Fantasy marketing to those who fancy being at the top end of town

Posted on November 25, 2010 by Nicholas Gruen
Posted in Humour

This afternoon I returned home from a day out doing various things Kaggle, and on the stairwell was a fancy black, clear wrapped package. I thought it was some fancy bit of nonsense for their frequent fliers points. Well it kind of was. It was their latest special card. I'd be chosen to be invited - this kind of thing doesn't happen to just anyone as the bumph was at pains to insist.

Inside an aluminium sheet which was the cover was a black mock 'Centurion card'.  Just think I could get a centurion card. Anyway, the brochure was about ten pages one of which appears to my left. Then read on. (below the fold) ground control had pretty much lost contact with Major Tom by the end of it.

2 Comments

  1. David Walker
    November 29, 2010

    From an early (1989) Michael Lewis essay, "Why You Should Leave Home Without It: The Growing Absurdity of the American Express Card":

    "Were American Express selling a normal good, the first thing it would do to meet the competition wold be to lower its fees. But the company maintains that it isn't selling a normal good. 'The card,' as the booklet says, 'is much more than a simple payments instrument...' Oh really? How so? '[I]t is based on a membership principle.' In other words, Amex is selling snob appeal, which has a logic all its own. And when you are selling snob appeal, trying to compete on price is not merely futile, it is self-defeating. An American Express card that cost no more than a Visa card would be worth even less."

    I haven't checked Amex's recent share of the credit market, but it certainly fell through the 1990s. This is a sales model designed for a different time - probably the early 1960s.

  2. Nicholas Gruen
    November 29, 2010

    Warren Buffett or as my son calls him 'Wazza Buffa' bought into AMEX when they were struggling only to convince them to act honourably on some payment that they were trying to wriggle out of - and the share price headed north soon after. That may have been the late 1990s though I think it was quite a bit earlier.

    I'm not sure they've got such a bad business model. They sit there getting a bit more out of merchants than Mastercard and Visa, and paying us a bit more in points while managing to get most merchants, or a lot to carry their payments. This includes supermarkets - on which I presume they take a much lower margin. This gives their (normal) card a lot of currency.

    In the meantime they head for the fantasy market with this card. They don't have a chance with me. But then the main pitch is a bunch of extras when you book first or business class. Now first and business class travelling overseas is serious money. So it seemed to me that this was quite a well crafted offer for plutocrats whose company pays the bills and couldn't really give a poo about the $4,300 annual fee. I thought it was smart marketing, but who knows. It's certainly over the top.