Founded in 2008, WillowTree was built on a heritage of mobile applications. While the company still engages in much of that work, it’s grown into other areas in support of brands, including strategy and consulting, data and artificial intelligence (AI), digital marketing, loyalty program design, and more. WillowTree works alongside brands to develop successful loyalty programs and, in many cases, administers them. The company works in a variety of industries, including Financial Services, Health Care, Telecom, Travel and Hospitality, Food Service, and Retail and Consumer Goods, among others.
Loyalty360 spoke with Caitlin Watson, Partner, Marketing Services, and David Shaw, VP, Business Development, at WillowTree. Watson has been with the company for the last three years, helping to develop the company’s marketing services department—specifically in the areas of loyalty, strategy, and technology—while also working to build out MarTech services, CRM, lifecycle, and all elements of the customer journey. Shaw has led insight and strategy teams for his whole career. At WillowTree, he leverages his experience in strategy development to help determine how the company can go to market with individual companies and with specific vertical strategies—many of which involve loyalty.
In this article, Watson and Shaw discuss applying the investment model of commitment to loyalty, building successful programs and strategies, and why brands should take the time to understand their audience and customers.
Defining Customer Loyalty
There are so many lenses in which to think about customer loyalty. WillowTree utilizes a variety of frameworks to manage it and help communicate what that means to brand clients. One of Watson’s favorites is the investment model of commitment. She believes it encapsulates all that goes into the psychological loyalty that a customer may be experiencing with the brand.
“It started as a theory and a model to measure interpersonal relationships,” Watson explains. “But over the years, it has become a means to quantify emotional loyalty and brand customer loyalty. The framework assesses relationship investment.”
Customers might wonder how much time and energy they are giving to a company. They might question how hard it is to interact with a brand’s services, download an app, or become a member of a loyalty or rewards program. The investment model of commitment considers how satisfied the customer is—if customers are left with good feelings and the perception that they are part of a larger community. Watson sees this sentiment as taking away any quality of alternatives and removing the perception another brand or item that can provide what they are is seeking.
“Overall, that equation sums out to customer brand commitment and how customer loyalty is measured,” says Watson. “With this model, we’ve seen accuracy across geos, regions, cultures, and industries. It’s an easy equation to follow and a summation of how to measure and think about customer loyalty for brands and companies alike.”
State of Customer Loyalty
In WillowTree’s State of Customer Loyalty Report, 79% of marketers said they have an internal interest within their brand to update, enhance, or completely redo their customer loyalty offerings.
“Clients come to WillowTree for help or for guidance, and they’re typically focused on strategies that will give them a competitive edge,” says Watson, noting that the average customer belongs to many loyalty programs.
Brands engaging WillowTree want to stand out—they want to present something different to consumers. They also seek to create a loyalty program that is a strong representation of their brand.
WillowTree not only acts as a marketing services partner but also as a partner that provides mobile app and digital product development. The WillowTree team often helps brands and clients think about how to create fun, gamified experiences that are going to create stickiness for customers.
“One trend we often encounter is gamification. There’s also a huge movement to update the underlying architecture that powers loyalty,” says Watson.
While clients might seek assistance in developing external items—like gamification—many brands realize they cannot move in that direction until they have a customer data platform (CDP) that organizes customer data appropriately.
The WillowTree team works to rethink the architecture so that those experiences can be powered going forward, partnering with clients at all stages of MarTech implementation and optimization.
Delivering Authentic Personalization
While brands are keenly focused on delivering authentic
personalization in their customer loyalty programs, sometimes they struggle with relevancy in their communications and offerings.
Watson points to the data. “Underlying those fun and exciting moments where that one-to-one personalization is a very complex—and often messy—data architecture.”
To power those experiences, marketers have to understand a customer’s history of interactions, preferences, who they are, and what they might like. WillowTree often helps brands assess and interpret their data—what they have, whether it needs to be cleaned, and what tools they need to orchestrate and automate customer experiences.
“It’s a tried-and-true crawl-walk-run approach where we help determine where a client is in the process and how can we move them to one-to-one relevant personalization,” emphasizes Watson.
Understanding and Leveraging Artificial Intelligence (AI)
While many brands are early in understanding or implementing AI into their loyalty efforts, there are significant opportunities.
Shaw believes AI is going to help WillowTree and its clients more quickly develop and iterate on novel marketing solutions.
“We are not 100% handmaking segments and not 100% handmaking journeys and paths that we’re pushing people down,” he explains. “But AI is going to let us accelerate what we’re doing and create more segments that maybe we didn’t anticipate or think about, including smaller ones.”
One-to-one is the goal. WillowTree wants to get to the most personalized journey possible for every brand’s customers. AI may be able to help brands get closer to where a micro-segment is acutely defined by customers’ interactions and preferences. While a human might not have the capacity to take a million customers and get into micro-segments of 30, AI can be a tool for WillowTree to leverage throughout that process.
“In pursuit of hyper-personalization, there’s always going to be a need for people interacting with AI,” says Shaw.
Building Successful Loyalty Programs and Strategies
WillowTree sees the greatest success when companies intentionally take the time to understand their audience and customers. Investing in customer research is imperative.
“We like to do what we call customer ‘ride-alongs.’ A great example is a beverage provider that we work with,” says Watson. “Our team spent two months riding along with their drivers and interacting with customers.”
The WillowTree team visited different stores and learned “beyond the paper” what the data could tell the brand about customer behavior and transactions. This was an additional way to understand intangibles—what the experience is like, all the way from the beverage arriving at a store to a customer purchasing it and taking it home. This invested time allowed the team to fully understand the entire journey, online and offline.
Creating experiences to delight customers along the way nudges them to the brand’s ultimate goal: fandom or loyalty.
“We also worked with a large sports entertainment company,” shares Watson. “They run wrestling events.”
Going to events, participating, and understanding where the offline and online worlds connect can facilitate understanding how customer delight and experiences can be created on the way to brand fandom.
“Deeply understand your customer, not solely by what your data is telling you. Go out there. Be present with them. Participate in user surveys—whatever it might look like for your company,” advises Watson. “Understand their real journeys, emotions, and pain points and then figure out how loyalty plays a part in creating a devoted customer.”
Learning from Others
Shaw is a Taco Bell fan. In particular, he notes two important components of its rewards program. Because members can earn items very quickly, they experience joy almost immediately.
“This is true for the tier I’m at,” he explains. “Members can frequently earn free items. Being at a higher tier likely plays into the emotional loyalty I experience. I appreciate that Taco Bell recognizes the tier I achieved.”
He also notes that when a reward is earned, there are greater choices with Taco Bell’s rewards program. He also cites Chipotle as another brand offering a satisfying rewards program and providing transparent methods on how to earn points.
“It’s right there at the checkout,” Shaw says. “I earn on a frequent enough basis to where I feel like the program benefits me.”
While Shaw is not drawn to the “badges and stickers” awarded in the program, others are, and it’s another form of recognition by the brand. Geo-fencing at store locations reminds Shaw to check in to ensure he’ll get more points. He sees this as a brand doing a lot of little things right.
Next in 2024
WillowTree is working to get as close as possible to one-to-one relevant personalization in the most authentic way possible. The team engages in internal conversations to determine how to craft a
customer loyalty program that is equal parts transactional-financial benefit—to reward the member—and emotional-recognition-based benefit.
“Members want to feel like a regular, and they also want to get free things every once in a while,” says Shaw. “Successful loyalty programs involve both those of those elements.”
If brands only deliver on one, they run the risk of customer churn. If an experience feels too transactional, the second a benefit or perk is turned off, members will stop interacting — whether through an app or in-store purchase. If an experience is solely emotional and free items or deals are never offered, the member may feel dissatisfied in a different way.
“We’re trying to blend those two approaches to make sure we’re taking a well-rounded approach to a loyalty program,” finishes Shaw. “That’s something every program should endeavor to do. Both sides of the house must be taken care of in a way that inspires the behavior that you want to motivate within the loyalty program in the first place.”
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Quick-fire Questions with Caitlin Watson
What is your favorite word?
Bespoke.
What is your least favorite word?
Propinquity.
What excites you?
The blending of art and science—which is why I fell in love with marketing and loyalty.
What do you find tiresome?
Meetings that could’ve been an email.
What book do you like to recommend to colleagues?
Oasis Conversations, by Ann Van Eron
What profession other than your own would you like to attempt?
I dream of starting a coffee shop. A small business owner.
What do you enjoy doing that you don’t get to do often?
Working with rescue animals.
Who inspired you to become the person you are today?
My father. He is a small business owner himself.
What do you typically think about at the end of the day?
Which Netflix show we are going to watch? Professionally: what did I learn?
How do you want to be remembered by your friends and family?
Someone who is very giving.