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American Express’ divorce with Costco has been widely publicized, but now the financial services company is on the hunt for more growth opportunities.
CEO Ken Chenault said the company is accelerating its spending in order to attract new cardholders and expand its network of retail partners, reports Bloomberg. This is part of an overall effort to boost results after a rough 2015.
Historical data suggests that part of this increase could stem from increased marketing spend. The company’s marketing and promotional expenses climbed 19% year-over-year in the first quarter of 2016 as part of this marketing effort.
Amex said in its Q1 earnings call that this adjustment in its marketing approach and incremental increases in spending has led to more card acquisitions, which indicates that this strategy will continue in the next several quarters.
The company added 2.1 million new U.S. cardholders in Q1 2016, and Amex plans to continue marketing its products to Costco cardholders before the split is finalized in June. At the same time, it plans to draw in new customers.
On top of that, Amex has been trying to enhance OptBlue, its small business payment processing option, as well as other small business initiatives. The company has a parity coverage goal with competitor networks that it wants to hit by 2019.
Therefore, Amex could try to increase worldwide acceptance and foster deals with larger merchants in the next few months. If successful, this could spur customers to user their Amex cards more often, which would boost fee revenue for the company.Amex is trying to generate forward momentum in an increasingly complex payments ecosystem. The way we pay for goods is changing rapidly, and companies such as Amex are racing […]
