Loyalty Has Its Privileges
A college friend once ran for student government president on the sole campaign promise he would shake the hand of every student on campus.
Marla Isackson, vice president, customer and product management for the customer card services group at American Express Travel Related Services, probably won’t be shaking the hands of all 23.3 million U.S. cardholders. But they are likely aware of her personal touch, if not of the person behind it, and the 3 million enrolled in Membership Rewards-a points-for-dollars-spent program-receive direct benefits from it.
Isackson, whose duties revolve entirely around existing American Express customers, sums up relationship marketing by saying that every time a company communicates with a customer, it is an opportunity to reinforce the value of the relationship. And that is accomplished through a triumvirate of value, relevance and return-making the right offer at the right time.
The program works: According to Isackson, first-year lift in card use averages around 25%, and retention rates are “significantly higher” among Membership Rewards cardholders.
The basics of relationship marketing, according to Isackson, are to provide value to one’s customers, along with relevant information. Success in relationship marketing is measured by gauging return, whether through increased usage or overall satisfaction rates. Isackson’s department measures customer satisfaction both proactively and reactively; it does the first through two cycles of questionnaires a year that are mailed to select member groups, and augments the data collected by randomly surveying customers who contact call centers.
One change that came about as a result of customer contact and surveying was to the newsletter. Membership Rewards members indicated their desire to have as much information conveyed to them as easily as possible, preferably in one place. The result Amex generated was a newsletter combined with the customer statement that made it easy to keep track of reward levels. Since August program enrollees have received a statement that not only enumerates the reward points they have earned, but highlights special offers and new promotions.
Part of Amex’s success with Membership Rewards is making sure that participating merchants derive value from the program. “We work very closely with merchants,” says Isackson. “We want to make sure that we drive business for the merchants as well as develop appropriate value for the consumer.” Participating partners like Continental Airlines, J. Crew, Godiva Chocolatier, National Car Rental, Marriott and Disney (among many others) seem to agree.
Cardholders who do business with merchant participants in Amex’s separate CustomExtras rewards program receive a billing statement that makes offers tied to their behavior. Under this program, members who eat at a specific restaurant, stay at a specific hotel or buy at a specific retailer are given a chance to earn freebies through subsequent transactions. Each billing statement provides updates on the number of transactions needed to earn the premium in question.
Relationship marketing has been a hallmark of Isackson’s 10 years at American Express. In previous positions, her management of lending products and bal ance-transfer initiatives helped increase Amex’s balance-consolidation business by more than 500%, a success rate she partly attributes to tailoring payment options to meet consumer needs.
For the future, Isackson plans to refine offers to individual program participants and cardholders to the “one-to-one” marketing ideal.
Isackson offers one underlying theme to all of the company’s contact mechanisms. “In whatever we do we want customers to understand that we are the world’s most respected service brand. It is the foundation of everything we do.”
