Denny's Zinger: The Costly Costco/American Express Divorce
The landing page of my revised website (launching in a couple of weeks) leads off with 9 Inviolable Direct Marketing Rules.
Ignoring any of these will hurt response.
Rule #8: "Make it easy to order." —Elsworth Howell
- "Make the order mechanism so simple an idiot can understand it." —Malcolm Decker
- All order options should be available for the customer's convenience: Online — Mail — Phone — Fax — Credit and ATM Cards — Cash — Check
The Costco Curiosity:
Peggy and I have been Costco members for several years. We go three or four times a year.
What always mystified me was the exclusivity of the American Express Card.
In the past decade, Costco has more than doubled its annual revenue to $112.6 billion for the fiscal year ended Aug. 31 and nearly doubled profits to $2.06 billion
Throughout that time, customers couldn't make purchases with credit cards branded by Visa Inc., MasterCard Inc. and Discover Financial Services. Costco, however, does accept debit cards from Visa and MasterCard.
Plus cash and check.
My reading: All those years Costco dispensed money to competitors by refusing Visa, MasterCard and Discover. Could it not have tripled its business? Maybe even quadrupled it?
Recently, Costco hit up American Express for more favorable terms. "No dice," said AmEx CEO Ken Chenault.
It was announced American Express cards would not be accepted by Costco after March 31, 2016.
The next day, American Express shares fell 6.4 percent.
Takeaway to Consider:
- Rule #8: For Pete's sake, make it easy to order!
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