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So she’s a marketing genius for selling $2300 of rewards for $450? (100k points at around $0.02 per point [0] plus $300 of travel credit) Also, you had to go

So she’s a marketing genius for selling $2300 of rewards for $450? (100k points at around $0.02 per point [0] plus $300 of travel credit) Also, you had to go on a “listening tour” to discover that wealthy young professionals enjoy traveling and eating at restaurants? [0]: https://thepointsguy.com/2015/03/redeeming-chase-ultimate-rewards-points-for-maximum-value/ https://thepointsguy.com/2015/03/redeeming-chase-ultimate-re...

InclinedPlane 9y ago
The whole reason why credit cards provide benefits is because "points" cost less to them than the nominal dollar value. I'm pretty sure that Chase has done the math on that.
- didgeoridoo 9y ago
  It’s irrelevant that it’s marginally profitable. The problem is that the article makes it sound like nobody ever thought of giving away free money before. It’s not genius marketing by any stretch of the imagination.
  - danso 9y ago
    If it was simply a matter of giving away benefits and points for free, why is it (as alleged by the OP) that Chase/JP Morgan managed to such a major encroachment into the premium market due to the Sapphire? Sure, “anyone” can brainstorm a benefits package and viral branding and yet Chase seems to have dominated this phase at the particular moment.
    - specialp 9y ago
      Because they were giving people $1500 to sign up for their card effectively. I am one of those people that signed up. I signed up for no reason other than I am getting a tremendous amount more than what I am paying for. Last December Chase announced that they lost about 2-300 million off their profits due to the generous promotion. If I taped a dollar bill to every can of Coke and sold them for 50 cents and the sales of Coke exploded, would you say I put a marketing coup on Pepsi? Chase still has extremely generous benefits even without the promo I am wondering how long it will last. As long as it does I will keep the card.
      - wan23 9y ago
        > As long as it does I will keep the card. So you see value in their product and you're a satisfied customer. Is it even possible for a bank to offer anything more?
        intev 9y ago
        I think you're missing his point. He never said that the card isn't valuable, or that the rewards were not worth it. All he said was that it's not considered "genius" if you need to continuously lose money hand over fist by giving away freebies to attract people to your product. It's "genius" when you don't have to do that.
      - patio11 9y ago
        If I taped a dollar bill to every can of Coke and sold them for 50 cents and the sales of Coke exploded, would you say I put a marketing coup on Pepsi? This depends on whether you sell cans of Coke (boring) or convert people into Coke drinkers (very interesting to Coke). Chase invested $X to, effectively, purchase a portfolio of new users. Some members of that portfolio will be worth less than the average cost of acquisition. Some members will be worth much, much, much more. "Banks are full of dumb people who are bad at math" is one of hackers' common beliefs which is not just a vexatious tribal marker but also a really you-have-to-turn-off-your-abilities-to-perceive-the-world-truthfully-to-believe-this vexatious tribal marker.
perseusprime11 9y ago
They beat amex at their own game. That’s a big deal.
- bsder 9y ago
  AMEX basically shot themselves in the foot. AMEX had one of the highest renewal fees for users and one of the highest transaction fees for vendors. Consequently, they lost the ubiquity required to be a useful credit card and wound up in a downward spiral positive feedback loop.
  - prepend 9y ago
    Losing Costco was a big problem for Amex.
mabbo 9y ago
> So she’s a marketing genius for selling $2300 of rewards for $450? They've done the math. They know how quickly the points will be spent (slowly). They probably have a deal that when you buy something with points, they don't have to pay the company itself for say 6 months, or maybe they get a discount on the service like 15% off. They could even decrease the value of points over time. They also know that you'll renew, and they won't have to give you $2000 worth of points again. They know the probability of renewal for each customer, each year. Each time you do, the deal gets sweeter for them. That's how someone can "give you $2300 for $450" and still make money.
- AFNobody 9y ago
  /r/Churning For some of us, taking VC/marketing money and laughing all the way to the bank is a hobby. I didn't renew my CSR or 3 other cards I had with chase. I walked away with ~$5k in benefits for ~$700. That doesn't even get into the free $$ from a bank account or the other stuff I've done in the past 12 months.
  - r00fus 9y ago
    The bet is that for each one of the /r/Churning crowd, there are many many more who are "followers" and simply get the card that their knowledgable buddy has - but less often, and only if the perk differential is dramatic. That is the market the CC companies want. You merely benefit from this by riding the crest of the wave.
  - Kihashi 9y ago
    Yeah, but there are plenty of people visiting /r/churning who are renewing the CSR (myself included) and that I think is a win for Chase. Right now, the math works out to keep putting spend on the CSR (along with Freedom and Freedom Unlimited). Granted, the math is different for everyone based on their locations, spending, and travel habits, but I think we'll see a decent number of renewals.
patio11 9y ago
Anecdote: she designed a program which went from 0 to "in the pockets of literally over 90% of SFBA professionals who've eaten with me in the last 12 months", in under a year, and when I ask about it every last one of them said it was their main card. You know the line from the Social Network? If it were as simple as outspending Amex, you would have outspent Amex. Middlebrow dismissal all you want; this was one of the biggest coups in consumer banking in the last 20 years. (The LTV of a premium credit card gets into the five figure region.)
- oh_sigh 9y ago
  Yes, CSR is hot, but it did cause them to take a $300M profit hit, and their dominance will only last until the next bank offers insane handouts like chase did.
- hueving 9y ago
  See if that's still the case after a year though. I bought for the free handout and then cancelled before the annual renewal.
dang 9y ago
This sort of shallow, hasty dismissal of someone else's work is just the kind of comment we're hoping to convince people to pause before posting here—and then not post. Would you please not do this in the future? It's easy to convert this kind of bad comment into a good one: instead of acting like you know someone's work better than they do, post your points as respectful questions. The odds are that a hasty internet dismissal is missing something, and even if it isn't, it damages the conversation culture to snark this way. The kind of comment we want on HN comes from reflection, not reflex.
- megy 9y ago
  These sort of cards have been around for years, specifically AMEX has been offering these deals for a long time, with lots of points and free flights every year. I can't see what is different about this card, so I think their complaint stands. This looks like a puff piece.
  - dang 9y ago
    Perhaps you haven't yet read the excellent replies the comment received? Even when an article is a puff piece, though, that doesn't make damaging this community ok.
  - Kihashi 9y ago
    I've never seen a card like the CSR. It really only compares to the AmEx Platinum and Citi Prestige (although some other banks are now trying to compete). The AmEx plat has far too many restrictions to make it valuable to me (and, it seems, many others). The bonus category (5% on travel) is only for one particular airline. I have (almost) no airline loyalty. I will fly with whoever is cheapest (unless the prices are close). The travel credit is for airline incidentals with a single airline. Since I never check a bag or pay for things in flight, that is entirely useless to me. The Uber credit is also useless. I might be able to use the Uber credit-- if it weren't spread out over 12 months. The Centurion lounge access is only useful if you are regularly in places that have a Centurion lounge. Meanwhile, for the CSR, travel (for both the category bonus and the credit) is travel. There are very few restrictions. It offers the same Global Entry credit, the same Priority Pass membership, the same primary rental car insurance, and the same rental car benefits. It also offers things like trip delay insurance that the AmEx does not. Additionally, it offers United as a transfer partner and United still has the most flights out of my airport. If one were based out of a Delta hub, the math changes since the AmEx has delta as a transfer partner and offers Delta Lounge access. tldr: The restrictions on the AmEx make it hard to use and justify the annual fee vs a no AF card like Citi Double Cash. The CSR's lack of restrictions make it easy to get more value than the AF.
im3w1l 9y ago
I feel like there is a customer acquisition bubble, where companies pay $1000 to acquire $500 customers and convince investors that they are worth $2000 and use that to get ever more funding which is used for bonuses and acquiring even more customers. If that's true then the marketing genius isn't selling the card to customers. The marketing genius is selling the card to investors.

InclinedPlane 9y ago

The whole reason why credit cards provide benefits is because "points" cost less to them than the nominal dollar value. I'm pretty sure that Chase has done the math on that.

didgeoridoo 9y ago
It’s irrelevant that it’s marginally profitable. The problem is that the article makes it sound like nobody ever thought of giving away free money before. It’s not genius marketing by any stretch of the imagination.
- danso 9y ago
  If it was simply a matter of giving away benefits and points for free, why is it (as alleged by the OP) that Chase/JP Morgan managed to such a major encroachment into the premium market due to the Sapphire? Sure, “anyone” can brainstorm a benefits package and viral branding and yet Chase seems to have dominated this phase at the particular moment.
  - specialp 9y ago
    Because they were giving people $1500 to sign up for their card effectively. I am one of those people that signed up. I signed up for no reason other than I am getting a tremendous amount more than what I am paying for. Last December Chase announced that they lost about 2-300 million off their profits due to the generous promotion. If I taped a dollar bill to every can of Coke and sold them for 50 cents and the sales of Coke exploded, would you say I put a marketing coup on Pepsi? Chase still has extremely generous benefits even without the promo I am wondering how long it will last. As long as it does I will keep the card.
    - wan23 9y ago
      > As long as it does I will keep the card. So you see value in their product and you're a satisfied customer. Is it even possible for a bank to offer anything more?
      - intev 9y ago
        I think you're missing his point. He never said that the card isn't valuable, or that the rewards were not worth it. All he said was that it's not considered "genius" if you need to continuously lose money hand over fist by giving away freebies to attract people to your product. It's "genius" when you don't have to do that.
    - patio11 9y ago
      If I taped a dollar bill to every can of Coke and sold them for 50 cents and the sales of Coke exploded, would you say I put a marketing coup on Pepsi? This depends on whether you sell cans of Coke (boring) or convert people into Coke drinkers (very interesting to Coke). Chase invested $X to, effectively, purchase a portfolio of new users. Some members of that portfolio will be worth less than the average cost of acquisition. Some members will be worth much, much, much more. "Banks are full of dumb people who are bad at math" is one of hackers' common beliefs which is not just a vexatious tribal marker but also a really you-have-to-turn-off-your-abilities-to-perceive-the-world-truthfully-to-believe-this vexatious tribal marker.

perseusprime11 9y ago

They beat amex at their own game. That’s a big deal.

bsder 9y ago
AMEX basically shot themselves in the foot. AMEX had one of the highest renewal fees for users and one of the highest transaction fees for vendors. Consequently, they lost the ubiquity required to be a useful credit card and wound up in a downward spiral positive feedback loop.
- prepend 9y ago
  Losing Costco was a big problem for Amex.

mabbo 9y ago

> So she’s a marketing genius for selling $2300 of rewards for $450? They've done the math. They know how quickly the points will be spent (slowly). They probably have a deal that when you buy something with points, they don't have to pay the company itself for say 6 months, or maybe they get a discount on the service like 15% off. They could even decrease the value of points over time. They also know that you'll renew, and they won't have to give you $2000 worth of points again. They know the probability of renewal for each customer, each year. Each time you do, the deal gets sweeter for them. That's how someone can "give you $2300 for $450" and still make money.

AFNobody 9y ago
/r/Churning For some of us, taking VC/marketing money and laughing all the way to the bank is a hobby. I didn't renew my CSR or 3 other cards I had with chase. I walked away with ~$5k in benefits for ~$700. That doesn't even get into the free $$ from a bank account or the other stuff I've done in the past 12 months.
- r00fus 9y ago
  The bet is that for each one of the /r/Churning crowd, there are many many more who are "followers" and simply get the card that their knowledgable buddy has - but less often, and only if the perk differential is dramatic. That is the market the CC companies want. You merely benefit from this by riding the crest of the wave.
- Kihashi 9y ago
  Yeah, but there are plenty of people visiting /r/churning who are renewing the CSR (myself included) and that I think is a win for Chase. Right now, the math works out to keep putting spend on the CSR (along with Freedom and Freedom Unlimited). Granted, the math is different for everyone based on their locations, spending, and travel habits, but I think we'll see a decent number of renewals.

patio11 9y ago

Anecdote: she designed a program which went from 0 to "in the pockets of literally over 90% of SFBA professionals who've eaten with me in the last 12 months", in under a year, and when I ask about it every last one of them said it was their main card. You know the line from the Social Network? If it were as simple as outspending Amex, you would have outspent Amex. Middlebrow dismissal all you want; this was one of the biggest coups in consumer banking in the last 20 years. (The LTV of a premium credit card gets into the five figure region.)

oh_sigh 9y ago
Yes, CSR is hot, but it did cause them to take a $300M profit hit, and their dominance will only last until the next bank offers insane handouts like chase did.
hueving 9y ago
See if that's still the case after a year though. I bought for the free handout and then cancelled before the annual renewal.

dang 9y ago

This sort of shallow, hasty dismissal of someone else's work is just the kind of comment we're hoping to convince people to pause before posting here—and then not post. Would you please not do this in the future? It's easy to convert this kind of bad comment into a good one: instead of acting like you know someone's work better than they do, post your points as respectful questions. The odds are that a hasty internet dismissal is missing something, and even if it isn't, it damages the conversation culture to snark this way. The kind of comment we want on HN comes from reflection, not reflex.

megy 9y ago
These sort of cards have been around for years, specifically AMEX has been offering these deals for a long time, with lots of points and free flights every year. I can't see what is different about this card, so I think their complaint stands. This looks like a puff piece.
- dang 9y ago
  Perhaps you haven't yet read the excellent replies the comment received? Even when an article is a puff piece, though, that doesn't make damaging this community ok.
- Kihashi 9y ago
  I've never seen a card like the CSR. It really only compares to the AmEx Platinum and Citi Prestige (although some other banks are now trying to compete). The AmEx plat has far too many restrictions to make it valuable to me (and, it seems, many others). The bonus category (5% on travel) is only for one particular airline. I have (almost) no airline loyalty. I will fly with whoever is cheapest (unless the prices are close). The travel credit is for airline incidentals with a single airline. Since I never check a bag or pay for things in flight, that is entirely useless to me. The Uber credit is also useless. I might be able to use the Uber credit-- if it weren't spread out over 12 months. The Centurion lounge access is only useful if you are regularly in places that have a Centurion lounge. Meanwhile, for the CSR, travel (for both the category bonus and the credit) is travel. There are very few restrictions. It offers the same Global Entry credit, the same Priority Pass membership, the same primary rental car insurance, and the same rental car benefits. It also offers things like trip delay insurance that the AmEx does not. Additionally, it offers United as a transfer partner and United still has the most flights out of my airport. If one were based out of a Delta hub, the math changes since the AmEx has delta as a transfer partner and offers Delta Lounge access. tldr: The restrictions on the AmEx make it hard to use and justify the annual fee vs a no AF card like Citi Double Cash. The CSR's lack of restrictions make it easy to get more value than the AF.

im3w1l 9y ago

I feel like there is a customer acquisition bubble, where companies pay $1000 to acquire $500 customers and convince investors that they are worth $2000 and use that to get ever more funding which is used for bonuses and acquiring even more customers. If that's true then the marketing genius isn't selling the card to customers. The marketing genius is selling the card to investors.