Dear Amex, are you on glue???

[Scott]

JDB wrote:

,,, only having a two year gap before they shower you with points as a ‘new’ customer is absurd.
/quote]

IIRC correctly you’ve posted before that you’re a Nationwide customer? Just checked the T&Cs for their £200 switching offer: “offer is only valid on the first…account you have switched to us since 18 August 2021 “, so 2 years.

TSB is 1st Oct 2022, so 1 year.

Lloyds/HSBC Apr 2020, so just over 3 years.

It looks to me like Amex’s 2 years is fairly average in the financial world.

[JDB]

@Scott – yes, that’s fair on the temporality but current account switching bonuses are on a totally different scale given the upping of the ante on SUBs – this year we have seen £600-700 on BAPP, £600 + £200 travel credit on Plat and £250 on PRG. Two of these are also eligible for referral bonuses. That’s a huge cost that is effectively borne by Amex cardholders, not the company. If they want to use these inducements to attract genuinely new customers, that’s absolutely fine, but to keep giving it to the same players is what is absurd. People complain that there currently aren’t so many good offers, well that they save on wasted customer acquisition cost could better be reinvested there to the benefit of non churning cardholders.

[SteveJ]

JDB wrote:

That’s a huge cost that is effectively borne by Amex cardholders, not the company.

It’s a bit of a leap to presume that should the SUBs not be as generous/lenient that existing customers would get more.

[JDB]

SteveJ wrote:

JDB wrote:

That’s a huge cost that is effectively borne by Amex cardholders, not the company.

It’s a bit of a leap to presume that should the SUBs not be as generous/lenient that existing customers would get more.

I actually said the money saved “could be better reinvested” rather than presuming it would be, but I think the issue is that there is currently an imbalance between the benefits offered to churners or players vs long term cardholders and I believe they would do more if they weren’t squandering money on these ludicrous acquisition/retention costs.

Amex will always look to protect its margins so there is effectively a finite pot out of which people want it all – tip top systems and customer service, retentions, huge SUBs with short breaks, very generous cardholder offers that suit them, low annual fees, more benefits etc.etc. Well, that’s not all going to happen, but if they looked after existing customers better, some of the rest might not be necessary. I think the situation with Platinum really says it all – they pay you to take out the card in the first place and then pay you again in year 2. It’s totally ridiculous – why not fix the product so that enough people are happy to pay the appropriate price. I would be very happy to pay £575 if the card had any sort of USP, but it doesn’t and the benefits it does offer only appeal to an incredibly narrow range of people, hence the huge inducements required.

[Luca M]

BBbetter wrote:

“I haven’t spent 5k on it since May! ”

Isn’t that the whole purpose of the offer? To make you spend? The entitlement of some of the users here… ‘I haven’t spent much, so Amex must give me free avios!’

I have received the same offer and would probably spend £5k on average every 2.5 months and immediately thought about the 3 months given to spend £6k and earn 75,000MR of a recent Platinum sign up bonus… now they are giving about a month to spend £5k and get only 2500 Avios

[JDB]

Luca M wrote:

BBbetter wrote:

“I haven’t spent 5k on it since May! ”

Isn’t that the whole purpose of the offer? To make you spend? The entitlement of some of the users here… ‘I haven’t spent much, so Amex must give me free avios!’

I have received the same offer and would probably spend £5k on average every 2.5 months and immediately thought about the 3 months given to spend £6k and earn 75,000MR of a recent Platinum sign up bonus… now they are giving about a month to spend £5k and get only 2500 Avios

I’m afraid Amex has, more than ever, spunked the budget on the SUBs and retentions, so there’s only 2,500 Avios left (and only for the first 100,000). With today’s news, it all looks seriously shambolic round at Amex.

[Carlos]

JDB wrote:

Luca M wrote:

BBbetter wrote:

“I haven’t spent 5k on it since May! ”

Isn’t that the whole purpose of the offer? To make you spend? The entitlement of some of the users here… ‘I haven’t spent much, so Amex must give me free avios!’

I have received the same offer and would probably spend £5k on average every 2.5 months and immediately thought about the 3 months given to spend £6k and earn 75,000MR of a recent Platinum sign up bonus… now they are giving about a month to spend £5k and get only 2500 Avios

I’m afraid Amex has, more than ever, spunked the budget on the SUBs and retentions, so there’s only 2,500 Avios left (and only for the first 100,000). With today’s news, it all looks seriously shambolic round at Amex.

100,000 is alot of avios that amex have put aside for this offer, nonetheless.
That equates to 250 million avios
if that costs 1p each thats £2.5m

[Cranzle]

I’m afraid Amex has, more than ever, spunked the budget on the SUBs and retentions, so there’s only 2,500 Avios left (and only for the first 100,000). With today’s news, it all looks seriously shambolic round at Amex.

Are things really as bad as portrayed? It’s hardly fair to compare the retention deals and promotions of The Platinum Card with the cobranded BAPP card.

For The Platinum Card, whilst you have a valid point that insurance does need modernising, the products isn’t really a shambles. Over the last 2-3 years, there have been numerous improvements to the product including Amex retailer statement credit offers, UK dining credits, international dining credits, international shopping offers, the Harvey Nichols offer and I’m sure many more. It’s always been a product focussed on travellers and I think they’ve implemented a lot of new offerings. There’s always room for improvement, but it’s hardly a shambles and I doubt very much they are losing customers overall. I do agree the earning rate should be at least match the PRG. The number of hotel offers available with Amex is also very generous (whether they are funded by Amex or not, you can’t get that many offers anywhere else).

A lot of focus seems to be on the fact that they offer retention bonuses. Frankly, who cares? There has been progressive new offerings, and I welcome them. Compared to any other card or ‘subscription’, it’s the best.

[tbtb31]

The real Swiss Tony wrote:

So just had an offer of an extra 2500 avios if I spend 5k on my bapp by the start of November.

I haven’t spent 5k on it since May! This just seems like a pitiful excuse of an offer!

/end rant

Understood – drama – luckily it’s a free world – try Visa and Mastercard, safe journey!

And just say no to drugs.

[JDB]

@Cranzle in simple terms if the Plat offering is so marvellous, why does Amex have to pay people to take it off their hands? How many manufacturers pay people to buy their products. It’s not as if they give it away as a loss leader because they will earn other fees as it’s such an unattractive card to use with its low MR earning and high FX fees, so not really designed for the international traveller as they claim. The ‘inferior’ Gold card earns much more. What’s the point of the dining credits? They just hand back some of your fee but force you to eat in a limited range of places, many of which are rather substandard; it’s utterly pointless. Thanks, but I’m better at choosing restaurants than Amex is. FHR is an entirely illusory benefit. The travel insurance excludes over 1/3 of the population, has a wholly inadequate ‘travel inconvenience’ section and doesn’t cover you for public liability, amongst other problems.

Yes, it’s well known I don’t like the concept of retentions because I believe passionately in fairness and most people don’t know they exist so the lack of transparency bothers me and b) if the product were right you wouldn’t need secret retentions. It’s a bit like spraying air freshener to cover a chronic smell. Just fix the underlying problem.

I also bang on about it in the very vague hope someone at Amex might one day listen. That’s a major Amex UK problem – they have become increasingly arrogant and don’t listen to cardholders. The shambolic handling of the pro-rata refunds and the communication surrounding it is symptomatic of much greater management issues.

[TooPoorToBeHere]

Carlos wrote:

100,000 is alot of avios that amex have put aside for this offer, nonetheless.
That equates to 250 million avios
if that costs 1p each thats £2.5m

£5k spend earns them say £50 in fees

2500 Avios is “typically valued” on here at £25

It would be most fascinating to learn what card companies pay for Avios, but given that many are redeemed in poor-value ways or left to expire unused, I would be stunned if it’s more than 0.7p.

[NorthernLass]

@JDB, I fear a millennial has taken over your HFP account. That’s 3 vulgarities in the past few days!

[SteveJ]

JDB wrote:

SteveJ wrote:

JDB wrote:

That’s a huge cost that is effectively borne by Amex cardholders, not the company.

It’s a bit of a leap to presume that should the SUBs not be as generous/lenient that existing customers would get more.

I actually said the money saved “could be better reinvested” rather than presuming it would be, but I think the issue is that there is currently an imbalance between the benefits offered to churners or players vs long term cardholders and I believe they would do more if they weren’t squandering money on these ludicrous acquisition/retention costs.

Amex will always look to protect its margins so there is effectively a finite pot out of which people want it all – tip top systems and customer service, retentions, huge SUBs with short breaks, very generous cardholder offers that suit them, low annual fees, more benefits etc.etc. Well, that’s not all going to happen, but if they looked after existing customers better, some of the rest might not be necessary. I think the situation with Platinum really says it all – they pay you to take out the card in the first place and then pay you again in year 2. It’s totally ridiculous – why not fix the product so that enough people are happy to pay the appropriate price. I would be very happy to pay £575 if the card had any sort of USP, but it doesn’t and the benefits it does offer only appeal to an incredibly narrow range of people, hence the huge inducements required.

Be careful what you wish for. I actually feel what we’re finding out today is that the churners and chancers still earn Amex enough in card transaction fees and annual fees for them to be a worthwhile addition to the customer (read revenue and margins) base for Amex. If all the fly by night Amex holders dropped theirs cards due to more stringent SUBS or retentions I personally feel other customers will suffer as overall those less loyal customers are still profitable for Amex, as they incur significant sunk costs which increasingly rely upon the volume game that Amex UK has become to spread those as thinly as possible.

[BA Flyer IHG Stayer]

One way to limit the churners and fake retainers would be to pay out their points on a phased basis.

So to keep your retention bonus in full you need to keep the card for a whole year.

Easy enough to just give you a couple of thousand a month with a large balance 11 months later.

[JDB]

@SteveJ – the setup in the US is very different but these people aren’t providing the net revenues or margins in the UK. What they do provide is these magic new customer acquisition and retention figures that are totally essential to the Amex investor proposition. The problem is that the cost of this illusion has skyrocketed, UK billings are down and bad debts are accelerating. The customer proposition that works very well in the US doesn’t work here. In the US, unlike the UK, the Plat is now so popular that they can’t deliver the benefits like lounges, so they are going to have to remove some of its benefits by introducing (as planned pre covid) the new card between Plat and Centurion. The UK strategy of pandering to the churners (unlike the US once in a lifetime, even if that means seven years or so) has not been a success, pissed off the very boring customer like me and opened the way for Barclaycard.

What’s so extraordinary in the UK is that Amex is constantly bidding against itself. There’s no Chase or Bank of America selling very similar airline cards. There’s no real comparable to Plat but they chuck seriously big sums of money at it as if there were a competitor. Barclays has Avios cards but they don’t look even remotely like Plat or Gold any more than Virgin or HSBC cards do. None of them pay these daft retentions or SUBs partly because they don’t believe they are allowed to, but principally because the product is what it is and survives on its own merits not huge inducements. There has been a huge amount of change at Amex and hopefully at lot more to come such that they will work once again for the ordinary target punter.

[SteveJ]

@JDB TBH Barclays and Barclaycard had some pretty daft SUBS only this year. Everyone else mentioned credit cards is just part of a wider portfolio, Amex are unique in that credit cards are the only game they are in, hence new customer generation and churn protection are crucial metrics.

[JDB]

SteveJ wrote:

@JDB TBH Barclays and Barclaycard had some pretty daft SUBS only this year. Everyone else mentioned credit cards is just part of a wider portfolio, Amex are unique in that credit cards are the only game they are in, hence new customer generation and churn protection are crucial metrics.

Barclays was a new market entrant in the premium paid market so they had to make a big noise and they will have gained at least some cross selling from the 100k promo which I doubt is an offer we will see very often. They are quite sparing with the 50k.

The point I was making is that Amex very often isn’t actually generating new customers but rather encouraging old customers to go away for two years only to say they are then ‘new’ customers. They allow you to downgrade or upgrade and that = a ‘new’ customer. Well, for most of us neither of those aren’t is a new customer, they are just people you have paid to turn up to the party; it’s costly and totally fake.

You shouldn’t need “churn protection” if the product is good and there is, in the UK, no competitor to the Big Three Amex cards.

[Peter K]

I feel JDB is missing something crucial here. I’ve read his points for a while and couldn’t put my finger on the underlying reason why he’s wrong with Amex’s business model. Maybe this is what it is:

Amex needs to remain relevant. Not just to card holders but, more importantly in some ways, to retailers. That’s one reason why they do shop small…to convince smaller retailers that it’s worth accepting amex.
Those chasing SUBs put large amounts through their cards, increasing/inflating amex use in the economy to a large extent, so helping amex convince retailers decide it’s worth accepting them.

Basically, it’s amex Manufacturing Spend. So what if the SUBs don’t allow them to make (much) money *on those cards*. The spend pushed through keeps the door open to make money from the spend of loyal ones like JDB who keep the same card long term.

[zapato1060]

I would presume that 98% of Amex owners don’t know what a retention offer is. Within these walls there are hardcore who make up the remaining %. I read on another forum someone who let 28k Avios expire. This is the real user.

[JDB]

@Peter K – yes, you are correct that Amex is sort of indulging in MS which, apart from the unfairness towards the majority of customers, is actually what my issue is! However, it’s not ‘spend’ per se they are artificially creating, it’s customer numbers. The spend is actually fairly immaterial or often loss making. To the man on the Clapham omnibus a customer that comes back to you every two years isn’t really a ‘new’ customer each time. The customer who downgrades from one card to another isn’t really a new customer, but it is in their world. A customer paid a £500 no strings attached inducement is a ‘retained’ customer etc. For many people that’s fake but….

[Angelamc11]

I want to add my thoughts on FHR as an illusory benefit. Each time I consider cancelling my Plat card, it’s this benefit pulls me back.

Several occasions I have booked FHR and stack this with an Amex cashback offer on one of the main brands. Even better if the chain has a points/night promo also happening.

We have had stays work out with incredible value when calculating FHR $100 or $150 credit, with £100/£150 Amex cashback. Some hotels such as Barcelona Edition ran an additional promotion last year of an extra £150 credit. We found ourselves paying £100 cash (after cashback) for a stay with £225 credit plus the points accrued on that stay. While this isn’t typical, with enough research you can find some incredible value when stacking offers.

To my husbands surprise, I will say we need to spend xxx by tomorrow and convince him to order the most expensive food/drinks and room service, or take spa treatments. I am usually more of a careful budgeter. These types of spend challenges are almost like a game and amuse me and him to no end.

[Scott]

@JDB

Re: “What they do provide is these magic new customer acquisition and retention figures that are totally essential to the Amex investor proposition”

If Amex are so keen on attracting ‘new’ customers, this form of ‘MS’ as you describe it, why did they massively increase the qualifying period from 6 to 24 months? This must have had a substantial negative effect on their acquisitions.

[BBbetter]

TooPoorToBeHere wrote:

£5k spend earns them say £50 in fees

2500 Avios is “typically valued” on here at £25

It would be most fascinating to learn what card companies pay for Avios, but given that many are redeemed in poor-value ways or left to expire unused, I would be stunned if it’s more than 0.7p.

£5k doesn’t earn Amex £50. Less than £25.

[Super Secret Stuff]

BBbetter wrote:

TooPoorToBeHere wrote:

£5k spend earns them say £50 in fees

2500 Avios is “typically valued” on here at £25

It would be most fascinating to learn what card companies pay for Avios, but given that many are redeemed in poor-value ways or left to expire unused, I would be stunned if it’s more than 0.7p.

£5k doesn’t earn Amex £50. Less than £25.

If the total fee charged to the merchant between the interchange fee, bank fee etc. is 2%, which seems modest to me, they’d earn £100

[Carlos]

TooPoorToBeHere wrote:

It would be most fascinating to learn what card companies pay for Avios, but given that many are redeemed in poor-value ways or left to expire unused, I would be stunned if it’s more than 0.7p.

that is still £1.75m set aside for this offer and this is the poorest offer around at the moment