Not long ago I gave a speech about how much companies can afford to invest in creating customer promoters. I ended the talk by stressing how important it is to understand who the target customers are and what their loyalty is worth. Afterwards, an industrial sales manager came up to the stage and described his recent experience with American Express--a company I often cite in my talks as a loyalty leader, since its NPS is the highest in the credit-card industry.
This executive had arranged a wedding rehearsal dinner for his son. He chose a restaurant in Philadelphia where he had done quite a bit of corporate entertaining and had come to know the manager. He had always used his American Express card for these business functions, and the year-end statement reminded him that he was a very good customer for that eatery, spending well over $10,000 there in the past year.
The dinner was a big success, and all the guests enjoyed themselves. The host signed the bill at the end of the evening without paying close attention. But at the end of the month, he studied it in detail and concluded that the bar portion of the bill (about $450) was excessive. When he reviewed the number of drinks supposedly consumed by his small party, he concluded that the total was mathematically impossible. Someone had padded the bar bill.
When he raised the issue with the restaurant, he was chagrined to find that despite his loyal patronage over the years, the manager refused to adjust the bill. So he resolved never to patronize this restaurant again. But he also reported the restaurant to American Express, thinking that the company might help him negotiate a settlement. To his surprise, the American Express representative who answered his call was sympathetic but did not offer to negotiate with the restaurant. Instead, she quickly checked his historical spending pattern with American Express (while he was on the phone), then asked him what he thought the correct amount of the bar bill should be. He told her $250--and she refunded the difference to his account on the spot!
Clearly, American Express can't afford to give away money to every unhappy cardholder, even in cases when its own failure is the root cause of disappointment, let alone when the culprit is the behavior of a merchant partner. Yet by identifying its target customers and understanding the value of turning them into promoters, the company was able to delight this particular customer. The result: he not only resolved to consolidate all of his personal and business spending with American Express, he retells this story as often as he can. That is the kind of advertising that builds a great brand--and it would probably make the phone rep feel pretty good about her job as well.