You wouldn’t expect a 150-year-old financial services company to be at the leading edge of innovation in a brand new field such as digital and social media, but that’s exactly what happened when, in 2006, American Express plunged into the fray.
By experimenting in the space early, its leaders were able to learn what works, what doesn’t, and through successive iterations, build out a successful social strategy that created substantial profits.
From members only to the open web
First, American Express developed a social engagement campaign in 2006 called Members Project, which allowed card members to vote for their favourite charity, with American Express contributing the funds. The campaign generated a lot of positive publicity, but contributed little to the bottom line.
Then, in 2008, the company started focusing on Twitter, first by launching a Twitter account (@AskAmex) to handle service-oriented issues, then later by rolling out a generalized account (@AmericanExpress) as well as a series of Facebook pages.
Next, American Express switched its focus from connecting to its customers, to strategies that connected members to each other.
A digital strategy gets social
To bring members together, the company launched Members Know, a travel community within the American Express website, which allowed members to share travel tips with each other, and view data on the most popular travel locations, hotels, and restaurants among fellow card members. The site also had content areas managed by the editors of Travel + Leisure Magazine, a company-owned travel publication.
Members Know generated a substantial amount of traffic and facilitated many interactions between card members, some of which, importantly, began to translate into business benefits.
The company’s research showed, for example, that card members were more likely to continue paying for their cards to continue to access the Members Know community.
They were also more prone to use their American Express cards in locations discovered through the Members Know community.
Opening up the Open Forum
The high member engagement on the Members Know project led American Express to incorporate similar principles into its OPEN Forum initiative, an extension of American Express’s OPEN credit card unit targeting small business owners.
In 2007, the company launched openforum.com to help it share content from its offline conferences, which brought together small business owners to discuss the issues they were facing.
In 2009, OPEN Forum relaunched with two major branded features. The first was Idea Hub, which displayed content from thought leaders in the form of articles, blog posts, interviews, and videos. The second feature was the Connectodex, which allowed American Express OPEN card members to establish an online profile of themselves and their business.
This new iteration of OPEN Forum quickly garnered a lot of traction. By summer 2010, it had more than one million unique visitors per month – more than three times its total from the year before.
Furthermore, research showed that OPEN cardholders who also use Forum have much higher net promoter scores – a gauge of their likelihood to recommend the card – than cardholders who do not use Forum.
Learning to Link, Like and Love
Next, American Express developed a program called Link, Like and Love, which allowed cardholders to enroll in offers that gave them a statement credit if they spent a particular amount of money at a particular retailer.
When a cardholder enrolled in an offer, American Express asked if they wanted to share it with their Facebook friends or Twitter followers. Much to their surprise, many members did, which allowed American Express to obtain numerous new cardholders without actually having to pay to acquire them!
Encouraged by the powerful business results generated by the Link, Like, Love program, American Express released GoSocial, which allowed merchants to draw up their own offers and distribute them through American Express’ social channels. Then, American Express provided participating merchants with data on the number of redeemed offers, the average purchase value and the total amount of sales.
The introduction of GoSocial signals a significant change in American Express’ strategy.
Whereas in the past, the company’s success was attached to efficient settling of funds for transactions that were arranged by others, now the company is moving towards using its proprietary data to facilitate transactions and then settle the funds.
Big brand, small changes
American Express showed us that large established firms rarely launch a set of fully developed social strategies. Instead, the company started with smaller-scale projects, with fairly limited economic potential. Learning from these projects, it then developed new initiatives that had much bigger impact on competitive advantage.
This iterative process was important because it overcame resistance to change in the organization. It created small wins that threatened no one, but were used to justify further investments into social strategy.
These investments created bigger wins and then bigger investments until social strategy became central to American Express’ business strategy.
Excerpted from A Social Strategy: How We Profit from Social Media by Mikolaj Jan Piskorski. © 2014 by Mikolaj Jan Piskorski. Published by Princeton University Press. Reprinted by permission.