Chase Sapphire Case Analysis

Adem Bilalli

Gaurav Desai

Rong Chen

Jennifer Chien

Rob Williams

1. What value does the Chase Sapphire Reserve deliver to customers?

100,000 points open bonus; earn 3 points per dollar spend on travel and dining; a 1.5% points-to-dollar

conversion rate towards travel; a $300 annual travel credit; exclusive promotions and member discount.

Sapphire reserve provides convenience, relevance, and choice for young millennials. Special metal made

card.

How is it differentiated from competitors?

Chase launched the premium card faster than competitors and had a big market share. They also extend

the 100,000 points period and win trust among customers. The overall proprietary rewards are more

attractive than other competitors. 24h human operator response.

What value does the card deliver to the company?

After the launch of Sapphire Reserve, a record card sale volume growth was achieved. Chase experience

a dip in net revenue rate for card service. Positive long-term effects are expected.

2. How do you evaluate the 100,000-point offer? Was this a good investment for JPMC? Why

or why not? (You may want to consider how profitable the transactor, revolver, and dormant

Reserve customers are for JPMC. You may also want to think through how long customers have

to remain with the brand and how much they have to spend to recover acquisition costs - think

back to the CLV we discussed in marketing math.)

Transactors (30%) – They are more likely to get 100,000 points. They are more likely to use card so they

would be also getting more reward points each year. Since they are paying on time, they would be less

likely to pay interest fees.