I had to look up something at UrbanDictionary.com, and ran across the phrase "wastin' my minutes," which is a response to someone saying something stupid, particularly on your airtime. So that seemed pretty apt when I read about Amex's Terms of Service changes that I probably blew off in the rest of the junk that was stuffed into last month's bill. Following up on that, I caught wind that they are disposing of potentially toxic assets--in the parlance of our recessionary times--by paying them to pay off off their debt.
So let me see if I have this straight: AMEX is paying $300 a throw to shoo away customers who can pay their bill in full. At the same time it is risking the loyalty of paying customers with cheesey nickel-and-dime annoyance. (Not to mention the fact that people like me, who have been paying in full every month for twenty years won't see that $300.) I've seen bridges burned in my time, but rarely from both ends.
But the encouraging news for anyone else in business is that you don't have to be this stupid, either in recruiting or retaining your own customers. One of the joys in being a fractional fraction of the size of American Express is that you have waaaay more control over choosing your relationships. True, sometimes you might have to go with the questionable ones to keep the lights on. But you make that decision with far more data--even "soft" data like the proverbial gut-check counts--than you can when credit scores are all you have to go on.
And more aptly, you have far, far more control over what your customers ultimately do to your brand.
A story to illustrate: I was in college in the '80s, when deregulation brought credit card companies out of the woodwork. Seriously, you heard news stories about cats being mailed pre-approved plastic: I am not making this up. I was working for barely above minimum wage--part time!--and carried more credit than my mother--maybe even my father--would have been eligible for ten years before. It was a joke: I made a game of collecting the stupid things, some of which I never once used.
And my American Express card was no exception. Diner's Club aside, that was the "trendy" card, most expecially when it came in metal colors. And lo and behold, I was still working for barely minimum wage right after college when AMEX called to ask me if I wanted to upgrade to Gold. I humored their rep. by answering all her questions before asking, "Okay, now this is the part where you ask me how much I make in a year, right?" And then she blew my mind by saying, "No, you're pre-approved."
That, friends and bretheren, is the sound of a brand diluting itself. Cachet relies on exclusivity, and American Express flat-out blew it by thundering along with the rest of the plastic-money stampede. Mind you, I had a killer credit rating (for my age) b/c I'd always, ALWAYS paid all my balances in full every single month. But they blew it anyway. A twenty-three year old Midwestern liberal arts grad? Please. That's about as far from the Gold Card image as you can get without going completely ghetto--and even ghetto had more cool factor, even in the day when hip-hop was still called "rap music."
So, to reiterate in the wake of that long-winded anecdote, savor your power of choosing your customers. And rejoice that Wall Street-league stupid is far from mandatory.
