Genius Marketing That To $19.6 Billion - American Express Case Study

Hi everybody, If you want to be a legendary entrepreneur, this episode is for you. because the story that I'm about to tell you today is the story of a brand that has leveraged, perhaps, the most undervalued attributes of mankind and made a billion dollars out of it. And if you learn how to use these attributes you can easily go on to outperform your competition regardless of which domain you belong to. These attributes that I'm talking about are kindness and empathy. Now, in this capitalistic world while most people might consider empathy and kindness to be intangible qualities . I gotta tell you that it's an open secret recipe that can enable you to design game changing marketing strategies in the 21st Century. To tell you about it, let me take you back to 2010 America. 

This is when the American economy was still experiencing the wrath of the 2008 recession which caused the stock market to hit rock bottom, the giant corporations to shut down, and caused millions of job losses within a fortnight. When this happened, while the entire economy was collapsing there was one company that did not just survive but also went on to make a profit of $13.4 billion during the very same times of recession. This company that I'm talking about is the giant American retailer- Walmart. And as it turns out during the two years of recession Walmart improved its profitability by $700 million year on year. Additionally, Walmart never had a return of equity of less than 20% during the same time of recession. Now, on the outside this might sound amazing but if you take a closer look at the impact of Walmart on retail America it's quite devastating. 


In fact, it has even got a term called the Walmart effect. Among the multiple studies that were conducted, it was proved time and again that every time a Walmart store opens up in a city or a town hundreds of small businesses along the radius of the store shut down within 1 year or at max 2 years. This was because Walmart bought all of its product at such high quantities that it was able to lower the price of products to such a low level that small business couldn't even come close to competing with Walmart's prices. Now, just to give you an example of the same, let's say if you have a small retail shop. You would buy notebooks from the wholesaler for ₹30/notebook, alright? And when you buy it at ₹30 , you will sell it at ₹40 in the market but at the same time Walmart would sell the same notebook at ₹28 per piece. Which means what? Walmart's selling price is lower than your cost price. And this made it impossible for small businesses to survive in the market. 

In fact, more often than not there are even protests that are held every time Walmart announces that it's going to open up a store in a town. But you know what? There was a small twist in the tale here. As it turns out another giant company stepped up and became a saviour for small businesses during the times of recession. And this company lodged a campaign that was such an amazing hit that the senate of the United States itself unanimously passed a resolution to support the initiative. And cherry on the cake, President Barack Obama himself publically supported the campaign. The question is- What is this company and how did the American president himself end up endorsing a marketing campaign. Well, the company that I'm talking about is American Express and the campaign that it launched is known the 'Small business Saturday' This was an initiative where American Express gave away $25 dollars of special credit to 100,000 credit card members wherein they could only redeem these $25 if they shopped at a small business on a Saturday, after thanksgiving. And they also gave away $100 of Facebook advertising credits to 10,000 small businesses just so that these small businesses could utilise digital marketing in order to maximise their profits. 


On top of the incentives, they also ran T.V. ads, radio ads and even social media campaigns to educate the American population about their impact on the small businesses. And you know what? Soon enough, hundreds of small business owners all across the country participated in the campaign and what followed next was nothing short of a capitalistic miracle that many considered to be impossible. Millions of Americans started walking into a small business store and rather than shopping from a Walmart they began shopping from a small business inspite of knowing that they were making a more expensive purchase as compared to Walmart. In it's second year, 'Small Business Saturday' became even more successful wherein 5,000 small businesses participated in the campaign and 103 million Americans shopped small. And soon enough the Small Business Saturday became such a social phenomenon that it generated over 2.7 million Facebook likes and became a top trend in topic on Twitter. And #SmallBusinessSaturday became so popular that even President Barack Obama tweeted his support towards the campaign. 

This is how the capitalistic America went beyond their conventions and came together as a community to spread kindness and showed empathy towards small businesses in their community. By 2012, American Express took the campaign to the next level wherein they did not just give out credit card incentives but they also provided the small business owners with social media kits, email templates and various marketing materials to help them maximise their marketing. This further maximised their sales and within just 2 years Small Business Saturday became a part of the annual American tradition wherein everybody starting from small business owners to the President himself participate in the campaign. And soon enough, it turned into a beautiful occasion with lots of happines, lots of smiles and most importantly it became an occasion of communal unity for the United States of America. 

In 2015, President Obama even documented taking his daughters to the local bookstore to promote the initiative of shopping at a small business. Fast forward to 2020, American Express estimates that 110 million people participated in the Small Business Saturday and sales hit a record high with an estimated $19.6 billion in spending and all of this money helped keep small businesses alive even during COVID-19 recession. This is how a bank like American Express was able to use empathy and kindness to make an economic miracle come true even during the toughest times of American history. 

Now, there are 3 very important lessons that we need to learn from this case study while we execute these ideas to our domain. Lesson 1, identifying the pain and the interest of the audience is always the key to unlocking extraordinary business ideas. In this case, American Express identified the pain of the shoppers and used its service to give them a $25 credit just so that it could motivate the shoppers to shop from a small business. Therefore, the interest of the shoppers has been addressed, at the same time it has also catered to the pain of small business owners. 

Lesson 2, in the 21st Century participatory campaigns will always turn out to be more powerful than even an award winning advertisement. Why? because the new age of marketing is moving from impressions to expressions. So, more than a T.V. ad it is the participation of the customers that is going to create more impact. In this case, because American Express gave out email templates and social media kits the shopkeepers automatically became the local ambassadors who participated in the campaign which eventually led to a chain reaction and got millions of shoppers on board too. This is what we call as participatory marketing campaign.

 And last and most importantly, always remember that empathy and compassion are the most undervalued attributes of this capitalistic world and very few people know that these are two of those qualities that are so powerful that they can turn a commoner into a king. In this case, they were powerful enough to give rise to a capitalistic miracle that America will cherish forever.

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