For American Express Co., exclusivity is a marketing mantra.
The credit-card company advertises that its customers are members of a kind of club, and its product perks as the advantages of membership. That approach has extended to its multimillion-dollar marketing partnership with the Greater Toronto Airports Authority, signed in 2012. The deal has given American Express access to travellers at Canada's largest airport, and partly, to show competitors' customers how they are missing out. The company sponsored free wireless Internet connections for everyone, but also introduced a fast-lane through security, prominently branded for card members only, exclusive lounge access, and priority lanes for taxis and limos.
As it expands the partnership, however, Amex is offering more perks irrespective of brand loyalty. The latest, announced on Tuesday, will give travellers at Toronto Pearson International Airport free downloads of eBooks – such as Us by David Nicholls and Betrayers by David Bezmozgis – and music to their devices, through agreements with HarperCollins Canada and Sony Music Canada.
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The airport partnership has had an impact on Amex's bottom line, as well as Pearson's. Since the partnership began, cardholders' spending at the airport's retailers has grown 34 per cent. After a 15-per-cent discount was offered on parking for cardholders, spending on parking transactions grew 11 per cent from 2013 to 2014. Despite a 75-per-cent increase in the annual fee for its Platinum Card, which took effect in June, 2012, the same month that the partnership launched, applications increased by 51 per cent versus forecast (for the period of January, 2012, to July, 2013).
The deal has given the brand more exposure to potential customers. Average time spent on the free WiFi in the airport is 40 to 50 minutes. According to American Express Canada's research, 31 per cent of travellers travel through airports three or more times per year. The offer of free media could be widely applicable, as well: 87 per cent of Canadian travellers carry a device compatible with music files, such as smartphones and MP3 players.
Transportation hubs are seen as valuable marketing vehicles. This month, Canadian Imperial Bank of Commerce announced a multiyear sponsorship deal as the exclusive financial services partner of the Union Pearson Express, Toronto's upcoming rail link between Union Station in downtown to Pearson. The deal reinforced a marketing partnership with the airport that CIBC signed in late 2013.