American Express is driving engagement with customers through its recently launched mobile-based loyalty scheme and plans to make the app a greater focus in how it markets to customers.
The instant rewards program, AMEX Offers, was officially launched with a campaign in June, but has been operating for just over a year. It was designed to appeal to a segment of customers that were not engaging with AMEX’s existing points-based rewards program.
Julia Nestor, VP of brands, rewards and digital commerce at American Express, outlined the strategy at the Forrester CMO conference in Sydney.
“We found that customers who spent a lot found [the points program] great, but those who didn’t spend as much didn’t like waiting around to accumulate points for bigger rewards, and it was taking away from the experience,” Nestor said.
To engage those customers, AMEX wanted to develop a scheme that reflected the role mobile plays in purchase decisions and offer more instant gratification. For merchants, it’s designed to encourage increased spend and attract new customers.
Because the program can take advantage of all the shopping data that AMEX holds onto regarding where its customers shop, how often, and what they buy, it can feed that back into the algorithm to tailor its offers.
For instance, a customer might trigger a type of offer through a particular purchase. “The closed loop data is what powers the whole thing,” Nestor said. “It gives us the ability to provide highly relevant offers. So, buying an airline ticket [via AMEX] might trigger offers for an Uber to get to the airport, then when they get there we can send duty free shopping offers or reminders that we have airport lounges, so we’re providing a whole experience. It’s frictionless.”
The mobile-based platform also eliminates the need for coupons as the deals and offers customers choose within the app are automatically stored on the credit card and are automatically redeemed at the point of purchase online or in-store. Offers appear in the transactions feed within the app, along with push notifications if an offer is due to expire.
For the first six months, AMEX funded all the merchant offers that went live on the program, but it is now completely funded by merchants. The deal is performance-based, so merchants only pay when they are getting a sale. The program rolled out from the US where AMEX funded all the deals for the first year.
Since its launch, it has run 272 offers with 140 merchants. The highest rate of conversion on an offer reached 70% - the average is 24%. AMEX will soon add a points collection element alongside instant rewards and the credit card firm plans to use the mobile app as a marketing channel for other activities because of the high levels of engagement it is seeing.
The mobile platform is also allowing AMEX to see strong returns for a program that is less labour intensive than other marketing endeavours.
“Compared to other marketing campaigns we run - they are very expensive, very time consuming – for us to be able to get these kinds of results from a very automated, rewards program is fantastic,” Nestor said.
“The app is going to increasingly be a way that we market to our customers, not just merchant-funded campaigns. We’ll focus on new customers, loyal customers and we also have a strategy to use it as a channel to reach lapsed customers. The platform has really grown and so has what it’s able to do for us.”
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