The Wall Street Journal is reporting that former Barclaycard executive Matthew Massaua has been hired by J.P. Morgan Chase to oversee the Sapphire Reserve and other cards in the Sapphire family. Matthew will replace Lisa Walker who currently holds this position on January 1st, 2018. A Chase spokeswoman is claiming that the retention rate on the Sapphire Reserve card is currently at over 90%, I’d be shocked if retention rates stay even remotely that high and J.P. Morgan Finance Chief Marianne Lake tempered expectations stating that retention rates were “so far, very encouraging…better than our expectations, but a little early to sort of draw firm conclusions.”
The problem for Chase since the launch of the the Sapphire Reserve card in particular is making a return on the massive customer acquisition costs they incurred. They’ve already made some changes to address this, namely:
- Making the travel credit based on card member year, rather than calendar year for new customers. This prevents cardholders from easily double dipping the benefit and only paying one annual fee.
- Reducing the sign up bonus to 50,000 points from 100,000 points.
- Cross selling to Reserve customers. Reserve customers have been offered 50,000 Ultimate Rewards points by moving $100,000+ in funds to a new Chase checking customer.
First two measures were cost saving, I doubt we will see more in that department as Chase will need to remain competitive with other issuers in the premium card space such as American Express and the majority of the customer acquisition cost has already been incurred. I do think we will see significantly more cross selling between Chase products, especially for those holding Reserve cards. We’ve already seen a survey sent out that indicates that Chase is considering the option to cash out points into an investment account and a sign up bonus for opening a new investment account as well.
It’ll also be interesting to see if Mr Massaua will focus solely on the Reserve card or if we will see changes made to the other Sapphire cards as well, I still wouldn’t be surprised to see a premium business card enter the market once Chase considers the Reserve launch a success.
Hat tip to View From The Wing
