Case Study - Valuable Insights In Promotion

Trade Promotion: American Express' Destination-Marketing Programs Increase Sales, Sign-Ups And Community Standing.

American Express Co. attributes much of the success of its gift-with- purchase programs to having products with graphics customised to the specific markets in which the items were offered.

American Express (AMEX) cardholders received more than 14,000 imprinted T-shirts and totebags as part of the destination-marketing programs it ran in its Eastern region, which encompasses New England, New York, New Jersey and Pennsylvania.

The products were offered as premiums for cardholders who charged a certain dollar volume of purchases on their AMEX cards while staying in the designated destinations of Bucks County, Pennsylvania; Cape Cod, Massachusetts; the Maine coast and New York's Hamptons.

The particular destinations were chosen for the promotion based on research AMEX conducted, said Tammy Kien, senior marketing manager. "A lot of it is based on where our card members travel and where there is a high concentration of our merchants." AMEX' field sales reps also had input into what locations they thought would be best suited for promotions.

Once the company selected its destination sites, its objective was to improve and continue card member and merchant satisfaction at those sites, Kien said. The programs accomplished this by encouraging people to make purchases at places that accept AMEX.

AMEX also helped persuade cardholders by offering them a gift as thank-you for using their cards. Another more basic objective of the promotion was to get more business. "We're always working to increase the coverage that we have on the card, to get more merchants to sign up," Kien said.

The objectives were achieved through a variety of marketing strategies that included print and radio advertisements, as well as customised point-of-purchase materials in the form of decals and table tents that AMEX merchants were given to display at their businesses.

The materials promoted the program and also featured pictures of the gifts card members could receive. "It was a really blanketed marketing approach," Kien said.

In the Hamptons, the promotion ran from June through mid-September and offered card members a canvas drawstring tote bag imprinted with a graphic of a beach chair on a beach and the words "The Hamptons," along with the AMEX logo and slogan.

Card members who charged $150 or more could receive the bag at area chambers of commerce by bringing in their sales receipts, or they could mail their receipts to AMEX and receive the bag in the mail.

Cardholders who visited Bucks County, Cape Cod or the Maine coast between July 1 and mid-September were offered souvenir T-shirts for their charges of $75 or more. Here again, the shirts could be picked up at local chambers of commerce or through the mail.

This was the first time AMEX attempted local redemption, and it found it to be successful. "This created incredible word-of-mouth advertising," Kien said. "With the T-shirt or the bag people would see people walking around with them and ask 'where did you get that?'"

Local redemptions also cemented AMEX' standing in the various communities, because it got cardholders into the chambers of commerce where representatives could talk to them and pass on their own promotional materials. "It showed an added degree of commitment for the program overall in the market," Kien said.

But the shirts themselves also showed a commitment to the market. "Everything on the T-shirts was reflective of what you'd see in the market," Kien said. A covered bridge was featured on the Bucks County shirt, while the Cape Cod shirt was imprinted with a lighthouse and the Maine shirt featured a lobster trap.

People wanted the shirts because they were actually souvenirs of the places they had visited. "We had some card members call and adamantly request more," Kien said -- a good indication of how sought-after the shirts were.

AMEX also ran similar promotions in Mystic, Connecticut; Martha's Vineyard, Massachusetts and Newport, Rhode Island. These, however, were cause-related rather than involving gifts with purchase.

In Mystic the company donated $25 to preserve the Long Island Sound for each merchant who signed up to accept the card between June 16 and October 1. It also donated five cents to the campaign each time an AMEX purchase was made in the area. This resulted in 107 new merchant signings and donations of over $10,000.

Newport's cause was preserving Narragansett Bay, and again AMEX donated $25 for each merchant signing on between June 20 and October 1, and contributed three cents every time a card member made a purchase in Newport. Both strategies netted over $5,000 in donations.

To help maintain quality medical care on Martha's Vineyard, AMEX donated $75 to the island's Hospital Foundation for each area merchant signing up, and seven cents from each purchase made with the card during the June-October period. This resulted in over $10,000 in donations.

"We had some key new signings in a number of different markets," Kien said. "In some of these markets, there were merchants that were reluctant to sign up. These programs helped get them over the hurdle."

Overall, Kien believes the programs were successful. Merchant signings were up, charges were up, relationships were built with local communities and card members and merchants were pleased with the promotions. All of this, she noted, is being taken into account as she plans the firm's future programs.