Michael Schneider, CEO of Fluidesign, Fluidata and Nesting

Dear American Express,

I have been a card member since 1999. During this time, I have accumulated the following cards:

American Express Platinum Charge Card (no “pre set” limit)
American Express Starwood Credit Card ($35,000 limit)
American Express Business Platinum Credit Card ($60,000 limit)

I opened a second business between 2007 and 2009 and had a second American Express Platinum Charge Card during that time as well for that business.

Prior to the end of 2008, I sang American Express’ praises to everyone I could. I enjoyed feeling like a privileged card member at Airports, Hotels, and anytime I interacted with American Express.

In March of 2008, my spending on the charge cards was so high (some months were over $75,000) that you offered me the Centurion (“Black”) card. I nearly accepted, but somehow couldn’t justify spending $7,500 to get a credit card.

For the record, in ten years of being your customer, I have never had a single late payment or missed payment. I have paid all bills on time.

Everything changed in early 2009. You started shutting off my credit limits.

In March of 2009, my business started to pick back up (thankfully) and we started charging more on our Platinum card, which has been our main credit card for the last ten years for the business.

You shut off our credit line because it was “over our six -month average spending limit.” You asked me to produce burdensome documentation “proving” that I had the financial resources to pay the balance when it came due. I asked if a ten year perfect payment history was enough; you said no.

At the end of March 2009, after making several “deals” with you (that took hours of my time) to open up $5k here and $10k here in credit (on a card that has no “pre set” spending limit) we paid our balance in full, like we always do.

In April of 2009 we started with a zero balance and began charging again. You shut off our credit line after $35,000 in spending. Then, you did something that sent me over the top. You called me on my cell phone asking if I could pay the balance in full that day. The statement hadn’t even closed yet, and we you hadn’t even billed us yet!

Upon stating that to the representative, she said she understood but that American Express was “uncomfortable” with the balance and wanted an immediate payment. My response was that there was absolutely no way I was paying American Express a dime before my statement closes. I explained that if I have to pay for the charges as I go, I might as well put the card away and simply pay cash.

You’ve called weekly and harassed my accounting manager, asking for payments on charges that you haven’t even billed me for yet.

At this point, you’re denying $10 charges, causing my accounting manager to switch to our VISA to pay small monthly recurring charges, like our phone bill. You have wreaked havoc on my business’ day-to-day cash flow.

You have destroyed your reputation with me and many of my CEO and Entrepreneur friends. I have several friends that spend $100,000/mo on Black cards that are going to cancel.

You have harassed your best customers and turned what used to be a stellar reputation into one of the most hated companies in the business world. Personally, I cannot wait for the day when I pay off 100% of my balances with American Express and cancel my cards. I will never do business with you again after that point.

I understand times are tough and financial institutions have gotten burned. This tough time will pass, but the damage you’ve done to your reputation will stay with you. Customers like me – who spend a lot and pay their bills on time every month – are who you need to get you through this time. Instead, you’ve lost me for life.

Michael Schneider
CEO, Fluidesign

Santa Monica, CA

Ps. I am not the only one that has written publically about problems with Amex. Here are a few others:

http://www.avc.com/a_vc/2009/05/im-feeling-the-costs-of-credit-card-fraud-and-defaults.html
http://www.latimes.com/business/la-fi-lazarus29-2009apr29,0,5853535,full.column

It’s hard to avoid the bad news these days-the stock market falling towards zero, home prices declining, homelessness rising, our spending power being chipped away.

In your business, it’s more important than ever to paint an optimistic yet realistic future for your employees. Now is the time that you need good people by your side the most; now is the time you need them to be accept less and work more; now is the time for real leadership.

I wrote this post as a blogger for PC World - click here to finish the post on their site.

With no limit to the bad economic news lately, many companies are cutting back on their marketing budgets to conserve precious cash. The LinkedIn poll above says it all - 60% of companies are cutting back, and only 20% are increasing.

I understand the thinking: Consumers with less disposable income = less opportunity for my product/service = less return on investment of marketing dollars = cutting marketing budget. This thinking, while logical, is thinking on how not to lose - not thinking on how to win.

Now is the BEST time to increase your marketing budget.

1. All of your competitors are competitors are cutting back - so you can be even more potent with less money, sucking up remnant inventory online, radio, print, and TV.

2. Advertising and marketing firms are more flexible right now (including Fluidesign), so you can get a great deal on services that you couldn’t get in “normal” times.

3. You’ll stand out in consumer’s minds as a stable, strong company. If you can afford to market to them right now, you must be.

4. With the ROI of each dollar you spend much higher, you’ll position your company and its products/services to weather the storm and emerge in a much stronger position that your scared competitors.

Right now, most companies are playing to not lose. The best companies (and the ones that will survive) will increase their marketing budget, and play to win.

I’ve been watching the past couple of weeks as the world economy has taken a nose dive, fear has run rampant, and trillions have been “lost.” Fluid isn’t immune, and we’ve had to make hard (and sometimes painful) adjustments. But we’re getting through it.

My advice? Sell your way through this economy. Deals are still out there - they may be harder to find, and they may be for 20-30% less, but they’re still there. Adapt (quickly) by becoming lean in your operations, lower your pricing a bit, and sell like crazy. If you’re VC funded, check out Sequoia’s take.

That’s what we’re doing. So far, so good.