With reports last year of a shift to the the mass consumer market AmEx is keen to stress their premium card holders have not been forgotten. Miguel Stein talks to Lisa Gregg, vice president of consumer products and experiences at American Express
American Express (AmEx) consider the premium card market old hat. Having been in the business for 50 years it’s not surpising that
the vetern card company is thinking of branching out and taking advantage of the high quantity of underbanked in the US. AmEx though i s adament this will not be to the detrement of its core mass affluent segment.
Go deeper with GlobalData
What have been the key trends in the premium cards market? What major developments and challenges do you foresee?
– American Express continues to drive strong growth amongst affluent consumers and the premium card market remains core to our business. We launched our first Gold Card in 1966, Platinum in 1984 and super premium Centurion in 1999 and so this is a sector of the market that we know very well and have seen evolve and change over time.
– One trend that we are seeing, particularly coming out of the recession, is that consumers are moving away from conspicuous consumption to more considered consumption where getting access to special and unique experiences via their card is a must. This is a key differentiator for us and something we have invested in significantly over the past few years across our premium portfolio.
– We have global deals with leading entertainment companies such as AEG (owners of the O2) and Live Nation so that we can supply early on sale tickets to some of the most sought after events and concerts. Our Centurion card members have 24/7 access to a dedicated concierge service that can arrange everything from flights and hotel bookings to sourcing that special birthday present. And a dedicated relationship manager who can not only consult and arrange a bespoke holiday but also arrange one off, money can’t buy experiences for our top customers, such as an experience with the Grammy Museum, foraging with a world famous chef, or backstage at London Fashion Week.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData– In terms of challenges, while spending slowed during the downturn, we have continued to grow our premium business. This comes down to having a clear product line strategy offering customers cards that are tailored to meet their current needs and add value to their lives in some way.
– In recent years we have seen new entrants come into the market with ‘Premium’ Cards in countries such as the UK, France and other markets around the world which in some instances are simply gold or platinum in colour but have few additional benefits or services that warrant the name or fee charged. Unfortunately, this had led to a devaluation of the category in the minds of some consumers.
– To be successful in this sector, we recognise the importance of customer segmentation – the needs of a Gold card member can be very different from the needs of a Platinum or a Centurion. Consequently, we tailor and differentiate these offerings but the common thread is that they all have to deliver incremental value and all our Cards offer some form of rewards – such as Membership Rewards loyalty points (which can be redeemed for hundreds of treats and essentials including flights and overnight hotel stays) or free airline companion tickets when customers spend over a certain threshold on their American Express Card.
How have marketing and branding evolved, especially with regards to relationship-based card programs?
– Again, I would say that our marketing has evolved in line with changing consumer needs and expectations in the affluent space. In addition to satisfying our card members’ increasing desire for special and unique experiences that enrich their lives in some way, we also recognise that they are travelling more than ever – often up to a third of their year is spent on the road either for business or pleasure. This means that our travel benefits have to be second to none – whether that’s access to airport lounges or hotel upgrades and dining recommendations whilst abroad or simply being able to access your account details whilst on the move.
– We communicate with our Premium customers through a combination of emails, dedicated website, card member magazine and importantly over the phone or online with our servicing and concierge teams.
What is your expectation with regards to growth in premium credit cards?
– We expect to see the growth trend continue at or around double digits. This is likely to be even higher in emerging markets.
– The emerging markets, such as Russia and Brazil represent a high growth opportunity for premium cards.
How important are online channels to engage affluent customers? (e.g. social media and smartphones)
– Online channels are a particularly important way of engaging with affluent customers. They are very tech savvy e.g. according to the latest Online Luxury Index from Journal International – 78% of affluents own a smartphone, 74% own a tablet and 60% have both.
– The Index also highlights that 86% – 92% of affluent consumers shop for high-priced luxury products online and 41% expect to do so more often in the future. The online portion of their total luxury expenditure averages 32%.
– We regularly communicate with our card members via social media, such as Facebook and Twitter in some markets – both from a marketing and servicing handle. We also offer benefits in the online space, for instance, in certain markets such as the UK and U.S. all our customers have access to Foursquare offers, where by simply syncing their card they can take advantage of deals when out on the high street or dining out.
– We also have a mobile Amex app available in a number of countries so card members can access their accounts on the move. The app enables them to manage their account, view current offers, get information on their Membership Rewards, make payments and view transactions, all from their smartphone.
What are the key trends in the risk management of premium credit cards?
– We operate rigorous risk management processes across all our product lines, tailoring as appropriate for credit and charge cards.
