American Express strikes out

By | June 27th, 1996

Everyone makes mistakes. Even American Express, the industry’s undisputed heavy hitter, has been known to strike out every now and then.

The Thomas Cook acquisition is one recent example of a bad play. Not initially, when the “suits” promised a “win-win” deal, but later, after it became painfully clear that there was no room for many Thomas Cook employees on the winning team.

American Express effectively downsized the value of newly acquired Thomas Cook when it allowed key account managers to leave the corporate marriage. The managers had developed closer ties to their customers than anyone suspected, and when they ditched Amex for another mega-agency, so did their clients.

This is hardly a new or particularly insightful revelation, although if you rely on the travel trade press for your news, you may have missed it. But it got me wondering if American Express was about to make another expensive mistake, this time with interactive travel products.

The company’s two key interactive platforms – ExpressNet on America Online and a Web travel site – have been well received. There’s nothing inherently wrong with the sites, and by most measures they’ve performed their designed functions effectively.

Still, something seems strange. What does Amex want from interactivity? What does it expect? And why do people get the feeling that when, it comes to interactive travel, they’re not dealing with the same corporation that vanquished Thomas Cook?

“We see interactivity as another channel to distribute our products,” says Mike Mulligan, senior vice president and general manager for interactive travel. “It remains to be seen which of the channels proves to be more effective.”

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Ah, the old “wait and see” approach. This from a company that, in the finest tradition of corporate America, takes no prisoners and isn’t exactly known for its patience. I’m not the only one surprised by goings-on at the company’s office at the World Financial Center. Several consultants have noticed that Amex takes a different management approach with interactive travel than it does otherwise. One industry watcher described it as “laissez faire.”

“We’re thinking of our interactive channels as being in a test phase,” says Mulligan. Test phase? Yep. And what’s more, Amex doesn’t think of ExpressNet and the Web travel site as potential profit centers but as services.

Just to be sure, I followed up with spokeswoman Melissa Abernathy. She confirmed that is indeed how the company views its interactive platforms. “We thought of the Web site launch in March as a soft opening,” she explained. “It was done without much fanfare.”

That’s shocking stuff, coming from a company that, more often than not, is the first on the block with new products and technologies. It means that American Express is still developing its interactive strategy and that the best may be yet to come.

It also might signal the beginning of the end of the tiresome top-down management order that Amex embraced for so long. Could it be that the corporation is evolving into a more flexible and adaptable entity, more willing to take its cues from a new medium? For its competitors, the probable answer has unsettling implications.