Main Street Needs American Express Small Business Saturday
By Bob Phibbs
I recently viewed comments on an article about the American Express Small Business and why several downtown businesses weren't participating. Many of the merchants wrote about the high fees charged by American Express to take their card as reason enough why they wouldn't participate.
Are you kidding me?
In a market that is as whipsawed and whiplashed as retail has been the past three years business owners are willingly choosing to not-engage with potential customers?!
The number one thing I get from new clients is, "How can we get more customers in the door?" It's what business has asked for hundreds of years.
This year, I want to take aim at the "onerous fees" of American Express but first an astonishing fact:
Based on American Express spending data as of December 2, 2010, small retailers that accepted American Express Cards including those that sold apparel, bikes, books, electronics and flowers, saw an estimated 27% increase in sales on American Express Cards 2010 compared to the same day after Thanksgiving in 2009.
Now, let’s take a look at the numbers.
Let’s say you have a store doing 50,000 a month.
Let’s say 2% of your customers pay with an American Express card. That would be about $1000 in sales.
At a 3% discount rate that would be about $30 for the month.
Have you given discounts worth more than $30 for the month? I’m sure you have.
It's not a matter of losing business because a customer doesn't have another card, it's that the customer profile of AMEX customers is much higher than any other. Jewelry stores have known this for a long time.
Additionally each quarter, American Express provides five reports showing cardmember spending at your business, including:
Who your customers are.
Where they're from.
How they spend at your business and in your competitive marketplace.
Maybe you already take their card but haven't participated in signage, your own press release or rallying your local merchants to publicize the day. That's like having a new car in the driveway and not giving it gas.
Local businesses, Main Street organizations and Chambers of Commerce could look at:
Providing maps to participating merchants
Creating a QR code to post in the window linking to participating businesses
Putting out red welcome mats to show their participation and build on the buzz.
American Express Small Business Saturday isn't a panacea, it won't fix that surly customer you always get in looking for a deal. It won't make your employees show up on time or give you free shipping from a supplier. But it will definately expose your store to more customers.
Which could give you a larger bank balance at the end of the month. How are you planning to participate?
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