MCI Communications Corp., in a move that could attract thousands of new customers to the company, yesterday announced a joint program with American Express Co. for the mass marketing of MCI's cut-rate residential long-distance telephone service.
If successful in a test run of at least four months, the program could enable customers of the District-based long distance telephone company to be billed through their monthly American Express statements.
"I think it's a perfect partnership," said MCI Chairman William McGowan. "We bring the ability to develop innovative services, but they bring an expertise in marketing, merchandising and business development. This will add to American Express' ability to completely meet the travelers needs."
American Express is expected to send fliers about the new joint arrangement to more than 100,000 of its customers who they believe travel extensively, offering an American Express-sponsored discount on the flat monthly rate for MCI telephone service between hundreds of cities. About 8 million persons carry American Express cards.
MCI has attracted more than 120,000 customers to its residential long-distance service since it was introduced earlier this year. It is in direct competition with American Telephone & Telegraph Co. and several other smaller companies. American Express is also a partner in the nationwide Warner-Amex cable television operation.
The joint arrangement represents the first time American Express has offered a service, rather than a product, to its customers in this fashion.
The two companies plan to split all the costs associated with starting the project, although MCI would pay American Express for the costs associated with the mailings.
After the responses are evaluated, American Express would receive a precentage of the total fees billed for MCI, much like the credit card company's arrangement with hotels and restaurants.