Ali Namin

MKT 9703
Touval
25 March 2021
Chase Sapphire – Business Case Analysis

1. The business need for Chase: Define the marketing challenge (or opportunity) after the

launch of Reserve, circa 2017-2018.

Chase Bank is synonymous with the best in banking industry has to offer. Their customer

service, benefits, and association with status are well renowned even amongst those who aren’t

old enough for their own credit cards. In 2009, Chase released the extremely popular Sapphire

card in what is probably the most popular launch in credit card history. The card reached its 1-

year target in just 2 weeks, thanks to its debut annual fee of $0 fee, incredible sign-on bonuses,

and appealing perks.

Almost a decade later, Chase Bank released the Sapphire Reserve card in 2016 with an emphasis

on higher points multipliers and even more perks. The challenge Chase faces is maintaining

current cardholders and growing their network of card holders given that the Sapphire

Reserve card has a $450 annual fee and competes in a higher space amongst a different tier

of competing credit cards.

Keeping customers satisfied with perks/rewards when price of card is a substantial amount is

very difficult. A key factor to determine the future course of action is what the card is being used

for the most by users and catering to that need. This also creates an opportunity for Chase

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 Bank to reward their loyal customer with rewards personalization and better rewards,

encouraging years long relationships with customers.

2. Analysis: Explain the key factors most relevant for making decisions or determining the

future course of action.

When making a marketing decision, it is important to think about what is trying to be

accomplished. In this scenario, we are trying to retain current Chase Sapphire Reserve clients as

well as grow the number of card holders. The most important factor to consider is value to

the customer. To ensure that this is being provided, the rewards will be catered to each

individuals needs. We can accomplish this by allowing customers to choose their own points

multipliers categories by giving them an set number of percentages that they can divide however

they see fit. This way they feel their card is getting the most points it can, in the categories where

it matters.

In addition to this every few years a perk is added on, rewarding long time customers for their

loyalty and giving them an incentive to stay on and look forward to additional perks from Chase

Bank. These stacking of benefits that the Chase Sapphire Reserve card offers starts to quickly

outweigh the $450 annual fee for the credit. As a result, customers are able to rationalize the cost

of the credit card in perks and the economic value it will have on. Not to mention the also feel

like they are part of an elite club when entering the highest tier of rewards, the card has to offer,

appealing to the social and ego centric value. The question in the customers head of “If I pay

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 this yearly membership, am I going to get equal or more out of it?”, beings to answer itself

as the rewards outweigh the annual fee.

3. Recommendation: Describe the marketing decision or action that the business should

undertake, demonstrating synthetic / integrative thinking (e.g. a product decision might

have an impact on pricing and promotion). Justify your recommendations of these future

actions.

My recommendation to chase would be to offer loyal customers the ability to personalize

their rewards multiplier on points categories as well as earning perks as their loyalty grows

stronger. No other card allows you to pick the categories for points or high tier perks. This

would allow new customers to have something to look forward to as a reason to stay.

For those who are already members and personalizing points, they have additional perks and

rewards to unlocks as their loyalty continues to grow with Chase. Making the customer feel

important and rewarded for their years of loyalty is in the end what gets them to stay.

The economic value depends on a customer’s spending habits and how much they are able

to earn back in points or things like how much they use perks like airport lounges. There is

also a social value of being associated with being a big spenders when you use the card and

being around others like yourself when you take advantage of exclusive perks like airport

lounges. People want to be viewed highly, this program will have dedicated customers like

parents and grandparents happy, while their children and younger generation aspire to reach that

level.

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 This theme of aspiration and statis is common amongst young adults in other areas of finance

such putting money towards social security, 401K and building their portfolios.

4. Limitations: Business cases provide only partial information. You do not need to do

additional research to fill in the gaps. But you’re required to acknowledge the limitations

of your knowledge of the case, qualifying your recommendations.

To make our marketing decision, we were limited to a small amount of data within the

PowerPoint. There is a need for additional information that we do not have in order to make the

best decision in this scenario. A more informed decision would allow for our campaign to have a

wider impact and retain/attract more customers.

If we worked for Chase Bank, we would have been able to offer more accurate personalization

based on the immense amount of customer information we would have access to. This would be

information like an individual’s preferences, income, lifestyle, spending habits, family, travel,

etc.. This access to Chase Bank client’s personal information would allow us to get a better sense

of what customers are using their credit cards for and what they are trying to get out of it.

Creating an optimized frame of mind from the customers perspective would allow a better

marketing decision to be made based on the customers needs.

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