Marketing Services

WillowTree’s Custom Approach to Loyalty Program Design in Financial Services

Successful loyalty program design is about more than points and personalization. To stand out in this hyper-competitive landscape, you need to quickly drive stakeholder buy-in, lasting investment in digital infrastructure, and successful partnership with a full-service provider. Those are all measures Caitlin Watson, Marketing Services Partner, and Jose Rodriguez, Staff Growth Manager, are well-versed in.

Caitlin and Jose have supported loyalty transformations, go-to-market strategies, implementations, and loyalty marketing automations in partnership with leading global institutions, including Manulife, Synchrony, IBM, and many more. WillowTree’s growth marketing team is known for its strategic vision and expertise in activating data-driven campaigns that amplify loyalty and drive revenue.

REPORT: Global Credit Card Rewards Programs: How Consumer Preferences Change by Region

As our experts highlight in the conversation below, the stakes are especially high in financial services loyalty programs. PYMNTS reports that nearly one-third of millennials — and 41% of Gen Z consumers — report dissatisfaction with financial institutions’ traditional loyalty strategies. Emerging fintech disruptors pose fierce competition by offering rewards that are better aligned with today’s customer loyalty trends (e.g., low interest rates, no credit limits, more flexibility, creativity, and ease of use).

Yet, the benefits of a truly best-in-class loyalty program are undeniable. Forrester estimates that rewards program members spend $99 more than nonmembers within a typical three-month period.

Join Caitlin and Jose as we peek behind the curtain into what makes WillowTree a global leader in effective loyalty program development.

How does WillowTree begin the loyalty program design process?

Caitlin: If the firm we’re working with has an existing program, we start by analyzing that. What is the current user experience or the overall program experience? What are its pain points vs. successes? Is it driving the right customer behavior? Is the organization meeting its KPIs and goals? Is the program financially profitable for the company? We want to understand their program and the overall loyalty landscape.

Jose: Our approach is very curated and customized to our clients. We want to understand their customer base and the client’s business model — because we’re designing for both. How do our clients make money, and what are their key drivers? Those may include user acquisition, transaction volume, repeat purchase, reward redemption, lifetime value, or customer retention.

We’re seeking diverse stakeholder buy-in to create a vision that meets the complex, evolving requirements of the business and its customers.

You’re right: those are complex spaces. How else are we breaking down business and user needs to drive growth?

Jose: When we work with existing programs, we evaluate their interaction and usage. We want to know if users are leveraging offerings and which features, in particular.

Often, one aspect of the program is often used or redeemed more frequently than others — or the customers who engage are not contributing incremental value. They are redeeming perks, like tapping into discounts or points earned, for behaviors they would have completed anyway — regardless of membership in the loyalty membership. Those inefficiencies come at a cost to the business, whether in sales or operations. We help correct for these, by design.

Competitive landscape analysis is another good starting point for our design process.

Caitlin: Yes! We’re helping clients evaluate their hypotheses. Sometimes, companies will approach us with a specific competitor in mind, or maybe a market or product their industry focuses on. Evaluating competitors while also broadening horizons can be critical.

I can understand how competitive analysis is a must-have in designing loyalty programs. But tell me more about broadening horizons…

Caitlin: Sure. Part of the value we bring to consumers and our clients is that we're not just helping them follow their industry's best practices. We're also considering where they can stand out — and innovate.

Where are opportunities to lean into best practices from adjacent industries? Or even completely different ones! Digital disruption is relevant in loyalty: it drives ROI and delivers value to consumers.

The huge potential for disruption feels especially salient to financial services firms, right?

Caitlin: Correct. What’s especially interesting is that there are many subcultures around loyalty programs. For financial institutions and credit card companies, often there are subcultures around redeeming rewards to book travel or get cash back, for example. Businesses have to decide if they want to play into those existing subcultures or differentiate their offerings.

“We’re entering a really exciting digital age for financial services: there are major players, of course, but niche disruptors are reimagining what traditional banking or credit cards can be.”
— Caitlin Watson, Partner, Marketing Services

My husband just started a small savings account with an emerging fintech company that uses a lottery system to incentivize users rather than more traditional loyalty offerings like rewards or points. Members of this brand can earn anything from a couple of pennies to millions of dollars. It’s the gamification of banking — and in a very nontraditional and new way.

Fascinating! So we clearly dive deep into market dynamics and user needs as part of our loyalty program design. What else?

Caitlin: We usually arrive at an inflection point, where we move into synthesizing our recommendations. Our design process maps out the underlying technology and data needed to implement the program vision. Those recommendations can range from minor considerations, like more personalized messaging, to tooling components and loyalty platform recommendations, to complete overhauls in loyalty program UX/UI.

Jose: WillowTree’s differentiator is that we’re a full-service partner. We have the team in place to rapidly implement every aspect of a loyalty program. We learn the voice of the customer and analyze each aspect of the customer experience — from value prop to journey flows to current usability. We evaluate qualitative and historical client data to ideate and validate new product features — incorporating a breadth of design and technical disciplines to prototype and test a proof of concept.

“What distinguishes WillowTree as a full-service team is that we can deliver a program vision that is informed, best-in-class, and readily actionable.”
— Jose Rodriguez

I’m hearing research, strategy, marketing, and design. Where do data and AI come into play?

Caitlin: We’re early adopters in terms of using AI tools to understand loyalty audiences, evaluate their actions, and predict their propensities. AI also plays an important role in messaging — we’re always investigating how generative AI can help us craft truly 1:1 customization.

Jose: There is a lot of opportunity in financial services to make sense of vast quantities of data. Customers are constantly spending and making transactions. AI presents huge opportunities for new product features that help customers visualize their habits, spending patterns, and savings opportunities. To present their own data back to them, if you will.

How do we typically end loyalty program development?

Jose: We end with a strong proof of concept. We want to test our proposed loyalty program in various forms, from superficial “Wizard of Oz” testing — where a user interacts with a digital product without knowing its responses are generated by a human — to robust, in-market testing or pilots.

Then, we construct a detailed financial model. We want to validate the business case for the work.

Caitlin: Yes. Those assessments help us shape our go-to-market strategy and inform our ongoing managed services. We want to help clients evaluate program performance and complete routine health checks.

“Industries are changing faster than ever. Companies need to constantly reevaluate their loyalty programs. There’s no longer room for a ‘set-it-and-forget-it’ approach.”
— Caitlin Watson

Jose: Speed-to-market is so important. You don’t want to spend your time building your idea of perfection. We know the right balance between agile innovation and what everyone else used to do — which was really slow and always behind the competitor.

Caitlin: I agree. Companies have to prioritize rapid iteration, speed-to-market, and growth. And, of course, building in flexibility for changes in the market, economy, consumer sentiment, and brand.  

Absolutely. But… Speed-to-market can be difficult for financial institutions to unlock.

Caitlin: Historically, there has been a lot of regulation around financial consumer data. Rightfully so.

“Fintech disruptors are proving that you can move very fast in this market. Legacy financial institutions have to be more agile. That’s going to become increasingly important as they strive toward capturing Gen Z and millennial market share.”
— Caitlin Watson

There is a lot to uncover and so much work to do in financial services. Every company has to be thinking about user sentiment among target audiences and rapid testing. Getting a clear picture of financial consumers can be very hard because there is so much user data to analyze.

That’s a critical element of loyalty program design that WillowTree can accelerate, and make sure you’re pointed in the right direction.

Meet WillowTree's Loyalty Experts

Caitlin Watson is a Partner, Marketing Services, and Loyalty Marketing and Technology Lead. Her experience includes 10+ years dedicated to increasing customer engagement and building customer loyalty and membership. Known for her strategic vision and expertise in brand positioning, Caitlin has played a pivotal role in optimizing loyalty initiatives in partnership with clients in QSR, financial services, banking, and the non-profit sector. Caitlin drives exceptional results by designing and implementing innovative experiences that cultivate lasting relationships while enhancing customer experiences and customer service.

Jose Rodriguez is a Staff Growth Marketer and digital strategist. He focuses on GTM strategy, CRM/loyalty marketing, analytics, and metrics. He has supported loyalty program transformations on behalf of major QSR brands, and led marketing automation services for clients like IBM Cloud. Prior to WillowTree, Jose gained expertise in performance marketing and strategic planning in hospitality, automotive, CPG, and retail. He additionally holds a MBA from the UVA Darden School of Business.

Want to meet the rest of the team? Take a tour of our loyalty strategy and customer experience consulting services.

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