Superbrands case studies: American Express
Originally published in 'Consumer Superbrands Volume VI', July 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.
Case study provided by Superbrands.
To millions all over the world, American Express is the gold standard for plastic money and Travellers Cheques -- as the company that first introduced the travellers cheque and led the way in terms of plastic payment, American Express continues to occupy a place as one of the market leaders in travel and financial services. Its Brand, some 154 years old this year, is recognised the world over by individuals and corporations that use its products and services to help them manage their lives, whether that is through booking the dream holiday, or managing a portfolio of shares.
Today, American Express has more than 60 million cards in circulation worldwide, and in 2003 alone US$352.2 billion was spent using American Express plastic. In 2003, the Company reported an income of US$3 billion, up 12% on the previous year created through its offering of travel and financial services including credit and charge cards, currency operations, travel insurance, personal loans, online brokerage and international banking.
In the UK, the card market continues to grow and become ever more crowded as new players from online banks to supermarkets offer credit cards and financial products to their customers. American Express, however, has always been well placed to differentiate itself in this highly competitive sector with its wealth of experience and its broad portfolio of products all offering premium value.
American Express has truly achieved the status of a global brand, one that continues to redefine the experience of international travel for both the business and leisure traveller. The Brand's products and services are available in more than 200 countries and the Company employs over 70,000 staff around the world. American Express is committed to driving the brand forward to ensure it maintains its position as the world's leading provider of travel and financial services.
In October 2003 the Company completed its US$565 million acquisition of London-based financial services group Threadneedle Asset Management Holdings. The acquisition of the UK's fourth largest retail investment funds manager was a key step in the Brand's strategy to expand its financial services offering globally and provide a broader range of services to customers.
The Company's origins date from the opening of America's 'Wild West' frontier in 1850 and are linked with two legendary names, Henry G Wells and William G Fargo. Originally the duo, with the help of John Butterfield, launched an express freight company at a time when business was driven by the need for the safe and speedy transportation of gold bullion and bank notes.
During the 1860s as the US edged towards civil war, the Company transported vital supplies to Union army depots and undertook the risky task of delivering election ballot forms to troops in the field. In 1882 American Express introduced the Money Order as a safer alternative to shipping large amounts of cash.
By 1886 American Express had established links with banks across Europe enabling US Immigrants to transfer money to their families overseas. The Company also started to pay money by telegraph and sell small drafts or money orders which could be cashed at more than 15,000 outlets. Five years later the world was introduced to the American Express Travellers Cheque.
The revolutionary idea not only guaranteed that dollar cheques could be converted into a variety of currencies but also guaranteed that they were refundable if lost or stolen. In addition, American Express offices in England, France and Germany took their first steps into the travel business by selling tickets for transatlantic ships. In the early 1920s American Express expanded its travel and international financial operations to Latin America and the Far East.
The Business continued to grow after World War II and in 1958 launched the iconic Green American Express Card. The Card not only provided holders with a flexible means of payment in outlets throughout the world, but conferred an immediate status on the holder, a mark of exclusivity that continues today. In 1963, American Express launched its first Green Charge Card in the UK, which proved to be an immediate success.
In 1970 in response to growing demand from business executives it launched the Corporate Card to facilitate on-the-spot payment of business expenses and in 1972 the Company was behind the first mass roll-out of magnetic stripe cards.
In 1996 the Brand further broadened its base by introducing its first credit card in the UK and three years later delivered the payment industry's first nationwide roll-out of smart cards in the US with Blue. To coincide with the company's 150th anniversary in 2000, the Green Card was given a fresh contemporary look with new added benefits which reflected the holder's changing aspirations and lifestyle. Today American Express provides expense management tools to more than 70% of Fortune magazine's top 100 companies.
In 2000 American Express launched an innovative scheme to donate funds to the Arts with its Culture Card. Created in conjunction with Arts and Business, the card offers staff a discount at over fifteen cultural venues in the areas where American Express employees are based. It also provides financial support to participating venues, through the American Express Foundation.
American Express operates in three core areas, travel, finance and consultancy and its main businesses are American Express Travel Related Services, American Express Financial Advisors and American Express Bank. The financial advisors service was predominantly a US based operation although that has changed since the 2003 acquisition of Threadneedle Asset Management.
The banking division comprises three areas: correspondent, consumer financial services and commercial and private banking. However American Express Travel Related Services is the largest part of the business and generates around half of the Company's profits.
As well as travel, it operates American Express Card products. American Express is perhaps most famous for its Charge Card which has no pre-set spending limit and is available in Green, Gold, Platinum and, by invitation only, the Black Centurion Card which was launched in the UK 1999.
The Centurion Card offers the ultimate in personal service with a benefits package that is unmatched by any other card. With the Centurion Card, American Express takes personal service to a new level giving its Cardmembers access to dedicated teams of round-the-clock experts in travel, entertainment and finance, seven days a week, 365 days a year.
The Green Card, which is the cornerstone of the Brand, offers travel and entertainment benefits including 'bump-proof insurance', which offers Cardmembers immediate compensation if they are denied boarding access because their flight has been overbooked.
Building on the success of its Charge Cards, the Brand also leads the credit card sector with, for example its Blue Card. In the UK the Blue Card contains several cutting-edge benefits which include an Online Fraud Guarantee, Refund Protection and an Online Wallet. The Online Fraud Guarantee ensures that Cardmembers aren't responsible for unauthorised charges.
The Refund Protection covers Cardmembers for any goods they wish to return within90 days of purchase, should any UK retailer refuse. The Blue Card also offers a market leading 1% money back scheme on all purchases. Many Cardmembers benefit from the award winning American Express Membership Rewards Programme.
American Express has constantly been at the forefront of innovative development designed to improve services for its Cardmembers. In January 2003 in the US American Express introduced the industry's first smart card application that could be downloaded from the internet.
The new application, which adds another benefit to the Blue Card, stores and 'remembers' multiple websites, online IDs and passwords. Simultaneously, ID Keeper, provides a secure and convenient method to navigate and shop online.The Brand continues to be in the vanguard of providing a convenient and hassle free alternative to cash.
The Brand is trialling ExpressPay, a fee-free key ring powered by radio frequency technology (RFT) which was developed for use in outlets such as fast food restaurants, supermarkets and petrol stations, where speed and convenience are paramount. Users simply hold the key ring next to a reader at the checkout. Payment is authorised in seconds and a signature is not required. Payment is automatically deducted from the customer's American Express or any other card as they prefer and purchases can automatically be tracked online.
American Express has always been one of the leading advertisers in the financial services sector. In November 2002 it launched the 'Long Live Dreams' campaign. The heavyweight multichannel media advertising campaign supported through cinema, outdoor, interactive and direct mail, designed to demonstrate how the Brand's financial and travel services help customers as they achieve their dreams.
The TV work, which was mainly shot in Brazil and Argentina, was directed by Jake Scott of Plunkett and Macleane fame and son of Ridley Scott. The American Express philosophy of supporting customers as they realise their aspirations is also reflected in the Brand's sponsorship and PR activities. American Express continues its successful collaboration with leading fashion designer Alexander McQueen on a number of projects including the launch and design of the first Haute Couture Gold Card.
In 2002 the Brand extended its support of the UK fashion industry to up and coming photographers by launching The American Express/Independent Fashion Photography Competition. 2003 winner Lucy Hamblin's prize included shooting backstage at McQueen's Autumn/Winter Paris fashion show, £8,000 worth of photographic equipment and money as well as an exclusive photoshoot for The Independent. Additionally Lucy collaborated with American Express on a special project supporting the Brand's sponsorship of the 2003 MTV Europe Music Awards.
The Brand also deepened its fashion credentials in 2003 by announcing a partnership with Boudicca - considered one of the most exciting designer labels to emerge onto the British fashion scene in recent years. The Brand also launched the 'In Your Dreams' talent search with Elle magazine to give eight young hopefuls the once in a lifetime opportunity to create their own miniedition called 'Future Elle'.
American Express has been involved in 'enabling dreams' in other arenas too by sponsoring The American Express Franklin Memorial Expedition. This pioneering project retraced the steps of the ill-fated Sir John Franklin, the British explorer who sailed to the Arctic in 1845 in a bid to discover the North West Passage, a much sought after trade route that would link the Atlantic to the Pacific.
American Express continues to enjoy an international reputation for prestige and excellence as a result of its commitment to constant innovation to drive the Brand forward. This innovative spirit which pioneered the original Charge Card in 1963 has meant that American Express consistently develops ground breaking products to suit consumer spending needs. Despite many imitators, American Express distinguishes itself in a competitive market place by combining first class products with superior customer service.
Things you didn't know about American Express
In 1999 a wealthy Texan made an unusual purchase with his American Express Card in a pub. He paid US$500,000 for the Irish Bar in Texas.
A Boeing 707 flying from Harare to London was spared an embarrassing wait at Marseilles by a Cardmember. The pilot asked the passengers it they had £2,000 to pay for landing fees at the airport. After a stunned silence, one of the passengers offered to pay with his American Express Card.
Four survivors on a plane which crashed in shark infested waters were saved from certain death when one of them flashed his American Express Card at the sun to attract a coast guard plane.
A property developer earned more than 2.4 million Membership Reward Points with his American Express Card after successfully bidding for a painting which fetched nearly £2.478 million at auction.
© 2004 Superbrands Ltd
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