Case study: American Express

The story
American Express is one of the world’s leading payments, travel and card-issuing companies, with a 160-year heritage.

As the battle for customer loyalty in the card industry became increasingly fierce, Amex recognised that its core competitive advantage had to be something that would be difficult to replicate: superior everyday customer service.

The challenge
When Jim Bush, a company veteran of 24 years, assumed leadership of the Amex World Service organisation in 2005, he became concerned that the company was focusing too much on managing service as a cost centre – rather than as an opportunity to build customer relationships.

The response
Mr Bush and his team knew they needed to reinvent Amex’s approach to service.

So starting in the US and expanding globally, Amex shed its traditional call-centre approach, which included monitoring whether customer care professionals (CCPs) adhered to a script. Instead it focused on whether customers would recommend Amex to their friends based on each interaction they had with the company. It also took its CCPs off the clock – letting the customer decide how long to spend on each call.

Amex can now link a customer’s satisfaction with a specific call to the CCP who took that call. It provides constant feedback so each CCP can improve.

To transform calls from basic transactions into opportunities to build relationships, Amex also developed “Relationship Care”, a service ethos based on the idea that the company’s most powerful loyalty-builders are the thousands of CCPs who speak with customers daily.

Amex now selects, trains and incentivises staff to get customers more engaged, creating an emotional connection and discussing the ways customers can benefit from their relationship with Amex.

To cultivate Relationship Care, Amex focused on its employees. It improved talent management and work/life balance – from flexible scheduling and a more robust career development path to additional benefits such as on-site health screening. It also changed the compensation structure, connecting a portion of incentive pay to customer feedback.

Company policies were improved to help CCPs better assist customers. This was a cultural transformation that required a new approach to managing information technology. Amex invested in new technology to enable CCPs to personalise every conversation with recommendations for each individual customer.

For example, an improved database for Amex CCPs could indicate that a customer had an Amex card but was using it only to make retail purchases. The system would prompt the CCP to explain to the cardholder how they could accumulate extra reward points if they also used their card for travel or at restaurants.

The results
Customers increased their spending on Amex products by approximately 8-10 per cent as CCPs reinforced product benefits through Relationship Care. Customer satisfaction improved substantially too.

Amex also saw its CCPs become more efficient: they were able to reduce the average time of a call because they resolved issues more effectively. Service margins widened as a result.

Key lessons
Customer service is not just a cost centre. By focusing on delivering better service, companies can achieve greater customer loyalty and improved profits.

Customer service starts with the people who deliver it. Amex focused on its front-line employees to ensure they had the right training and compensation.

IT is only a means to an end. Amex designed its technology to balance efficiency with flexibility in order to meet varying customer needs and build relationships.
- Financial Times, 18 May 2011