American Express is out to bring younger customers on board through Foursquare. Foursquare is a social networking start-up that utilizes computers and phones with global positioning technology to let others keep tabs on where they are. Foursquare rewards users for checking into their favorite places. The locations must be participating with Foursquare in order to count. The more often a customer “checks in,” the more rewards they get.
Foursquare is an ideal place for AmEx to gain new customers and keep up with advancing technology. “The credit card company has to keep up with the times,” says one Foursquare user and rightfully so. In today’s competitive business world, you have to find a way to stand out from the crowd.
With more young people obtaining credit cards, AmEx is in a race with other credit card companies to gain loyalty from those who are already tech savvy. That’s because this demographic is spending more money online these days. Last year, AmEx recognized that because over $100 billion is being spent online, they need to find new ways to encourage younger customers to use their card instead of a competitors’ like Discover or Capital One.
The Wall Street Journal noted that online sales are increasing at 20% as opposed to 15%, which is the rate for all other types of purchases. With numbers like this, is it any wonder that AmEx is willing to take the plunge with the lesser known social network.
Foursquare has tried to partner with other credit card companies before to no avail. They may have needed to mature a little before a major credit card company could take them seriously. Perhaps trying a test run with one another will help AmEx and Foursquare see how this setup could work out to their advantage. Both companies are hoping to benefit from new customer loyalties and profit from the venture.
AmEx and Foursquare will make their debut in Austin, Texas, March 11-20, 2011, at the South by Southwest Interactive Festival. The goal is to eventually go nationwide after a test run of the partnership. Together, they could reel in a younger crowd that is enamored with technology and willing to be loyal customers for a lifetime.
