On Monday, American Express Company (NYSE:AXP) launched a new loyalty program where it will offer new rewards. More to that, having an American Express card will not be a requirement for individuals to earn points.
The new reward system is called Plenti and it will give customers a chance to gain points over a line of different businesses despite the form of payment used. The company decided to use this plan as a revamp strategy, in a bid to improve its performance.
American Express was rated as the worst market player in the Dow Jones index in the past year. Analysts say that they don’t expect the company to perform any better within the coming year. Part of the reason for the above inference is that the company has been struggling because of the strong dollar value. The company’s CEO reported that the home currency’s performance against other currencies such as the Euro and other major currencies has been detrimental to the company’s performance.
Amex is not the only company that was affected by the competitive dollar value. However, the company does have another major problem. The company is on the verge of losing one of its major lucrative deals with Costco. Amex was the exclusive credit card bearer for the wholesale and retail giant.
Losing exclusivity with Costco is a major blow to the company’s performance. American Express has already reported that the company will have to roll out more investments in order to make up for all the business that the company will lose in 2016. As a result, profits will low this year, thus leading to unhappy investors.
The war is not yet lost for Amex. The company still has a chance to get back on its feet. The fact that Warren Buffet still owns shares in the company is a good indicator. Investors do need to show a bit of concern about the company’s future.
The company’s new program will involve partnering up with the likes of AT&T Inc. (NYSE:T), HULU and a few more. Though the strategy is nothing close to the company’s old catching points, Amex plans on capitalizing on savings.