American Express officials are pleased by the early returns from the Plenti coalition loyalty program, which launched earlier this year.
Several leading brands, including American Express, Macy’s, Rite Aid, AT&T, ExxonMobil, Nationwide, Hulu, and Direct Energy are part of the extraordinary new coalition loyalty program, which will allow consumers to quickly collect reward across numerous brands. Plenti is the first loyalty program of its kind to ever feature such a significant list of widely known top brands in the U.S.
US Loyalty, a division of American Express, will operate Plenti, but customers can participate in the program using any payment method they desire. US Loyalty will also handle all marketing campaigns, distribute the rewards, and oversee the collection and security of data.
“We were really pleased and excited about the launch of Plenti earlier this year,” American Express EVP/CFO Jeffrey Campbell said during Wednesday’s third-quarter earnings conference call, according to Seeking Alpha. “It’s very, very early days in the U.S. and so we’re very encouraged by the growth that we’ve seen and the number of members that Plenti has been able to attract. Several of the other partners in Plenti talked about their view of the progress and it’s all very positive. It’s still early days and we will need to see how it progresses over the next year or two before we begin to have a more material impact on the company’s financial results.”
Campbell noted that attracting new card members has been one of the biggest areas of focus for American Express related to its incremental growth initiative spending.
“In this context, we are pleased to see that these efforts drove a significant increase in new cards acquired across our U.S. consumer, small business, and corporate-issuing businesses during the current quarter,” Campbell said. “We also increased our spending on longer term technology initiatives, including efforts to enhance the digital capabilities that we provide to middle market corporations and small businesses. We believe our outlook to return to positive earnings per share growth in 2016 and within our target range of 12% to 15% in 2017 remains appropriate.”
Campbell said that billings growth, particularly in the U.S., continues to be impacted by a number of headwinds during 2015.
“On average, we are seeing lower average transaction sizes in the U.S. as opposed to card members using their American Express cards less frequently,” he explained. “In total, U.S. transactions increased 7% versus the prior year with the average transaction size was down 3%. We are clearly seeing this impact on gas spending, where for the industry average gas prices are down 25% versus the prior year.”