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Chase Sapphire: Creating a Millenial Cult Brand Shruti Surana(I062)

Arushi Jain(I026) Mayank Lakhotia (I036)

Paavan Maniar(I039) Ayushi Srivastava(I061)

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Chase Sapphire Reserve Card launched in August 2016,

by JP Morgan Chase Introduction

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Card sales exceeded its 12 month target in just 2 weeks

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50% customers were millennials who were posting photos of their Chase Sapphire Reserve Cards through unboxing videos on YouTube & #SapphireReserve was trending on

Twitter •

100,000 point sign on bonus drove social media frenzy

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Garnered attention of prominent bloggers and s

as “a must have card in 2016”

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There were five primary players in the credit card industry: Issuers were banks that issued cards

US credit card market

Cardholders paid charges and fee Merchants accept credit card payments Merchant Acquirers managed relations with merchants Network Providers processed payments •

The credit card industry was led by JP Morgan Chase, it had a market

share of 21.7% •

American consumers held 636 million cards. On an average a consumer held 2.35 cards

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Sub Branding Chase Sapphire

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Chase proprietary card portfolio was sub branded to cater to five market segments JPMorgan to cater to private banking segment Chase Sapphire to affluent customers interested in travel and dining Chase Ink to cater to small business Chase Freedom to cater to consumers interested in cash back Chase Slate to cater to consumers interested in building financial responsibility Sub branding was done to speak directly to each target customer segment Chase Sapphire was the rewards card introduced for high end consumers with practical features. Chase launched Ultimate Rewards program with ing IT infrastructure All Chase Sapphire calls were answered by live advisors

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Product Design Strategy The Launch of the Chase Sapphire Reserve Card

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A new segment of ‘new affluents’ that were 25-44 years old with income of $150,000+, authentic travelers and savvy about rewards Construct a value proposition comprised of the optimal mix of rewards, benefits, services, experience, interest rates and annual fees The motive to remain top of wallet for long term and to reduce the count of “churners” The card was presented as a flexible product that allowed consumers to set their own rules – providing convenience, relevance and choice

Market Response • • •

The Points guy quoted ‘it sounded way too good to be true’ Fueled by social media and online forums, news about the card spread quickly to ‘points junkies’ The annual acquisition goal was reached in just 2 weeks

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Social Media Strategy •

The Launch of the Chase Sapphire Reserve Card

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Rather than investing in traditional advertising, they turned to media platforms and influencers that were more pertinent to the affluent millennial consumers Engaged relevant influencers spreading the word within their communities Partnering with TV personalities, producer/directors, comedians, photographers, food & travel creator The celebrities shared their experience through 20 unique, highly engaging social content delivered to millions of followers Hosted media events, d with online video content (VOX media) Created the sense of limited availability, to give a feel of exclusiveness

Multi channel social media strategy • • • • •

Sapphire six: tapped anonymized spend data of reserve card to cover frequently visited dine outs; to promote they offered 3x points on dining benefits #SapphireOnLocation to showcase exciting meal and travel experiences Innovations: used Instagram and Facebook to demonstrate tips and tricks - automating bill pay using chase mobile app Dedicated social media team tasked with humanizing the brand Real time engagements

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REACH

POSITIONING •

Result focussed measurement framework

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During the launch, it sounded way too good to be true It is perceived as a high end, high fee, high reward card

PREFERENCE The target audience comprises of young successful millennials, in the age bracket of 2544 years

• “An AMEX says you are rich, but this says you are interesting” • Millennials who are considered not pay a high fee for anything, would prefer to pay for value

ACTION • •

The consumers responded by buying in large numbers 12 months sales target was achieved in 2 weeks

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Creating value from Chase Sapphire Reserve customers

Challenges • • •

Dip in net revenue rate for card services Will Reserve customers renew their s? Low barriers to switching credit cards

Objective •

Provide superior value to consumers along with managing the economics of the program

Solution •

Rewards are enough to generate loyalty – Lorraine Hansen, Head of Ultimate Rewards

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Use of social media by Chase Sapphire

Promotions • “So You Can” campaign on Facebook -- Reinforce card’s value proposition -- Driving small-ticket transactions eg. Bike rentals, food truck purchases • Instagram - #SapphireOnLocation and #SapphireSix to showcase meal and travel experiences • Highlight special offers only available to top of the line card holders by working with celebrity model Chrissy Teigan

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Assessing Performance at Chase Sapphire

Key Performance Indicators Alignment to brand’s business objectives

Diagnostic Metrics Metrics used to identify the changes needed to be made to improve KPIs

•Business driven via social media •Customer engagement score based on responses received •Grievances resolved via social media channel •Number of renewals •Income Distribution •Overall vs Target Segment Growth

•Number of likes, comments, shares and views •Number of likes, comments, shares and views on competitor social media activity •Changes in number of Customer complaints •Complaint resolution time

11 Benefits • Cost savings on offline ment • Customer loyalty • Increased FCR (dedicated customer service)

ROI for collaboration

Costs • People – collaborators, celebrities, influencers • Process – design campaigns • Technology – payment platforms Flexibility • Create stronger brand association • Avoid product cannibalisation (Preferred vs Reserve) • Product innovations

Risk 1. Multiple customer service goals 2. Attracts influencers 3. s access to social media

ROI

Operational ROI

Productivity ROI

Strategic ROI

Total Economic Impact

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Way Forward

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Strong Brand Association for Chase Sapphire Brand - Modern - Contemporary - Tailored for travelers - Generation Gap

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Customers with right expectations and getting them fulfilled

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Focus on increasing Early Months on Book Consumers to get the customers hooked and build affinity

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Accommodate and differentiate Preferred and Reserve categories

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Additional Product Innovations for the Sapphire portfolio

Managing Chase Sapphire Portfolio Going Forward

Thank You 14