Chase Sapphire: Strategies to Target Millennials and Build Customer Loyalty

This article discusses the strategies used by Chase Sapphire to target millennials and build customer loyalty. The market segmentation was done based on demography and behavioral aspects. The card is aimed at making a statement about the economic independence of the person holding the card. Chase formulated several strategies to position the Sapphire brand according to the targeted customer, including benefits and rewards of loyalty.

Running head: CHASE SAPPHIRE
CHASE SAPPHIRE
Name of the Student
Name of the University
Author note:

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1. The economy of the United States is fast giving space to the younger generation, the
millennial who are becoming self-dependant at an early age or are venturing into
entrepreneurship. The economic stability in the families are also allowing the young
ones to buy what they like. Therefore whatever is looked upon as status symbol are
desired by the millennial. “They had launched the Chase Sapphire Reserve Card in
August 2016, and the card exceeded its 12 month sales target in 2 weeks. Half of the
new customers were under 35 years old, building on the strong millennial cohort that
was initially attracted to the Sapphire brand. These millennial consumers were
proudly posting photos of their new Chase Sapphire Reserve cards on social media.”
Therefore the millennial had to be targeted and their needs had to be fulfilled. The
company designed a number of strategies targeting this population.
2. The market segmentation had been done by two ways, on the basis of demography
and on the basis of behavioural aspects. Demographically the population can be
divided according to their earnings, and their age, on the other hand, behaviourally the
consumers can be divided according to their pattern of buying, demand etc. The
largest of the consumers (59%) were in the 26 to 60 age group, what was quite
astonishing was 15% of the holders were below 25 years. One of the risk that is
associated in this case is the fact that the young consumers who are not yet stable or
serious in their career may become defaulters in repayment in the future. The
quantification can be done on the basis of the income stability and wealth of the
consumers which are in their names (Flitcroft and Lyons 2014).
3. “Market research showed that the Chase Sapphire brand had many strong brand
associations, including modern, more contemporary, understands me, understands the
way I travel, and not my father’s credit card, and was performing well with affluent
consumers”. Therefore the card is aimed at making a statement, it’s about the

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economic independence of the person holding the card. The statistics have shown that
average people carry multiple cards in their wallet, Chase Sapphire strategized to
place the brand at the top of the wallet, or to be the most used card among the rest
(Walker and Mullins 2011). Competitive alternatives are always there for customers
to switch loyalty, hence continuous innovation is necessary.
4. Chase had formulated several strategies in order to position the Sapphire brand
according to the targeted customer. The primary are the benefits and rewards of
loyalty. Most of the customers leave service when the term is finished, they use the
points and leave the service and switch brands. “As they approached the launch’s one
year anniversary, Codispoti and Serra wondered if the customers who had flocked to
Reserve would be as eager to renew their accounts. Credit card renewal rates for
premium cards were traditionally 60-90%, but the Reserve card was no ordinary card.
Remarked Codispoti, “Our objective is to build lifelong engaged relationships with
our customers. One of our biggest challenges is churners. They use the points and
leave and then go on to another card.” (Santana, Avery and Snively, 2017) Therefore
this is the evidence from the text that shows that the brand was using dedicate rewards
and benefits programs to bring new customers and hold on to the old ones.

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Reference:
Walker, O.C. and Mullins, J.W., 2011. Marketing strategy: a decision-focused approach.
Santana, S., Avery, J. and Snively, C., 2017. Chase Sapphire: Creating a Millennial Cult
Brand. Harvard Business School.