American Express today announced, arguably, the most significant overhaul of its flagship Platinum charge card since it was launched in 1984. The move follows last fall’s headline grabbing launch by fierce rival, Chase, of its Sapphire Reserve Card, a premium credit card which has reportedly gone “viral” among Millennials and represents a direct play for Amex’s Platinum cardmembers who are the bedrock of the Amex brand. Uber and Millennials As predicted in my blog last September, Amex had to respond or risk losing customers to Chase. Today, it made its boldest move yet by announcing its partnership with Uber to target Millennials. Other new benefits are noteworthy such as the new Global Dining Collection and the metal card design, but it is the partnership with Uber to offer $200 in Uber credits annually plus VIP status that sends the clearest signal that the gloves are off and Amex is not going to roll over and allow Millennial consumers – its next generation of cardmembers – to go to Chase or anyone else. Millennials were quick to adopt ride sharing services (like Uber) as a viable method of transportation and are using it at a greater frequency than other generational groups according to Mintel’s Ridesharing and Alternative Transportation US 2017 report. The Amex Platinum-Uber benefit will appeal particularly to older millennials (aged 31-40) who are the heaviest users of ridesharing and use the services multiple times per week. Justifying the Higher Fee One theory posited for the popularity of the Chase Sapphire Reserve Credit Card among Millennials, despite its $450 annual fee, was that it could be rationalized as value for money in a way that hadn’t been seen before in the premium card segment. The reinvented Amex Platinum card is more aligned with this “premium-value” trend than before given that it is loaded with new features and benefits that effectively reduce the annual fee; however, the fact that Amex has raised the fee to $550 from $450 confirms that it still believes that the Amex brand is a major differentiator in the market that justifies a higher price than the competition. Amex will give existing customers a grace period before they charge the higher annual fee which comes into effect on renewal dates after September 1, 2017. For frequent Uber users the higher fee shouldn’t be a problem but it is a risky strategy for those that don’t use (or don’t often use) the ridesharing service. What we think Partnering with Uber in this way is a bold and smart move that will resonate with Millennials. Raising the annual fee is potentially risky but also makes Amex stand apart from the pack as the ultimate aspirational premium card and the lack of long term revenue opportunities such as cross-selling mortgages or investment services means Amex is more reliant on the annual fee than its competitors. The marketing challenge is how to successfully convey both the rational and emotional benefits of the card to justify a higher fee in the market, particularly when targeting Millennials seeking value for money. Andrew Davidson is SVP/Chief Insights Officer for Mintel Comperemedia. He is an expert in data-driven cross channel marketing intelligence, consumer behavior and global trends. As a thought leader and expert speaker, Andrew has consistently predicted the evolution of payments marketing for the past 23 years. He speaks at high profile industry events and has presented at conferences in the US, Canada, Australia, New Zealand, Hong Kong and Taiwan. Andrew is passionate about the global role of payments as the first step on the path to financial inclusion. You might also be interested in: No related posts.