Why it works

American Express's research showed considerable insight into the small business market, recognizing the common concerns around expense management and cost savings. The new product features are completely targeted at small business—not a more general business audience. American Express is well respected in the market as a marketer that understands its small business audience.

The partners American Express has chosen are well targeted. FedEx, Delta Hotels, Hertz, IBM and McGraw-Hill Ry-erson are all well respected names —adding to the prestige of the card—and offer products directly targeted to small business. In addition to discounts, the cardholder benefits included memberships to other prestige programs; these in-

eluded Delta Privilege Blue (which provides expenditure reporting as a benefit) and Hertz #1 Gold (featuring time savings from prefilled forms and less waiting in line).

Establishing these partnerships is a smart strategy for a number of reasons. For the partners, it represents an opportunity to reach a wider audience. In our loyalty program survey, 63 percent of small business owners who could name one or more partner used that partner more after joining a loyalty program.6

As for American Express, the strategy now ties the card to incremental services that increase spending. An additional benefit to American Express is access to targeted client lists. Small businesses are very receptive to referrals from trusted partners. Co-branded marketing from their existing suppliers are likely to open doors.

The idea of using a savings program to offset a fee increase is a sound one. According to the Warrillow Report, 52 percent of small business owners that belong to a loyalty program would pay a $50 fee to accelerate their points by 50 percent or increase their discounts by 10 percent.

The creative underscored the prestige of the card by using the card's gold color as a symbol. Respect appeals to most small business owners and carrying the card can act as an outward symbol of success.

In addition, the copy gave the message "your business means a lot to us." This message is one not heard enough by small business owners—especially from their financial service providers. "American Express is one of the best," says Ellen Reid Smith, author of eLoyalty. "It is hard to say exactly why this was successful. It is partly due to the offering of savings on things they use today, but fifty percent of it [their success] was due to the empathy that they showed for small business. It is rare that a large company shows such empathy and respect towards smaller ones. This has huge resonance with the small business crowd."

6. Warrillow Report, "The Impact of Loyalty Programs on the Buying Behaviors of Small Business Owners," The Warrillow Report 04, no. 01.

American Express is used by Amex Bank of Canada under license from American Express Company.

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