Background

American Express has been a long-term player in the SOHO (Small Office, Home Office) market. In the past 18 months, American Express has introduced some significant changes to its Corporate Card for Small Business—changing the color of the plastic to gold, increasing the fee, and adding new benefits. Enhancements to the product included a small business savings program through which entrepreneurs can save up to 45 percent on everyday business purchases with FedEx, IBM, Hertz, Delta Hotels, and McGraw-Hill Ryerson.

However, a key challenge in marketing this revitalized product was to manage a simultaneous fee increase from Can$60 to Can$99 (approximately $40 to $66) annually in order to maintain profitability. In February 1999, statement inserts communicated this fee change. In the following 15 months, all cardholders were billed the increase upon the anniversary of their cards; the billing of a fee is frequently a critical event for customer defection.

This campaign was designed to retain current card members and communicate the value of the card in order to increase charge volume despite the new fee. In addition, the company wanted to continue to acquire new customers to maintain or increase current cards in force.

This campaign ran in the Canadian market, although a similar one was launched in the United States.

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