Love at first sight: the ballad of Foursquare and AmEx

I recently came across Tom Rattray’s blog post about co-marketing through credit cards via his Twitter account. (Go Twitter!) It got me thinking back to an article I read on Mashable called “How Foursquare & AmEx Are Putting a Fresh Twist on Loyalty Marketing“, this partnership is not co-branding by definition, but I wanted to address this unique marketing strategy in my post.

Traditionally, co-branding is the practice of two or more brand names fusing together to create a new product that highlights each product’s competencies. Examples include American Airlines Visa Card, Oral-B/Braun plaque remover, Pillsbury brownies with Nestle chocolate, and LG Prada phone, just to name a few. According to Tom’s post, successful co-branding occurs when both companies “can achieve greater brand recognition, reach larger markets, and increase consumer spending”.

What Foursquare and American Express are doing is not exactly co-branding, but this partnership does touch on one important implicit goal that co-branding encourages. That goal is to create new benefits that each product would not have been able to on its own.

It’s a new initiative that just got launched and how it works is that you register your American Express card on Foursquare and your credit card company will reward you with deals after it has verified that you checked into the venue.

Here’s a short walk-through provided by Mashable on how to activate your deal. The people in the video are at Cafe Crepe and they are trying to activate the “Spend $5 Save $5” deal.

Some of the benefits that this partnership provides for Foursquare, American Express and third-parties include:

• Foursquare.        Potential to generate more income for the start-up company; opportunity to work with one of the biggest credit card companies in the world, hence to increase usage and market penetration.
• American Express.        Opportunity to work with a cool brand; opportunity to appeal to a younger consumer base; opportunity to explore how mobile apps will influence the personal credit industry in the future.
• Third parties.     Potential to generate donations through check-ins.

Information credited to Business Insider, Mashable and WSJ.