When Co-Brand Partners Go Bad
How healthy are your co-branding partners? If they are not healthy, what will be the impact on your customers? Add one more thing to the to-do list for shepherding the company's product lines through this downturn: watch your partners to ensure that they treat your loyal customers with the same care that you do.
JPMorgan Chase® is struggling financially, and it has decided to increase revenues by squeezing its credit card holders: increasing credit card rates and making its terms more onerous for people who either don't charge frequently or who carry a balance.
Until today, I was a happy Chase customer with two credit card accounts: one Amazon.com® co-branded account and one Marriott Rewards® account. Today, in my post office box, there was a message saying that my terms had changed: my interest rate was going up and the other changes were unfavorable to me and not competitive with my other credit card accounts. I had not done anything to trigger this action that I have been able to identify. Fortunately, they did offer an "opt out" option to close the accounts, so I took them up on it.
I know that Amazon and Marriott have no control over Chase's behavior. They have done nothing but license their brand to Chase and link up their rewards programs. But that doesn't get them in the clear.
Here is the problem for Amazon and especially Marriott: their brands are now linked with a distasteful experience in my mind. I travel at least half the time in a given month, and until now, I had preferred Marriott hotels. But the Hilton hotel across the street doesn't remind me of the hassle I had to go through to cancel my rewards credit card. That's enough to change a frequent traveler's behavior, at least some of the time, when the hotel chain can least afford to lose a loyal guest.
From news accounts, this is happening to a lot of people all over the country - the kind of people who would normally be considered model customers in normal times. Given that the people who have taken the trouble to get a hotel chain's rewards card are probably in the upper quartile of frequent travelers, this has the potential to hit Marriott where it hurts.
What safeguards are in place to ensure that your company's loyal customers will be treated well, and your brand will be protected from this sort of harm?
JPMorgan Chase® is struggling financially, and it has decided to increase revenues by squeezing its credit card holders: increasing credit card rates and making its terms more onerous for people who either don't charge frequently or who carry a balance.
Until today, I was a happy Chase customer with two credit card accounts: one Amazon.com® co-branded account and one Marriott Rewards® account. Today, in my post office box, there was a message saying that my terms had changed: my interest rate was going up and the other changes were unfavorable to me and not competitive with my other credit card accounts. I had not done anything to trigger this action that I have been able to identify. Fortunately, they did offer an "opt out" option to close the accounts, so I took them up on it.
I know that Amazon and Marriott have no control over Chase's behavior. They have done nothing but license their brand to Chase and link up their rewards programs. But that doesn't get them in the clear.
Here is the problem for Amazon and especially Marriott: their brands are now linked with a distasteful experience in my mind. I travel at least half the time in a given month, and until now, I had preferred Marriott hotels. But the Hilton hotel across the street doesn't remind me of the hassle I had to go through to cancel my rewards credit card. That's enough to change a frequent traveler's behavior, at least some of the time, when the hotel chain can least afford to lose a loyal guest.
From news accounts, this is happening to a lot of people all over the country - the kind of people who would normally be considered model customers in normal times. Given that the people who have taken the trouble to get a hotel chain's rewards card are probably in the upper quartile of frequent travelers, this has the potential to hit Marriott where it hurts.
What safeguards are in place to ensure that your company's loyal customers will be treated well, and your brand will be protected from this sort of harm?
posted by Katherine Radeka
at
2:36 AM
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