Membership may have its privileges, but American Express is finding out that members of the Millennial Generation do not consider feeling snooty as a privilege.
As a credit card and as a symbol of refinement by means of wealth, American Express has long been associated with the moneyed class and the jet set, and this association can be explained by the company’s marketing and branding efforts over the last few decades. Unfortunately, this marketing image seems to have backfired in relation to appealing to millennials.
A recent article in The New York Times illustrated the woes currently experienced by the legendary credit card company, which is trying its best to attract millennials, particularly those that have made their fortunes at an early age and would be eager to travel the world and spend at their leisure. It so happens that young and wealthy are more likely to leave home without Amex cards because they fear that they may be labeled as snobs.
The New York Times article explains that a competing credit card issuer held a focus group by inviting millennial professionals to dinner at an expensive restaurant. These are the kind of cardholders that Amex would drool over; however, there was a surprise at the end of the meal when the focus group participants were casually asked which credit they would use to pay for the meal. Right off the bat, a diner explained that flashing an American Express card was out of the question because it would seem as a blusterous act of braggadocio.
The other millennials in attendance at the dinner agreed that using Amex for payment would send an unwanted message, one that screams “look at me: I’m rich!” To drive the dagger even deeper and twist it, one of the dinner guests said that he would prefer to pay with a Chase Sapphire Reserve card, clearly a better choice among millennial cardholders.
What Chase has accomplished with its Sapphire Reserve product is exactly what Amex would like: capture the attention of young cardholders. The problem is that Amex is no longer considered cool; young consumers are not particularly interested in being lumped with the “one percent.” The Chase Sapphire, on the other hand, is heavily marketed on social media and offers benefits that speak to the Millennial Generation. In other words, Amex will likely need to change its image for the purpose of becoming cool again.
