7-Eleven takes a big gulp of customer data

The ubiquitous convenience store chain updates its loyalty program from punch cards to a mobile app for super-frequent patrons

7-Eleven may be one of the most recognized convenience store brands in the world--and it's definitely the largest, with more than 56,000 locations worldwide. But until recently, the company knew nothing at all about its individual customers, who typically pay with cash.

The 88-year-old retail chain began work on its first digital customer loyalty platform for the U.S. in 2012. Previously, some franchisees had run their own loyalty programs--usually involving old-school punch cards. "But more and more of our customers were digital and mobile, and they felt the experience should be the same from store to store," explains Robert McClarin, loyalty CRM marketing technologist at 7-Eleven.

First, 7-Eleven's leadership committee (representing operations, marketing, merchandising and IT) discussed what they wanted to accomplish, with input from franchisees. Then, in 2013, the company worked with Teradata (a data management vendor) and Brierley+Partners (a loyalty program creator) to build a CRM system integrating transactional data with customer segmentation.

Last fall, they launched the consumer-facing part of the loyalty program: the 7Rewards mobile app, which assigns each customer a unique ID and bar code. The rollout began with 100 stores in Washington, D.C., and was completed nationwide in March.

The first target: beverage buyers, an obvious choice, given that 7-Eleven in 1964 became the first company to offer coffee to go and has been selling the Slurpee since 1965 and the Big Gulp since 1976. Today, more than 60 percent of its patrons grab some sort of liquid refreshment. The app gives them a seventh cup free after they purchase any six beverages.

The system enables 7-Eleven to tailor offers to specific customers in specific situations. "We take a look at what you buy, what you don't buy, offers you redeem and don't, the time of day, and even the temperature, and bake it all into an experience for you," says McClarin. One goal is to encourage customers to come in at different times--for example, luring frequent Big Gulp purchasers with a free snack, or offering morning coffee drinkers a free afternoon pick-me-up. "It's pretty easy to see what's going to motivate people," says McClarin. "The data scientists work their magic and that helps us be smarter about our offers."

A big challenge was tying Teradata's Real-Time Interaction Manager to 8,500 point-of-sale systems so they could communicate in real time, a problem solved with an enterprise service bus. "A lot of loyalty programs are based on batch [processing]," McClarin says. "We wanted to know immediately what was going on with a customer so we can thank them in real time."

7-Eleven is giving away more free beverages than ever before, but it's also selling more total units and the overall per-visit purchase is higher for 7Rewards members than non-members. The loyalty program also created a new way to collect customer opinions about stores, products and services. "The ability to survey members and get immediate feedback has been huge," McClarin says. "It's true customer engagement."

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