We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another. In its scale, scope, and complexity the transformation will be unlike anything humanity has experienced before –Klaus Schwab on Blockchain Technology
Now more than ever, the issue of trust is a crucial concern in the 21st century business environment. Historically, breakthrough society-wide technological advances have far-reaching effects. Aside from unveiling new approaches to doing business, it also changes and heightens consumers’ expectations, changing relationships that transpire between brands and customers.
Blockchain technology is to trust as the internet is to information. Blockchain technology is to raise customer expectations on trustworthiness and transparency. Blockchain is not characterized merely as a disruptive technology that attacks a business model with a better solution and overtakes incumbents’ firms quickly. But rather, blockchain is foundation technology; one having the potential to create new foundations for economic and social systems (Iansiti & Lakhani, 2017).
In Ghana, companies such as MTN Ghana, DHL, PricewaterhouseCoopers, and other blockchain driven groups have taken interest in discussing how blockchain can be adopted in the Ghanaian business space from supply chain and logistics, financial transactions, real estates, health, oil, and gas among others. Blockchain is set to transform dozens of industries in the upcoming decade, pretty much the same way the internet did to the communications industry. Blockchain ensures transparency and traceability of all activities by everyone in the network.
Then again, blockchain promises to make all kinds of middlemen or intermediaries, also known as trusted third parties, to become obsolete. Giant technology platforms like Google, Facebook, Twitter, LinkedIn are not excluded. These technology giants are third parties who keep and monetize consumers’ data. Though consumers are getting accustomed to this phenomenon, in principle, consumers’ not categorically owning their data is unreasonable if not unethical.
Blockchain Technology and Trust
Recent research pinpoints that trust in marketers is at an all-time low level. The steady decline in the level of trust to marketers has come to such a point that only less than 20 percent of consumers have a considerable or high level of trust in brands (Gallup, 2012). Likewise, C-level or high ranking executives are found to be the least credible information sources
Lamentably, in light of marketing, lack of trust adversely affects corporate brand reputation and brand image. Confirming this trend, a recent survey revealed that lying or misinterpreting facts about a product or service and intentional wrongdoing by corporate leaders were found to be the top two factors that negatively impact corporate reputation (Edelman, 2017).
Below are some of the ways blockchain technology will change the marketing narrative in terms of brands that adhere to the improvement of trust, value, and experience amongst customers.
Counterparty Identity Challenges
Trust issues become particularly important in the eCommerce setting. This is because not being able to fully identify counterparties in a transaction hinders the ability to conduct business with maximum consumer trust. As a consequence, despite substantial efforts, e-commerce adoption rate remains limited. In eCommerce platforms, there is a risk of counterparty’s declared identity being fake.
Blockchain eliminates this risk by applying pseudonymity; one’s showing their proof-of-identity on a protocol level (Iansiti et. al, 2017). Blockchain-based solution is also able to trace and validate the real identity of a counterparty in a business transaction. Brands that adopt and integrate blockchain technology stand the privilege of building consumer trust and loyalty.
Uncertainty About Brand Promises
Uncertainty about brand promises is reduced by blockchain. Customers can benefit from full transparency and traceability from blockchain-driven brands.
Crucially, blockchain enables full transparency and traceability of brand promises. For instance, brands who claim to be socially responsible, be it sincere or not will be subjected to customers’ scrutiny and verification on blockchain platforms.
Consumers will be able to instantly check the brands’ funds given to charities, check to what extent the brand is socially or environmentally responsible. The products ingredients of a brand could be irrefutably traced to see, for example, whether the product is organic as stated.
Furthermore, consumers’ will be able to see whether the brand they prefer employs workers under acceptable conditions (i.e. no child workers).
In the realm of the Ghanaian mobile telecommunication space, consumers will be able to see indisputably; customer complaint rates, customer satisfaction scores, product defect rates, and on-time delivery rates of blockchain-driven telecoms. According to Tapscott (2016), in the past, brands’ success depended on the dressing.
However, today, success depends on to what extent a brand undresses. Additionally, for authentic and genuine brands, Blockchain also serves as a means for counterfeit detection and brand protection.
Anticipatory Firms Should Pay Heed to Blockchain Technology
The blockchain devices market is expected to grow by 42.5% at a compound annual growth rate (CAGR) by 2024, according to recent research by intelligence and market research platform MarketsandMarkets. Blockchain’s unique structure provides cybersecurity capabilities. Blockchain also provides participants with enhanced transparency, contains multi-layer security at the network as well as individual levels.
Therefore, Ghanaian firms should take a keen interest in the development and solidification of such a technology which tech scholars refer to as the next thing after the inception of the internet.
Challenges of Blockchain Technology Adoption
Blockchain technology is still in its infancy and faces scalability problems. We need to wait at least several years till the technology is matured enough to be production-ready scalable. Then again, the absence of clear regulations and compliances and lack of awareness will constrain the blockchain devices market from its further growth.
Edelman (2017), Trust Barometer Annual Global Study, Edelman Trust Barometer Archive, Daniel J. Edelman
Gallup (2012). Confidence in institutions. www.gallup.com/poll/1597/confidence-institutions.aspx Access date: 10.10.2018
Holdings, Inc., 2017. www.edelman.com/insights/intellectual-property/edelman-trust-barometer-archive Access date 20.10.2018
Iansiti, M., & Lakhani, K. R. (2017). The truth about Blockchain. Harvard Business Review, 95(1), 118-127
Swan, M. (2015). Blockchain: Blueprint for a new economy. “O’Reilly Media, Inc.”.
Tapscott, D., & Tapscott, A. (2016). Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin.