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The "Chase Sapphire: Creating a Millennial Cult Brand" case study deals with customer retention amidst changes in policies and marketing schemes. It explains the dynamics that revolve around customer loyalty, customer acquisition, and the intense competition that the credit card industry faces.
Shelle Santana, Jill Avery, Christine Snively
Harvard Business Review (518024-PDF-ENG)
September 28, 2017
Case questions answered:
- With respect to CRM, what should Chase Sapphire do moving ahead to increase its competitive advantage? Identify the issues and suggest solutions for the same.
- What is your assessment of the Chase Sapphire Reserve card? Is this a good product for JPMorgan Chase (JPMC)? For the Sapphire brand? Why or why not?
- Why has Chase Sapphire Reserve been so successful in acquiring customers? Will this success continue over time? Why or why not? What changes would you make to their customer acquisition strategy going forward?
- If you are a competing credit card provider, how do you respond to the Chase Sapphire Reserve? How should Chase position itself to be ready for these competitive responses?
- How successful will Chase be at retaining Chase Sapphire Reserve customers into their second year? Why? What would you suggest they do to improve their odds of retaining their customers?
- Over time, the Sapphire brand has evolved from a single product (Sapphire launched in 2009) to a three-item product line as shown in case Exhibit 5. Going forward, how would you manage the Sapphire brand and product portfolio? Does Chase have the right number of products in the line? Are the features of each product the right features? What changes, if any, would you make to the Sapphire Preferred card given Sapphire Reserve’s success? What would you do with the no-fee Chase Sapphire product? What, if any, changes should be made to the Sapphire Reserve card?
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Case answers for Chase Sapphire: Creating a Millennial Cult Brand
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Chase Sapphire: Creating a Millennial Cult Brand – Case Analysis
This Harvard Business Study about Chase Sapphire revolves around consumer banking and the credit card market. It explains the dynamics that revolve around customer loyalty, customer acquisition, and the intense competition that the credit card industry faces.
In this case study, I will be analyzing recommendations in my capacity as an independent consultant and guiding the JP Morgan Chase brand to break-even and maximize their profits.
Introduction – Chase Sapphire
JP Morgan Chase secured revenue of $44.9 billion and reached a net income of $9.7 billion in 2016, it ranked in top 2 credit card issuance and had a strong network and spread over the US. Chase Sapphire was launched to change the perception of how a credit card is viewed. It was able to identify and capture 15% of the market segment which consisted of a high net worth customer segment.
With the launch of Chase Sapphire Reserve Card in 2016, the sales target was met within two weeks, as against the forecasted target of 12 months. However, a dip in net revenue has been reported and the top management is anticipating customer behavior, and steps it needs to turn their customer behavior in its favor (Santana et al. 1,2,4).
The following is a summarized version of the SWOT analysis for JP Morgan Chase (Santana et al. 1-11).
Identifying the problems
From the case study, the following problems have been identified for JP Morgan Chase Sapphire (Santana et al. 1-11).
- Revenue lost due to the open-loop system.
- Affiliation costs with cobrands for the rewards system.
- Heavy customer acquisition costs ranging from 250$ to 500$
- Payment of annual fee
- Reduction of bonus points to 50,000 from 100,000.
- High rate of churners.
- Heavy clutter due to existing sub-brands.
- Absence of tailor-made reward system.
- Similar tangible cards for sub-brands.
Understanding the credit market
Before proceeding to the solution, it is important to understand the credit market for Chase Sapphire and what the consumers prefer. A ranking system has been developed to…
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