the program’s earning and redemption options.

• Developing Year-Round Engagement Opportunities: Introduce ways for fans to earn and redeem points when there aren’t games scheduled on the calendar (think: digital activations, gamified content). 

• Leveraging Technology: Use AI to identify high-value fan behaviors, and subsequently blockchain to create tradable, liquid points systems.

Doing so will shift the program’s focus from raw spending (or a generic rewards bank) to strategic resource allocation, ensuring it delivers meaningful value to fans and remains sustainable for the team long-term.

AI can help power personalization, optimize fan communication, and unlock loyalty’s full potential when layered on top of a best-in-class points program. The next-gen tech is capable of adjusting point values based on individual fan behaviors and/or product demand (think: making rewards worth more during slow sales periods like the offseason or when a team is playing out the string).

It can also analyze customer behaviors and preferences enabling a rights owner to deliver custom rewards and experiences for specific fan segments (think: sideline passes, meet-and-greets, or exclusive digital content), and identify at-risk supporters (e.g., season ticket holders with declining attendance). Knowledge of the latter empowers the club to re-engage those individuals with timely, relevant offers and/or bonus points before they mentally check out.

These kinds of deep AI-powered insights empower teams to authentically integrate sponsor activations into their loyalty programs too. Doing so can make a fan feel as if he/she is receiving a perk as opposed to a typical ad and will often deliver a greater return on investment to the brand partner than a static one would.

The Sacramento Kings are among the first major sports organizations known to have successfully implemented platforms such as Salesforce Marketing Cloud with built-in AI-powered features, and AI-powered tools, like Einstein Engagement Scoring and Send Time Optimization, into their rewards processes. These software solutions deliver the actionable insights that make the club’s loyalty program particularly effective and profitable.

For context, the team’s Net Promoter Score (NPS) rose by over 100 points, and the club achieved a 25% YoY increase in season ticket renewals, reaching a 10-year high, following its 2019 deployment of the Salesforce product. 

While AI solves for segmentation and customization, blockchain-based tokens can address many of the limitations associated with traditional points-based rewards systems–including the liquidity issue cited. Remember, unlike traditional points which are locked within a team’s ecosystem, blockchain-based tokens are inherently tradeable and transferable across platforms (and on secondary markets). 

The liquidity –and portability– make on-chain points more appealing and valuable to fans, and allow for a dynamic fan engagement marketplace to emerge.

To be clear, blockchain loyalty platforms exist in sport. Platforms, like Socios, help teams (including FC Barcelona) to create fan tokens that ‘give supporters a voice’. Fans can use $BAR tokens to vote on inconsequential club decisions, such as messaging on the captain's armband or design elements for Spotify Camp Nou (the team’s official channel). The tokens also give holders access to exclusive content and unique rewards.

It’s worth mentioning that Barca’s initial token sale generated $1.3mm in less than two hours (note: values of some team tokens have decreased significantly since launch).

Like with Socios, the tokenized system we’re describing would allow a fan to predict game outcomes, take quizzes, and complete challenges. The difference is that the tokens associated with open-loop loyalty programs, like the ones airlines and hotel chains have, and that sports teams should implement (with our help), hold value beyond the gamified environment.

Although AI and blockchain technology continue to evolve, it has become clear that together they can aid organizations looking to supercharge their points-based loyalty ecosystem. We’ll use future columns to highlight examples of new platforms or successful strategies teams are using to deepen fan engagement, drive sponsorship revenue, create tradeable assets, and future-proof their rewards strategy.

In the meantime, remember that program success isn’t to be measured in transactions or dollars. Loyalty is about building lasting emotional connections—and AI and blockchain can help.