The CEO of American Express has shared two times when Warren Buffett has given him advice over the past couple of years, and both times Buffett told him the same thing. Upon becoming CEO in 2018, and again at the start of the global pandemic-driven recession, Buffett told CEO Stephen Squeri that his priority was to protect the American Express brand.
It’s that brand that leads customers to choose to spend with American Express, in a payments space that is increasingly a commodity industry.
“I talked to our largest shareholder, Warren Buffett,” Squeri said on an investor update call in mid-March, according to a transcript on Sentieo, a financial-research site.
“The one thing he has and will continue to always point out to us is that the brand is special,” the head of the financial-services titan continued.
“That brand needs to be cared for, the brand needs to be invested in and we will continue to do so through tough times and through the good times,” he added.
…The investor told [the CEO upon taking the position in 2018] that “the most important thing about American Express is the brand and the customers that aspire to be associated with the brand,” Squeri said at a Bernstein conference this week, another Sentieo transcript showed.
I hear from readers all the time who tell me they spend with Aemrican Express because of the customer service. In my own experience I haven’t found that service to be better than competitors, at least over the past decade, but they’ve unquestionably built up a reputation for prestige whether it’s through the Black Card or prestige associated with Platinum Card.
Steve Jobs did a great job at explaining brand purpose and being relevant to your customers. It’s important to define who you are, and tell that to your customers. It’s also important to tell that to your employees, so they know how to make decisions inside the company.
Apple can focus on creative types, empowering them to pursue their missions and dreams. Nike can celebrate great athletes. Very few companies have been able to create a clear purpose that customers associate the way American Express has. Without that brand American Express might as well be Discover.