I used to work in finance, so maybe I'm a little out of your target market for this focus group, but here's how I see it:
If you're offering high cash back bonuses on certain transaction types (high enough that you're not making money on those transactions) you WILL lose money off this community. Not in general on the card, but on this community, it's a foregone conclusion. My Discover card offers 1% back everywhere and 5% back in rotating categories, and my all-in cash back rate on that card is something like 4.9% (the only reason it's not a perfect 5 is that I don't always guess a merchant category correctly). There's no way Discover makes money off of me (though they're good enough at making money in general that I'm still not only a fan but also a shareholder).
Which leaves you with two options if you still want to have a permanent spot in the wallets of people here. (1) Squeeze your profits per transaction down to slimmer than your competition, or (2) Get creative.
I like Strategy 1, because that provides the benefits promised by good old fashioned economic competition. And you'd be able to have the top cash back card on the market, at least for a while, which would be a good way to cross sell other banking products to a desirable market, even if the card itself isn't obscenely profitable.
For Strategy 2, if you're dead set on a cashback card, think about leveraging what advantages a bank has that individuals don't. Especially credit card churners. To me, the first thing that jumps out is YOU HAVE A HIGHER DISCOUNT RATE. Banks are masters at squeezing pennies out of time differentials. The whole banking model is "borrow short, invest long, profit off the difference." A dollar today is worth more than a dollar tomorrow, every time, in every situation, for every bank. But churners often use an internal discount rate of about 0%. Ultimate Rewards Points and Avios and hotel points don't earn any interest, and we don't care. We care about maximizing what goes into our accounts, and then the value we receive when the points/miles/whatevers exit our accounts. But YOU care a LOT about what happens to valuable currency when it's just sitting around doing nothing.
So EXPLOIT that. You can (a) give us a deal we love, (b) make some profits off the time value of money, and (c) create strong incentives for us NOT to churn the card ALL AT THE SAME TIME.
Here's how: Offer the best cash-back bonus on the market, by a decent amount, BUT PAY HALF OF IT AS A RETENTION INCENTIVE. Something like: 1.15% cash back on everything, and an additional 1.15% back in 6 months if you still have the card and have made at least one purchase on it every month. Or make it even more complicated. 1.25% back day of, 0.25% back in 1 fiscal quarter, another 0.25% back in 6 months, another 0.25% back after 3 quarters, and a final 0.25% payment back a year after your statement date for the original purchase. That way anyone maximizing their rewards would be leaving money on the table by canceling--we hate doing that. Meanwhile you'd keep the money in your pocket longer, which you can exploit. And the marketing writes itself, "The only card that pays you regular dividends simply for your loyalty." People like that. We MISS the days when banks appreciated our business and wanted a real relationship and weren't constantly trying to screw over the little guy to make a buck.
Anyway, that's my best advice for a unique and attractive cash back card that wouldn't be churned.
If partnerships are on the table, though, there's currently a HUGE hole in the market with transferable point programs. MR, UR, TYP, and SPG all provide a lot of good airline options, but NONE of them are that great for hotels (UR to Hyatt or SPG points for SPG redemptions are the only two hotel strategies across 4 currencies that make any sense over just using a different card--and some like MR are actively getting worse all the time). If you could create a flexible point currency that gave competitive transfer value to even TWO hotel families, you'd own the market of people who find hotels more desirable than flights (your road trippers, for example).