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People thought millennials hated credit cards -- then JPMorgan cracked the code with the Chase Sapphire Reserve

Matt Cowan/GettyMillennials didn’t hate credit cards. They just wanted something marketed toward them and not their parents.
  • JPMorgan Chase made a splash with its now-legendary Sapphire reserve credit card, thanks in part to figuring out what millennials wanted in a premium card.
  • Pam Codispoti, who led the Sapphire team, told Bloomberg Businessweek that affluent millennials didn’t dislike credit cards, they just wanted something marketed toward them and not their parents.
  • After interviewing young spenders across the country, Codispoti and team realised a product featuring flexible travel and dining rewards would be a hit.

When JPMorgan Chase first launched its now-legendary Chase Sapphire Reserve credit card, it had enough confidence to forego any formal marketing and rely on word of mouth – despite chasing a demographic, affluent millennials, that supposedly hated credit cards.

That’s because JPMorgan’s Sapphire team, led by Pam Codispoti, had cracked the code on millennials and credit cards. They realised young spenders didn’t loathe credit cards, they just didn’t have much interest in having products that were made and marketed for their parents shoved down their throat.

“What they were looking for was something different than what the market had to offer at the time,” Codispoti, who has been promoted to oversee JPMorgan’s retail bank branch network, told Bloomberg Businessweek’s Jennifer Surane. “They weren’t interested in their father’s credit card.”

After interviewing millennials across America, they realised that the cohort craved flexible travel and dining rewards.

So JPMorgan packaged unprecedented rewards – a $US300 travel credit, an eye-popping 100,000-point sign-up bonus, lush bonus points for travel and dining spending – with a broad array of airline, hotel, and restaurant partners to redeem them with, making a hefty $US450 annual fee seem like a worthwhile investment.

The fallout has by now been well documented: Millennials responded so enthusiastically that JPMorgan temporarily ran out of the metal core feature in the card. JPMorgan booked a $US200 million loss in the last quarter of 2016 thanks to the card – which it expects to recoup by retaining customers over the long haul – and subsequently cut the sign-up bonus in half.

And American Express, which considered the card a direct attack on its Platinum credit card, and a slew of other card issuers scrambled to match the Sapphire Reserve.

Read the full Businessweek story here.

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