PBM

Chase Sapphire:
Creating a Millennial Cult Brand
 Chase Sapphire Reserve Card

Launched in August 2016

Exceeded 12 month sales target in 2 weeks

Earned popularity through social media

100,000 sign-on points-social media & WOM

Post Promotional Inducement

Introduction Reduced introducAtory bonus to 50,000 points

Maintain competitive differentiation
Included other products : Sapphire and Sapphire
preferred
2
 Commercial
Banking

Corporate &
Investment Bank Merchant
Acquiring
Operations Asset & Wealth
Consumer
Consumer
Management
Banking services
Consumer &
and
Mortgages and
Community
auto financing
Banking (CCB)

Community Small Business

Banking Payment
Processing
 • In 2016, CCB counted- U.S. households as
customers,
• Revenue $ 44.9 bn
• Net income $ 9.7 bn

Consumer • Chase ranked 1or 2

• Boasted the highest rated mobile banking app
and • Largest ATM network
• Most visited banking portal
Community • 50%- affluent U.S. households-2 miles-Chase
branch
Banking
 Transaction
Cardholder Merchant
• Open loop
• Closed loop
Issuer bills holder for Cardholder pays Acquirer pays Transaction is • Issuers: 3 main
transaction total amount merchant sent to acquirer sources of
revenue
Card Merchant • 30% of
Issuer Acquirer customers:
i. Transactors
Issuer compensates ii. Revolvers
Acquirer pays
network iii. Dormant
merchant Acquirer transmits
interchange transaction to
Network transmits Credit card
transaction to issuer network
Network
(Amex, Visa)

The U.S. Consumer Credit Card Market

 Market Segmentation
Demographic Behavioral/Attitudinal Psychographic

• LIFE STAGE : • Annual fee • Prosperous and content

• 18-6 years-15% • Rewards: • Deal chasers
• 18-26 years-15% • Cash-back on purchase • Financially stressed
• 26-60 years-59% • Proprietary rewards • Recovering credit users
• Senior citizens-15% • Co-branded rewards • Self-Aware avoiders
• Business accounts-11% • Interest rates or APR
• ASSETS/CREDITS: • Credit Lines
• Wealthy • Credit worthiness
• Affluent
• Emerging affluent
 Strategy for chase consumer credit cards
To strengthen Chase’s proprietary products

Strong presence in the affluent market

Smith and Serra-new strategy-rationalized company’s product portfolio

Launched substantial market research project-confirmed the attractiveness of AFF/HNW customer
segment
Travel cobranded credit card products such as United and Delta Air Lines

Competition for proprietary issuer cards- dominated by Amex

Amex- Platinum card, 24 hrs customer service, access to exclusive clubs etc.

Value proposition: Exclusivity, rewards and access.

Card members-member since

 • 2009- JPMorngan Chase consolidated its card portfolio
into 5 primary sub brands. [Addressing different
markets]

Chase
JPMorgan- Pvt Chase Ink- Chase Chase Slate-
Sapphire-
banking Small business Freedom- cash Financial

Chase
travel and
customers owners back offers respoonsibility
dining

Sapphire: A
New Sub-
Brand is Born
 Sense of trust, credibility and security

Sub brads allows you to speak directly to each target

segment.

Strengthens the brand

Chase Sapphire-reward card for premium service and

travel benefits

Ultimate Rewards-online portal for managing rewards and

offers which provided elevated experience for customers

High performing representatives- answering calls

immediately,

resolving issue within a short period.

 Heavier compared
Minimalist design
to other cards

Metal core
sandwiched Intangible value, A
between 2 pieces conversation piece
of plastic.

Characteristics, Weight raises

customers Part of identity
that set it apart. dopamine levels
 2016
2014 Sapphire Citi entered as a
Stopped Began throttling Preferred competitor, in
actively marketing represented the premium
acquiring efforts. more than half credit card
Customers of Sapphire total segment.
Accounts.

• Company anxious to make stronger inroads into

AFF/HNW segment.

Expanding • Carried an annual fee of $95 and offered cardholders

50,000 points after they spent $4000 during the free

the Product three months.

• Providing customers access to exclusive, curated,

Portfolio Chase experience.

• Weight of the card.
• Satisfying “thunk” of the customers.
 Customers affluent than rest of Chase’s proprietary portfolio.

24-44 years old, with incomes on $150,00.

The Launch of the

Authentic travellers and savvy about rewards.

Chase Sapphire Opportunity to build on the momentum and brand equity

Reserve Card To create a line extension to compete in the ultra-premium, high-fee

segment.
 Market
Response
Points Junkies Depleting Raw A.C.A. goal More than
Material reached within expected turn
2 weeks over

“To Good to be true”

- 2016, The Points Guy
 Competitors 1 2
Response AMEX Citibank

“Difficult for competitors to

ignore”

14
 The Dilemma of
Features-and-Benefit
Bundling

Moving The Chase Brand’s

Strong-points

Forward:
Managing
the Brand Early Months on Book
Consumers –

Portfolio
Codispoti’s Singular
Focus
 Extremely Dynamic
Industry

Differentiating the
“Preferred” from “Reserve”

Raising the Future Plans:

Stakes
• Positioning of the Sapphire
Portfolio’s Additional Innovations