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.
@Gary, I both agree and disagree with you this time. I am extremely happy with American Express (I use a business Platinum card) and will say that of all the credit card companies I use (Amex, CapOne, Chase, CITI) they have *by far* the best customer service.
I disagree that customer service is a commodity across credit card brands. CITI is awful. They work very hard to drive one to the Web or chat, citing coronavirus, but they don’t deliver on the promise.
The one thing I used to value with CITI is their single use card number system. It stopped working for me, and when I finally got to speak to a CSR, was told I had a new card coming and that was why. It still refuses to work despite a new card, and yes this is their expensive AAdvantage Executive card. I wasn’t going to renew this card, but apparently we are getting an annual fee credit so I will, but next year this card is toast.
Amex leads, CITI lags badly, the others just tag along in some amorphous group with no brand distinction whatsoever.
Warren Buffett has done basically squat over the last 15 years. Even I have outperformed him, without trying. He has recently lost a ton on Kraft-Heinz.
Dude has lost his nerve. Investing is not a 90-year-old man’s game. And I think he’s worrying about his legacy, not wanting to be remembered as the guy who screwed the pooch at the very end of his life. He is paralyzed.
He did some incredible stuff in the 60s, 70s, 80s, 90s to be sure. A legend. He long ago had the fantastic insight that by controlling an insurance company, you could get access to a gigantic pile of cash you could invest for your own benefit. Decades of compounding later, here we are.
But he should turn over day-to-day activities to younger guys.
Amex has much easier 90 day returns/disputes. Especially with returns, you don’t get endless demands for documentation like you do with Chase’s provider.
I think American Express service has gone down hill. However, I still trust them more than the credit cards.
Yes, I agree, Amex does not have good customer service. They have this reputation for it that is false, if you actually have had a premium card from Amex you’d know.
Buffet is right about Amex because Amex is first and foremost a credit card/charge card issuer. It does some personal loans and offers a savings product. The big banks are powerhouses that do investment banking, wealth management, corporate banking, market trading, and traditional consumer banking including loans, lines, mortgages, deposits and credit cards. Amex needs to pay up for an elevated level of customer service while other banks do just fine with a bit less because of their size and relationships with banking customers.
What differentiates Amex is their online chat feature. Other than that I have been pretty satisfied with the customer service by Citi, Chase, Barclays, and Bank of America. The only issue that pops up is Indians call centers. It’s like an Indian in Mumbai calling someone in Kansas for help with an Indian credit card. A lot of the Indian agents are very nice but they are too far removed from the products in the U.S. to be as helpful.
Couldn’t agree with Amy more on the call center issue. Worst possible assistance ever. Amex chiefs should not wait for survey results but actually
Be given different scenario problems, call ‘in’ and see what ‘we’, their customers have to experience.
Amex customer service has declined steadily. I like them for the dispute resolution, for the $19.95 primary rental car insurance coverage that comes free with CSR,but sucks in comparison to the effort expended to get a claim paid, and for the handling of the extended warranty. Amex bought me some really expensive plasma TV’s years ago–then when those failed just outside 30 days and their chosen supplier CDW wouldn’t take the TV’s back, Amex stood up and paid for a 3rd $9000 TV.
The documentation required to get a car claim handled was very easy with Amex and they handled the matter quickly.
I am an Amex Platinum card holder and could not be happier with the CS and support.
From getting a refund on an 18 month old vacuum that failed (they didn’t even ask for documentation), to getting theater tickets refunded through their dispute system or getting a card replaced because it was compromised, Amex has always done me right.
Also, with the $200 Uber credit, the $200 airline credit, the $100 Saks credit, the points I earn when I use it and now the streaming credit, the card will actually be paying me to use it this year.
Amex has no moral compass. 10 years ago they change their status to a bank 30 days before bailout so they can borrow 3.5 billion from federal government. Now during pandemic while government trying to bail out small businesses with loans such as ppp….AMEX TIGHTENING CREDIT LINES on long time clients including health care providers in poverty zones.! Maybe they should join the team. Bonus points flying not a priority under present circumstances.
I agree that the American Express product is a superior one. From customer service to the cards themselves (especially when they have an over the top sign on bonus). In the past many years and it seems like 20 cards ago, I still hold on to three brands of cards. The others have all been closed or or just sitting there collecting dust.
In my opinion, these three are the best blend of customer service and benefits for me.
1) American Express ( I hold the Hilton Surpass )
2) USAA ( the standard card )
3) Chase ( Sapphire Reserve and United )
AMEX has lost its way. I was denied admission to the LAS Centurions lounge because my AA boarding pass didn’t have a seat assignment printed on it (due to AA ops problems). After explaining the situation and despite presenting my Platinum Card and asking them to call the AA gate, they told me I had to leave. Never being one to enjoy a hassle, I simply cancelled my Platinum card on the spot. Switched my global T&E spend to Chase Sapphire Reserve and could not be happier. Better customer service and less aggravation. AMEX Is a relic of the 1980’s.
Started in 1992 with plain vanilla AX, upgraded later to gold which I still hold, and now have also added platinum. Why? Because they have an excellent record of service and have always been there for me when I needed them when traveling overseas, or my card was misused fraudulently, or mistakenly missed a payment and interest was forgiven. Lost card in Europe? no problem.
This was unlike CITI which, transfers you to all kinds of people, puts you on hold, requires all kinds of passwords to identify yourself, et al. And I have been banking with them for about 45 long years.
So yes, my definite and final comment. American Express, aside from the prestige it implies, it also implies about the excellent service one expects from the company.
Discover may not have the brand but it has the best customer service of all
I believe Amex has better customer service than the other cards I hold (I have 10 cards). The service used to be EXCEPTIONAL (10+), but they are slipping. It’s now only an 8. But their charge back assistance and agreeing to a charge back is better than any of the other cards I hold. I’ve been an Amex “member” since 1984. BTW, the Jobs video was GREAT! Thanks.
Former long term Amex cardholder just switched to Chase Sapphire. AMEX kept charging me for baggage fees on my Delta AMEX Platinum card for which there should be no charge. Even after several disputes including copies of my ticket Amex employees would call me a liar and yell at me that I was not on the plane. Their customer service decline started under the new CEO Steve Squeri. Their customer service and dispute policies changed after he became CEO. He allows executive customer service employees to lie by stating to members that they report directly to him and that they have no other supervisor or manager and no one other than he can review their decisions. AMEX has become a company with poor controls that has grown past the capability of the current management. The Chief Legal Officer worked in a firm with L Lin Wood – the wacko attorney and she spends alot of time on face book instead of working.