Q: As a global company, how do you look at different markets around the world?
First of all we are in a somewhat enviable position, because our brand means fundamentally the same thing everywhere in the world. This brand is about trust and premium service whether you are in Asia, Europe, Latin America, or North America. That's a great starting point.
Now there are things that become more pronounced from one market to another. Certain markets are more conducive to the idea of membership, for example. There are markets where revolving credit fits with the way that people think about managing money and their lives, and other markets where it doesn’t. Products change in individual markets to serve needs, but what American Express has come to stand for is a global company far transcending the "American" in its name.
The company started in 1850 as an express company. We went from that to the travelers check business towards the latter part of the 1800s, then into the travel business, then into the card business, and then really from the card business into being a payments company.
All of those evolutions have had the focus on service, the focus on relationship, and the focus on the promise to pay. So it's really been a great case study for enduring. Of the 100 top companies in the year 2000, only 15 existed in 1900. That’s because many companies didn't reinvent themselves. They didn't stay relevant. You have to do that. But you have to keep the basic DNA of the company intact, or you lose the essence of the brand. And that's why, though the products American Express offers have changed fairly radically, the ethos of trust has remained.
Q: Could you talk about the economic crisis and how American Express distinguishes itself at a time when financial services are not being looked upon well by the public?
I think it's always important to do a couple of things: First, understand how consumers see you. While our industry has gone through radical change during the past 18 to 24 months, we've measured our brand very carefully during this period. We find a lot of stability for the American Express brand. And that's somewhat remarkable in light of all of the change that's taken place in people's mindsets regarding financial services.
The second thing you must do is understand your assets. During some of the most challenging hours of the financial crisis, we defined a group of key assets, the first being our customer base. We have an affluent group of customers who feel a strong sense of relationship with us. We have issued nearly 100 million cards worldwide.
Our second asset is our merchant network. Merchants around the world accept this card, welcome the card, welcome the payment services that we create, and feel a partnership with us. That's critical.
Third, we look at the data exhaust that the first two throw off — that produces so much useful information for understanding how these buyers are working with these sellers, how they come together, and how value is created.
And, finally, we have the American Express brand, a globally familiar brand that evokes trust and an expectation of premium service. Put those four things together, wow! As bleak as it seemed in the middle of a liquidity crisis, our employees could say "We've got a lot to work with here!" It really helps to generate new ideas, new solutions, and a sense of optimism among our own people to say, "We wouldn't change places with anybody."
Q: What are you seeing in terms of consumer trends at American Express?
Clearly, one of the most important trends that we've seen in marketing is this move from monologue to dialog. The expectation among consumers now is that they will be listened to.
I'm finding that to be an interesting tension point for marketers. If you are going to enter a conversation, you no longer get to control everything. The consumer may say something on a website, or do a YouTube video, and we don't have full control over that. Yet even in this open environment, as the marketer, you are still 100% responsible for the result. That created a lot of fear and anxiety at first. You want to say, "Well, that's not fair." Fair or not, it's reality.
Twenty years ago, we were in control, or thought we were. Today we know we're not, but we're still accountable. It's getting to a point of greater acceptance — not that the anxiety went away entirely, but there is more acceptance. When you start to look at it that way, it starts to provoke some interesting conversations, interesting thought processes, new ways of working that help people deal with the new reality.
A key functional change coming out of this is listening. We have to teach the organization how to listen, and then enable our employees to respond. You have to have the ability to understand what the consumer is saying and then act on it. The act on it part is what demonstrates listening, not just the listening itself. Done well, I think listening could be one of the most productive ways of engaging consumers, and therefore, selling.
I also see some micro-trends. People are very taken with the social media space, as we should be. It's new, it's interesting, and it’s exciting. But I think it's still too early in the game to draw firm conclusions about what it means to us. For example, a lot of people are amazed by the amount of information people — particularly certain age demographics — will offer in the social media space. I'm not sure we've seen the end of that cycle; I think as marketers begin to more aggressively use that information, we may see some behavior modification on the part of consumers because most of that sharing has taken place with the expectation that it is being shared with peers, friends, associates, not necessarily marketers.
The etiquette in the social space is still being formed, and I think understanding the etiquette, and acting within it, is an important part of a brand's gestation and growth in that space. I also think it's healthy as a marketer to question whether or not the trends we've seen will hold up over the longer term.
Q: How has the role of the CMO changed?
When I started in the marketing business, back in the 1970s, I think many companies were moving faster than the consumer. Consumers were trying to figure out what a microwave oven could do for them. They were trying to figure out how to set the clock on their VCR. People were stumped by things like that. Today, people accept new ideas and new technologies faster than ever before. So it may have taken 10 or 15 years to get people to adapt to a microwave. They're adapting to iPods, which have just as much of a learning curve, in months. So now I think that the pace at which consumers are changing is much faster than corporations are, in most cases, and I think we have a challenge in corporate America to make sure we're catching up.
Marketing, many years ago, felt more transactional. I would put a message out there on television, millions of people would see it overnight, and I would expect some kind of a change in behavior or mindset. Consumers used to believe in authority, so if you offered "the finest coffee money can buy," people said, "hmm, must be the best." Today, you say "the finest coffee money can buy," and people say "I'll be the judge of that.” Or “I'll ask my friends what they think of it."
We've seen a complete change in terms of people's mindset related to authority. You can't think the world is waiting at the edge of their seats for your message. You really need to earn your way there. You have to demonstrate your value. And I think that you also need to show a great deal of respect. Especially because, for American Express, the sale is never final. We have to build a relationship with you in order to get the behavior that makes you an extremely valuable customer. And so we have to approach you in a way that is a building process.
And today, the world is much more segmented. It's much more diverse. People are coming at things from very different angles. You could argue that, years ago, we were kind of a one-size-fits-all company. We had this green charge card. Today we've launched all these products because we recognized that this is a diverse world with diverse needs and diverse desires, and you are going to have to service these people very differently if you want to create value for all of them. So it's gotten more complex, and much more interesting.
The marketing world is changing so fast that you really need to know the rules and how to break the rules to find the opportunities before someone else does. Media companies are willing to work with you in ways that they never would have before. But you have to be imaginative enough to come up with ways to make that work. Marketing is less formulaic. It's more fluid, and requires a lot more creativity and thinking not only about the message but about how the message gets served to people and how they might be consuming it.
Some marketers have embraced the notion that consumers would like to create their own communications on your behalf. I haven't seen that become a reality. Lots of companies said "YouTube us your commercial, and we'll take the best one." I don't think consumers want to create commercials. I don't think they want to create marketing, either. But they do want to collaborate in the process of the conversation. That has been a learning process for everybody. My own behaviors as a consumer are changing every day, so I defy anybody to be the expert on how it all works today.
Q: As a global company, how do you look at different markets around the world?