At JPMorgan Chase’s investor day they had a strategic update, the whole PDF is worth a read to see the direction Chase is heading (digital digital digital) but they also released some interesting statistics regarding the Chase Sapphire Reserve.
- Average income: $180,000
- Average FICO score: 785
- Average annual sales volume (card spend): $39,000
- Sales active rate (number of cards with greater than zero gross sales divided by total open accounts): 96%
- Renewals: 90%+
The presentation also touched on the value of these cardholders and the ability to cross sell them other products and services. They have run a pilot program for converting Chase Sapphire Reserve customers into Chase Private Client customers and also mortgage customers, with CFO Marianne Lake saying to expect more of this in 2018. I’m still shocked by the retention rates on this card being above 90% given the $450 annual fee. I don’t think this card makes sense to keep long term for most cardholders, but obviously the market disagrees. Those retention rates are as of December 2017 though, I wonder if we will see a drop off in retention after January as people grand fathered into the travel credit per calendar year downgrade/cancel their cards.
They also touched on their new branch strategy and renewals of Hyatt, Disney & Marriott portfolios. I always like to read these types of strategy documents and statistics, it gives you a better sense of how large the outside business is compared to our relatively small hobby and helps to give perspective. If Chase is really that confident in the renewal rates and turning those cardholders into CPC & mortgage customers, they should bring back the 100,000 offer ;).
People cancel after 12 months to be sure to get the extra $300, and retention is probably defined as a 12-month cardholder That’s probably why they think it’s 90% retention when it’s not. Just a hunch
The best tactical move Chase made to keep reasonable CSR retention is the change in the rules. Everybody were guessing “what kind of retention bonuses they will give us?”… and they beat us all with the new rule – only one Sapphire card at a time, and one Sapphire bonus in 24 months… Many of us (me included) were planning to apply for CSP and downgrade CSR.. I can only smile now, as we were outplayed… Bravo! For people who do not apply for some strange reason for business cards, now there is only one option if you want to transfer to partners (CSP or CSR)… For people who do, you still have CIP option, but if you carry any meaningful UR balance CSR comes with just extra $55 AF per year which easy to justify. For most users this $55 difference (or even a full $150 AF) will be easily justified by an array of travel benefits.. obviously those are not needed by everybody, but useful for many, and with quite impressive CSR customer service give a good piece of mind for just a reasonable price. If you use Priority Pass once, utilize primary car rental insurance, avoid paying travel insurance, but tickets with 1.5x… at least once – you got your difference back. Some users here are 100% correct – not all of us buying these protections anyway… but it adds some value for me even if I would not buy it otherwise. Non-refundable tickets are not a problem now (can not fly on Southwest everywhere, and probably would not want to on the longer flights)… would I buy travel insurance otherwise? Probably not, but it does not mean that that kind of protection has absolutely no value at all.. I would not price it at a face value of such insurance, but would give it some value for sure. If I have no other lounge access options right at this moment (and my approach is to not overlap benefits – I prefer to not carry more than one $500 AF card at the same time – since I have enough points and miles to satisfy our travel needs, I am ok applying for other cards which have expensive fee at a later time.) So, one use of the Priority Pass also pays for the $150 fee. Award availability can present a serious challenge.. One thing is when you can adjust your travel plans based on what is available (and I happily do that most of the time), but some time you do need to get from point A to point B.. and 1.5x on most cash available tickets is practically unbeatable. It wins in my books quite often even when I can use points/miles award redemption anyway.. So, we downgraded CSR for my SO (obviously after collecting second $300), and leaving mine for another year. Already have few trips lined up, so it definitely pays for the $150 fee.. after January 2019 I will probably collect my… Read more »
One additional benefit of CSR many people seem to miss is the deeply discounted golf rates available through Troon Courses. $99 vs $299 for each in a foursome is huge.
450 fee less the 300 travel credit is 150, or merely 55 higher than the sapphire preferred for more benefits (earn rate, burn rate, lounge access, better flight and baggage delay insurances). The value prop for non churning single card users is there
The CSR is the perfect travel card for me. I live in a United hub, so my award flights are nonstop to Europe on United. (I despise having to take “positioning flights” to get to a Delta or American hub — too many things can and often do go wrong.) The fastest way to earn United miles is to use the CSR and then transfer the points from Chase to United. I can’t do that with Platinum, Prestige, or Altitude. And if travel and dining spending exceeds about $3000 a year, the CSR is a better deal than the CSP.
I agree! I live in a United hub as well and I plan on keeping the card. I almost always have a use for United miles.
I’m holding onto it with the hopes that we’ll be able to transfer UR to an investment account at 1.25x or 1.5x (per the survey sent out at the end of last year). Any word on that?
Man I can’t wait for that Integrated Payment Experience!
Glad to see Chase is feeling good about their offering, but I’m happy to churn and burn.
I have the card, and my yearly income is less than the average spend on the card. Welp.
I think by end of March the retention rate will drop dramatically.
Like many others, I’ll be finishing off using up travel credits by March end and then will cancel.