American Express Chief Executive Officer Kenneth Chenault, speaking in a city where retailers once revolted against its fees, said the lender has learned the dangers of arrogance and doesn't take any customers for granted.
During the 1980s and 1990s Amex "gained a reputation as being prestigious, elitist and expensive -- and for years we reveled in those attributes," Chenault, 63, said in a speech Tuesday hosted by Boston College's Carroll School of Management, describing the firm's efforts to add cardholders and merchants. "We took our prestige so seriously that as a company we too became elitist and arrogant."
Retailers in the area stopped accepting Amex cards in a 1991 protest known as the "Boston Fee Party" that drew nationwide attention to the costs they bore on transactions. Local restaurant owner Steve DiFillippo, who led the uprising, gained notoriety at the time for stabbing an Amex card with a 10-inch butcher knife.
Amex, which is still accepted at fewer stores than Visa Inc. and MasterCard Inc., has focused on customer service and started a program last year called OptBlue to win over small businesses by lowering some of their processing costs. It also has become more inclusive by adding places where people buy everyday items, such as groceries, while offering more types of cards and rewards, Chenault said.
"We almost missed the boat," Chenault told the room full of top executives from Boston-area companies including BJ's Wholesale Club and Legal Sea Foods. "But because of their historical relationship with our brand, our customers gave us time."
Amex's relationship with merchants is again under scrutiny after a federal judge ruled last month that the lender's practice of barring them from steering shoppers to cheaper cards violated U.S. antitrust law. If the ruling isn't reversed on appeal, as much as 12 percent of Amex's revenue could be at risk, according to one analyst's estimate.