American Express:Don’t Leave home without it

 In the competitive financial services world where every banker is vying for the new customers with their superiority in features, this company managed to stay ahead of the competition by positioning itself as a status symbol. I’m sure not many of us are really aware of the brand story of American Express. American Express aka Amex is an American multinational financial services corporation .Amex cards account for approximately 24% of the total dollar volume of credit card transactions in the US. BusinessWeek and Interbrand ranked American Express as the 22nd most valuable brand in the world, estimating the brand to be worth US$14.97 billion. Quite a feat compared to its competitors, Master card ranked at 97 & Visa ranked at 74

As all famous companies do, American Express has its own unique history. It began its life as an express freight company under the slogan safety & dispatch with a bulldog logo. Sometime between 1888 and 1890, J. C. Fargo took a trip to Europe and returned frustrated and infuriated. Despite the fact that he was president of American Express and that he carried with him traditional letters of credit, he found it difficult to obtain cash anywhere except in major cities. Fargo went to Marcellus Flemming Berry and asked him to create a better solution than the traditional letter of credit. Berry introduced the American Express Traveler's Cheque which was launched in 1891 in denominations of $10, $20, $50, and $10.The company grew its reputation as being reliable & trusted by helping US citizens continue to cash their traveller cheques despite troubled times like World War-II & Great Depression

American express is mainly in to two businesses: financial services, Travel. Interestingly, in 1994 American Express spun off its investment banking and institutional businesses as Lehman Brothers Holdings Inc which after almost fifteen years of independence would file for bankruptcy protection in 2008 in the late 2000 financial crisis. In recent news, American Express Co (AXP.N), squeezed by tighter corporate travel budgets, is in plans to sell half of its business travel division close in the second quarter of 2014 for up to $1 billion to an investor group led by Certares International Bank LLC

The strength of Amex lies in the fact that American Express uses a spend-centric approach, or as I like to refer to it, a people-centric approach. The theory is this: If a company charges lower fees, provides very lucrative offers, and generally provides a great customer experience, you'll have a card that people -- particularly higher-income groups would want to use and it therefore provides leverage over merchants.On the opposite end of the spectrum is MasterCard and Visa use a lend-based approach . By keeping merchant fees lower and flooding the system with cards, they've ended up with a card that is accepted by a vast number of merchants and is therefore a card people almost have to carry.

American express has broken through the clutter by differentiating from just a credit card company to a friend/ advisor for its consumers to manage their financials. For instance for its key market segment small businesses, it provides a virtual space for small business owners to make connections and share insights, American Express Open Works provides small businesses with the knowledge they need to power their own success. By promoting events like Small Business Saturday, American express through its various gestures and offerings shows that it is committed to supporting the small businesses

The brand name that it has built in the minds of its consumers is also through its unique advertising campaigns. The successful ad campaign featuring Oscar-award-winning actor Karl Malden gets the point across that "it could happen to you, so don’t leave home without them" promoted the American express’ travel cheques. An interesting anecdote about American express credit card ads is the sample American Express Card featured with the name "C F Frost" on the front. This is not a fabricated name, as Charles F. Frost was an advertising executive from Ogilvy & Mather. The recent ad campaigns feature famous American Card members  talking about their lives with the tag line "My life, my card". The emmy award winning black-and-white ad entitled "Animals" starring Ellen DeGeneres is worth a watch!

American Express was one of the earliest users of cause marketing, to great success. American Express conducted a four-year Charge against Hunger program, which generated approximately $22 million for a charity addressing poverty and hunger relief. It also generated approximately a 28% increase in American Express card usage by consumers.

With ubiquity of smart phones,high speed internet available everywhere,consumers have shifted to digital mediums to shop .American Express aims to transform beyond a company that mainly lends to consumers via credit cards in to major player in e-commerce  by pushing new ways for customers to use its cards on mobile devices and online.Lets hope American Express pioneers the way for  plastic free future!
           

 FYK

Just in case you were as curious as I was regarding how interbrand comes to its rankings about brand value.Well they take three parameters in to account:

1)Financial Strength:this is basically the economic profit a brand makes on its products & services. Economic profit is the after-tax operating profit of the brand, minus a charge for the capital used to generate the brand’s revenues and margins 2)Role of a brand:It measures the portion of purchase decision that is attributable to the brand apart from features like usability, convenience, technology superiority etc. The Role of Brand Index (RBI) quantifies this as a percentage

3)Brand strength defines the ability of the brand to create loyalty and generate demand. This depends on 10 factors such as clarity, commitment, responsiveness, protection. Also external factors like authenticity, relevance, consistency, presence, differentiation, understanding