Cities have become much smarter in recent years. Governments now understand the potential benefits for their citizens of utilizing technology to increase the efficiency of their services. There have been celebrated success stories from Barcelona to Stockholm.

But there’s one problem.

Many smart city initiatives rely on the active collaboration of its citizens, and many citizens can’t really be bothered unless they see a direct benefit to themselves.

So should governments consider rewarding citizens in the same way that companies reward loyal customers?

A city’s loyal customers

Customer loyalty is something everyone is aware of and comfortable with. Customers receive points to redeem based on how much they spend with a particular brand. But what about loyal citizens?

Well, let’s call them smart citizens, after smart cities. Of course, there are many citizens who want to contribute to municipal programs and will do so out of personal satisfaction or self-imposed obligation. But this isn’t true of everyone. Even if citizens know deep down that they should contribute to make life better in their city, they tend to have other priorities.

An incentive would appeal to a broader audience, aside from the conscientious citizens. It would promote civic responsibility and a sense of community – especially if small actions taken by individuals could be measured. That way an individual’s small action multiplied by thousands of people taking similar small actions can produce very material results.

Incentivizing citizens is easier now than it was in the past mainly because of technology. Evolving technology is driving down cost and making it more viable and increasingly normal for governments to engage with citizens via an open communication channel.

A city could offer a form of loyalty point to its citizens for actions that could be measured using an App, such as riding a bicycle rather than driving. The key to it being measured is that the government could report on smart city participation on an individual level, as well as by neighborhood or the city as a whole.

Citizens, like customers, need incentives

Such “gamification” in Smart City projects appeals to both the rational and emotional side of each citizen and the combination of the two makes the program more inclusive for everyone. So the desired impact is greater.

The incentive could have a monetary value, or alternatively could involve the awarding of some type of token. This might get redeemed for something that could have no cost (like privileged access to an event, a certificate, or other digital goods). Even if the award had zero economic value, we can still measure the action and do the reporting.

At Currency Alliance, we have created a universal loyalty currency called comcoin. It can be used as a primary or secondary loyalty currency for customers across a variety of brands. We believe that in order for both consumers and merchants to make the most of a loyalty program, there needs to be a worthwhile incentive for customers to join.

In the same way that merchants are now learning to communicate with customers online in order to increase engagement with their brand (see Social loyalty programs improve customer engagement), so too, in the near future, will cities.

Openness and honesty

Brands will always have some really loyal customers that are incredibly engaged with their products or services in the same way that some cities will always have conscientious citizens that want to do all they can to improve the quality of life in the place they live. For the others, a combination of open, honest dialogue and incentives that are relevant to them will show them that you care.

And then they’ll start to care, too.

Whether it’s loyal customers or smart citizens, the key for brands and cities is to make their efforts feel appreciated; and, through regular communication and incentives, encourage them to keep it up.

If you would like to talk further, have any comments, or would like information about our universal loyalty currency, comcoin, please get in touch with us.