#161: 7-Eleven Shares Secrets to Success & Driving Loyalty with 7REWARDS.

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.

PAULA: I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: This episode is brought to you by Epsilon, and their award-winning People Cloud Loyalty Solution.

PAULA: Personalization should be integrated into the entire customer experience, including of course, your loyalty program.

PAULA: With this in mind, Epsilon recently released a guide outlining six key components that will put you on the path to personalizing your entire loyalty experience.

PAULA: This guide challenges you to do some housekeeping and reconsider how you think about your current and future loyalty personalization efforts.

PAULA: So, to download your copy of the report, visit epsilon.com forward slash Let’s Talk Loyalty.

PAULA: As one of the world’s largest retailers worldwide, 7-Eleven has been a brand I’ve wanted on the show since day one.

PAULA: Their US loyalty program called 7 Rewards has won some of the loyalty industry’s top awards.

PAULA: And so, I was thrilled to get the chance to interview Raghu Mahadevan, the Chief Digital Officer at 7-Eleven, and get his expertise and insights on how to achieve extraordinary customer loyalty.

PAULA: So, Raghu, first and foremost, welcome to Let’s Talk Loyalty.

RAGHU: Thank you, Paula.

RAGHU: Thanks for having me.

PAULA: I’m super excited, Raghu.

PAULA: I think, you know, I’ve been writing about 7-Eleven in all of your various amazing possibilities around the world, whether it’s Scandinavia or Australia, and obviously the incredible work with 7 Rewards in the US.

PAULA: So it’s super exciting to hear your story.

PAULA: So let’s get straight into it.

PAULA: And please tell me, what is your favorite loyalty statistic?

RAGHU: Paula, that’s got to be Net Promoter Score.

RAGHU: It’s the first and foremost thing that comes to my mind as I think about the customer.

RAGHU: And it starts from how much the customer is an advocate of the experience that is served up to them.

RAGHU: And it kind of shows up in many different ways.

RAGHU: It’s either a formal survey in which we measure Net Promoter Score or through a customer satisfaction through our customer care team or the app store ratings and so on and so forth.

RAGHU: But that’s the number one loyalty metric that we continue to obsess on, which is how do we serve our customers even better than where we are today?

PAULA: Wonderful.

PAULA: Well, it’s music to my ears, Raghu.

PAULA: And we certainly talk about Net Promoter Score a lot on this show.

PAULA: And I love the fact that you used the term customer obsessed because I literally actually yesterday had a conversation with Fred Reichelt for another episode of the show who you probably know created Net Promoter Score.

PAULA: And he absolutely said that, Raghu.

PAULA: It’s brands like 7 Eleven that are obsessed about loving customers that actually do, it comes through in all of the work that you deliver.

PAULA: And I think customers ultimately feel that loyalty.

PAULA: So that’s super exciting to hear.

RAGHU: Certainly, Paula, and over the years, it’s become a more commonly adopted metric that a lot of loyalty teams continue to measure.

RAGHU: And it’s like the most realistic measure of how the customer is an advocate of the program.

PAULA: Yeah, no, you’re absolutely right.

PAULA: So just because we’re talking about statistics, you did send me through a couple in advance.

PAULA: So just for the audience who mightn’t be, I suppose, as aware as I am, in terms of the sheer scale of 7-Eleven globally, I’m just going to quote a couple of them, Raghu, if you don’t mind.

PAULA: The first one, I think, is actually a real point of pride for you guys.

PAULA: So 7-Eleven actually invented the convenience store concept in 1927.

PAULA: I think that alone deserve extraordinary recognition.

RAGHU: You have a long legacy.

RAGHU: It’s a 94-year-old legacy that 7-Eleven introduced the convenience in the industry.

RAGHU: It started from an ice house in Texas.

RAGHU: Okay.

RAGHU: And it’s grown globally into what is now upwards of 77,000 stores serving customers across the globe, which is a pretty fascinating history.

PAULA: Extraordinary.

RAGHU: And we continue to keep customer at the center as we move forward.

PAULA: Oh, absolutely.

PAULA: And the other one as well was 10 million customers a day, Raghu.

PAULA: I mean, the mind just boggles.

PAULA: It’s an unbelievable number.

PAULA: It’s great.

RAGHU: We are really fortunate to be in the center of many communities and being the go-to destination for customers.

PAULA: Yeah.

RAGHU: As we look to serve their needs.

PAULA: Of course, of course.

PAULA: And I think what we have to comment on, Raghu, is how much those needs have dramatically changed in the last 18 months.

PAULA: And I’ll be very interested in your view in terms of whether new things emerged or whether it just accelerated things that customers already wanted.

PAULA: But before I even ask you that, Raghu, there’s so much within the 7 Rewards program.

PAULA: I’d love to get a sense of where it’s at in terms of what kind of scale is 7 Rewards at in terms of its membership numbers and any of the history, I suppose, that you can share with our listeners.

PAULA: Because I think I said to you before, our number one audience is the US and number two is the UK number three is actually Australia.

PAULA: So there’s very different experience with 7-Eleven around the world listening to the show.

PAULA: So just I’d love to hear about 7 Rewards in the US as it currently stands.

RAGHU: Our loyalty program gained 7 Rewards, the 7 Rewards loyalty program has evolved over the many years.

RAGHU: And what started in the early 2010s as more of a punch card program, frankly.

RAGHU: Folks used to walk into the store and they used to get a 7th cup free.

RAGHU: Whether it be the hot coffee drink or it be the big gulp.

RAGHU: And that’s how it started.

RAGHU: And then around the same time as we have seen absolute digital acceleration across the industry, we have evolved the 7 Rewards program to be an app-based program.

RAGHU: And certainly not overnight, but surely and certainly more personalized program for the customers where it’s right now a points program.

RAGHU: It boasts close to 55 million members and a large number of 90-day active membership base with our new 7 Rewards points program that’s grown and even accelerated through the pandemic.

RAGHU: You mentioned one of the things also that we have seen customers evolve through is that their needs have significantly changed just through the pandemic.

PAULA: Of course.

RAGHU: What used to be always a quick in and out has the need has kind of evolved into a quicker in and out as they look for safe and convenient shopping experiences in the store.

PAULA: Yeah.

RAGHU: More, more so outside the store, as customers have found delivery not more as a luxury, but as a necessity.

RAGHU: And we have pushed the pedal on a lot of these dimensions of increasing our contactless payment experience in the store, at the pump, accelerating delivery.

RAGHU: We are nationwide in the US with 7Now Delivery, which is more ways in which we are meeting customers in how they want to have the shopping experience and when they want the shopping experience.

PAULA: Yeah.

PAULA: And you’re absolutely right, Raghu.

PAULA: I mean, as long as I’ve been in convenience retail, which, as you know, is about probably three years, which I think is similar to you.

PAULA: So I’ve been writing, you know, for the guys in Liquid Bar Codes, all about, you know, the essential part about eliminating friction.

PAULA: I think we’ve all had that experience of being super busy, frustrated and maybe on our way to work or an important meeting, but needing to stop in a convenience store.

PAULA: So the industry has always impressed me with its laser focus on eliminating that.

PAULA: And we always took, I think, safe for granted.

PAULA: So I love that you’ve included that there, because it has become something that we have to be, I think, more explicit about, if I’m right.

PAULA: Is that something that you’re feeling that you need to articulate for members all the time now?

RAGHU: It is the, you know, safety, convenience and value.

RAGHU: These are things that we pay almost constant attention.

RAGHU: Pandemic, no pandemic, but definitely to the pandemic, the safety aspect of it has kind of found its way to come across as an expectation in more ways than one.

RAGHU: I’ll give you a quick example.

RAGHU: During, you know, as customers, you know, through the pandemic, as customers shopped at stores, we started, they started feeling how, you know, it would be great if we could shop without having to have a very in-depth interaction with the store associate.

RAGHU: Now, not all customers are like that, and we certainly don’t want this to a one-size-fits-all.

RAGHU: But for those customers who feel that they want to have a quick in and out, within seven rewards we have launched the mobile checkout feature, ScanPayGo.

RAGHU: So you enter a store, you grab your quick coffee, you grab the doughnut or the croissant you want for breakfast, and you don’t have to stand in a line, neither do you have to have interaction experience for those customers who choose so.

RAGHU: They can scan the product with the app, they can pay in the app, they can use a confirmation station to confirm that they paid and walk straight out the door.

RAGHU: So in more ways than one, it’s a very safe experience.

RAGHU: It’s even quicker of an in and out.

RAGHU: So you also avoid standing in lines for customers who are sensitive to it.

RAGHU: And it makes a huge win-win both for us and for the customer.

PAULA: So it’s an operational speed in a way that honestly, I don’t think we could ever have predicted.

RAGHU: Absolutely right.

RAGHU: And it’s going to be more and I certainly believe it’s going to be more of the norm.

PAULA: And had you started working in that, Raghu, can I ask you before the pandemic or was it literally a brainchild of it?

PAULA: Because I think we’ve talked before a couple of times about, you know, this idea that necessity is the mother of invention.

PAULA: And sometimes when you’re just in such a challenging situation, you find solutions that you wouldn’t have even looked for before, because obviously, as we said, you were already optimizing for speed.

PAULA: So is it something that was already in the pipeline or just came through as a result of the pandemic?

RAGHU: Yeah, Paula, at 7-Eleven, we have a long history of innovation.

RAGHU: And like, as you rightly mentioned, this is something that we had started working on pre-pandemic.

RAGHU: So we had launched a pilot with what we call Mobile Checkout.

RAGHU: We launched the pilot in the summer of 2019.

RAGHU: And the pandemic essentially accelerated the rollout of our pilot.

RAGHU: So we were headed down this path as we were anticipating the customer need for quicker and faster convenience.

RAGHU: And the pandemic essentially made it a necessity more than a luxury.

PAULA: Yeah, yeah, I’m sure your workload probably tripled overnight, Raghu, did it?

RAGHU: I think the entire industry basically.

PAULA: Yeah, yeah.

PAULA: And for people who don’t know, I think it was super important for me, actually.

PAULA: And maybe it was the same around the world.

PAULA: But the fact that convenience stores were deemed as essential services, I think first of all, that gave extraordinary, I suppose, extra respect to the convenience store industry.

PAULA: And I don’t think any of us had realized before how reliant we are on being able to stop by locally and pick up anything and everything we need.

PAULA: So it would have absolutely been extraordinary if we hadn’t been able to shop in our local 7-Eleven through this whole period.

RAGHU: True, Paula.

RAGHU: We and our entire store network, we feel in many ways grateful for the opportunity to serve the customer at a time of need.

RAGHU: The convenience store format definitely helps the quick in and out when customers have, especially in the middle of the pandemic before the vaccine started coming where there was an apprehension to spend a lot of time in a big box retailer.

RAGHU: The store format definitely helped the customer for more than just the quick stop by.

RAGHU: It started becoming the destination for the grocery filling more so often than previously.

PAULA: Yeah, and as well as the mobile checkout, Raghu, and thank you for explaining that because that sounds fabulous.

PAULA: We don’t have it where I live, so hopefully it will be coming soon.

PAULA: But you also explained to me before this call about this whole idea about even customers who want to pay by cash, which definitely must have given you additional challenges in terms of finding solutions that, again, meet the safety criteria, meet the speed criteria, and again, make sure people can get in and out but still get to pay with cash.

PAULA: So I’d love you to explain the solution you found for that particular cohort of customers.

RAGHU: Yeah, Paula, great question.

RAGHU: There are a few things we did to ensure that they have a very safe and comfortable shopping experience for the cash customers.

RAGHU: On the in-store shopping site, even before we get to 7 Rewards and the app experience, one of the things that we did across the entire store footprint is ensure that there is a plexiglass shield.

RAGHU: That we protected both the customer as well as store associates so that the transaction, even if it is a cash transaction, is very safe in-store.

RAGHU: The advancement we made again pre-pandemic, which we had started building in the 7 Rewards app, is the digital wallet.

RAGHU: It’s not, I mean, I think a lot of retailers and a lot of apps that we have have digital wallets.

RAGHU: One of the things unique in the digital wallet that works for 7-Eleven is that it is a safe haven for cash customers to load cash into the wallet so that it becomes a faster transaction every time they shop at a 7-Eleven.

RAGHU: So we built that very specifically with cash customers also in mind, because that is a significant good chunk of our customer segment.

RAGHU: They shop our stores.

RAGHU: And with the 7-Eleven wallet, it’s just another payment mechanism where they can park the money and use it as and when they shop our stores.

PAULA: Love it.

PAULA: And again, I think we’re all familiar with the term of having a card on file.

PAULA: So, you know, the whole concept of a wallet in my mind was a place where I put my credit or my debit card and again had that speed and simplicity so I didn’t have to find a way to pay every time.

PAULA: But to extend that out for cash customers, that’s absolutely fabulous, Raghu.

PAULA: Can I ask, is it within 7 Rewards or is it for all 7-Eleven customers?

PAULA: How does it actually operate in practice?

RAGHU: 7 Rewards, in many ways, is the heart of the 7-Eleven app.

RAGHU: So when a customer downloads the 7-Eleven app, it’s basically the 7 Rewards loyalty program.

RAGHU: And the app has all of the digital features and services built in.

PAULA: In one place?

RAGHU: In the app.

RAGHU: And one of them is the digital wallet, is the 7-Eleven wallet.

PAULA: Got it.

RAGHU: So as you download the app, you take the app to the counter, put a $20 bill, the store associate scans the wallet, loads the money, and then you have $20 in your wallet, as opposed to the more traditional credit and debit, which are all already baked into the app.

PAULA: Totally, totally.

PAULA: And I love that, actually, Raghu, and it’s a long time since I’ve been responsible for building a loyalty app.

PAULA: So one of the things that I really admire, and maybe the whole industry is doing this right now, but I love that you have everything in one app, because when I was, as I said, responsible for building some, there was always this concern about if you put too much functionality into one app, it would become extremely heavy, people wouldn’t download it.

PAULA: So it was sometimes the case in telecoms, for example, where there was an app for the core business to monitor your kind of, you know, your normal kind of mobile phone bill, but there was a separate part for the loyalty program.

PAULA: But what I’m hearing coming through is for you guys, it’s actually almost like what I see in like really advanced digital markets like China, where they have these like super apps, so everything lives in one place.

PAULA: And I guess what that achieves then is the customer has multiple reasons to download it, rather than having to say, oh my God, I have to download another app.

PAULA: Like, it’s just so compelling that they wouldn’t do without it, I guess.

RAGHU: Definitely.

RAGHU: Again, it all depends on the customer preference.

RAGHU: There are some customers who would, you know, for them, it’s one other app, they download it, use it, and then they decide what they want to do with it.

RAGHU: But like you mentioned, having all of it built into one app is definitely less friction than having to download one more app.

RAGHU: And mostly for most customers, that’s kind of the preference they have.

RAGHU: And for that, we are continuing to incorporate or thread the entire ecosystem together.

RAGHU: And we are currently in process of adding a couple of more of our 7-Eleven entities into our single app.

RAGHU: More so for something like our restaurants, which we have at 7-Elevens.

RAGHU: And how do you make that a core part of the 7-Eleven app?

RAGHU: And that’s something that you will see in short order.

PAULA: Oh my goodness, wow, that sounds like something I’ll have to keep a close eye out for, Raghu.

RAGHU: Yeah, definitely.

RAGHU: Very exciting for us to see how we can rope in those customers also as part of our loyalty program.

PAULA: Yeah.

PAULA: And I should congratulate you as well, Raghu, on a couple of things.

PAULA: First of all, you very helpfully, but quite casually mentioned 55 million members.

PAULA: The last figure I had from my own research was about 40 million, which I think was pre-pandemic.

PAULA: So the growth has certainly accelerated.

PAULA: And for my own amusement, I went to see what kind of population of a country would that equate to.

PAULA: And I came up with the fact that 7 Rewards had more members than the entire population of Canada.

PAULA: But already 55 million now.

PAULA: I’ll have to find another country that you equate to with your membership base.

RAGHU: We are humbled but excited as well.

PAULA: Yeah.

RAGHU: With the customers who are looking to 7 Eleven as their shopping destination.

PAULA: Yeah.

RAGHU: And hopefully we can continue to amaze them with our experience, involve them with a delightful experience, frictionless experience.

PAULA: Yeah.

RAGHU: So that we keep the number growing.

PAULA: For sure, for sure.

PAULA: And I suppose as loyalty professionals, Raghu, we always talk about obviously the importance of quality as well as quantity.

PAULA: And we’ve talked through some of the actual propositions.

PAULA: But another thing that really impressed me, I literally went on to the app store to look at, you know, the kind of ratings that your app is getting.

PAULA: And I’m sure you monitor this as a KPI yourself, but with them a score of 4.8 out of 5, which is absolutely extraordinary.

PAULA: And that’s from 208,000 ratings for the 7-Eleven app.

PAULA: So clearly it’s working and resonating with customers in terms of, you know, how useful they feel it is, as well as, you know, just being able to do things like, you know, capture their rewards and earn kind of, you know, points and prizes for doing their shopping with you guys.

RAGHU: Definitely, Paula.

RAGHU: It’s something that is very close to us.

RAGHU: As you mentioned, it is part of the customer feedback that we seek.

RAGHU: And we very closely look at what customers tell us through the app store reviews, but many other channels from where we see customer input.

RAGHU: And, you know, we are fortunate to have a world-class product and engineering team that can take the feedback that the customers give and then put it to good use, make the enhancements we need and then sell them back.

PAULA: Yeah, brilliant.

PAULA: And you’ve already mentioned as well, Raghu, that innovation is obviously a core value for 7-Eleven.

PAULA: And you know, it’s one of my favorite topics.

PAULA: And I’ve seen lots of different things.

PAULA: So I’ll give you, I suppose, almost just the opportunity to showcase any particular one that you want to at this point, but just some of the ones, I suppose, that caught my eye because they’re super cool.

PAULA: So you’ve mentioned things like machine learning, artificial intelligence, augmented reality.

PAULA: And I’ve even seen some things with, I believe, voice-activated refueling at one point, I know was being trialed in a number of stations.

PAULA: I think it was pre-pandemic, but from an innovation perspective, like beyond those really important developments around payments, as we’ve talked about, and the hygiene and contactless, what else do you think 7-Eleven or 7 Rewards is doing from an innovation perspective that you’re super proud of?

RAGHU: I’m going to give you two examples here.

RAGHU: And one of them from 7Next, which is our R&D division, which is really focused on working on what that customer experience of the future is and what the store experience of the future is.

PAULA: Nice.

RAGHU: And as we look across the industry, one of the things that the customers, if you take things like mobile checkout and wallet pay and so on to the next level, you almost think about cashierless stores, which is you’ve seen a number of different retailers focusing on cashierless stores.

RAGHU: We have a cashierless store in our store support center here downstairs, which we have built with proprietary technology.

RAGHU: But one of the things that we are looking at is how do you scale this across a 10,000 store footprint?

RAGHU: It’s great to have one or two or three cashierless stores, but how do you take this experience and scale it across 10,000?

RAGHU: So that’s number one.

RAGHU: The second one is something which has been an absolute win with 7Rewards customers.

RAGHU: It’s a very new feature, and it’s on the heels of the voice-activated fueling, which you mentioned, which is a price lock feature that we are piloting in Dallas.

RAGHU: With this feature, the customer enters the 7-Eleven app, gets to 7Rewards and then sees fuel, and has the ability to lock the fuel price in for the next four days.

RAGHU: And the price that the customer locks is the lowest price around the customer, not in one store, but the lowest price around the customer.

RAGHU: So they get to look at the price, take the price and lock the price for four days.

RAGHU: And what this does is to put customer in control of in many ways the pricing, so that as the market evolves, that brings the customer, that gives customer the certainty about the price which they pay for fueling.

RAGHU: And we are hearing great reviews from customers.

RAGHU: It’s a pilot that we are running across Dallas-Fort Worth.

RAGHU: And hopefully, once we have enough learnings and we fine-tune that, you should see that scale across.

PAULA: I love that, Raghu.

PAULA: I seem to recall that might have been trialed by 7-Eleven in Australia.

PAULA: Am I right?

PAULA: Yeah, that’s a big opposition.

PAULA: Absolutely.

RAGHU: It’s something that 7-Eleven Australia had piloted and done, I think, a few years back.

RAGHU: And it’s something that we are very happy to launch as the first player in the US.

PAULA: Well, I think it’s absolutely genius, Raghu.

PAULA: And I’ve said a few times on this show that one of the things I remember, in fact, from the recession, but I suppose another time of uncertainty in the world is that that’s when customers really need something that is very reassuring from the brand.

PAULA: So what I’m hearing, as you said, is the customer is in control and I know obviously I’m going to need to refuel in the next few days, then why should I not get the benefit of what’s available from my favorite 7-Eleven store in terms of pricing?

PAULA: Because if it goes up the next day, it always upsets me.

PAULA: And it’s the opposite of loyalty if I don’t have some level of control over the pricing that I can access.

RAGHU: And it’s a big customer win-win because you mentioned if the prices go up, then the customer locks the lower price.

RAGHU: And if the customer goes down, we’ll give customer to the lower price, not the locked price.

RAGHU: It’s a huge win-win for the customer no matter which way it moves.

PAULA: Well, that’s true innovation, Raghu.

PAULA: And again, we’ve often said that you’ve got to get the basics right.

PAULA: So, you know, the beautiful things about, as we’ve talked about, the stamps and the points and the rewards.

PAULA: And I will ask you actually about the streaks concept as well that you’ve launched there in the US.

PAULA: But actually, to be able to say, you know, definitely on the value piece, you can absolutely give customers that level of reassurance.

PAULA: I think that’s lovely.

PAULA: And it very much proves that 7-Eleven is being loyal to its customers rather than just expecting them to be loyal to you guys.

RAGHU: Something that we try in every single time and across just not the teams working firsthand on 7 Rewards, but it’s across every part of the organization.

RAGHU: You brought up a small example in terms of the streaks or the points.

RAGHU: That’s almost an effort that we do across the company, really noting what’s wins with the customer.

RAGHU: How do we work cross-functionally with our merchants and our vendors to figure out what is the product that needs to get on streaks so that it’s the product that the customer likes and it’s something that serves the business.

RAGHU: So it kind of works across the entire value chain.

PAULA: And am I right in understanding, Raghu, that this idea of streaks, which I think is something that you do talk to customers about, but you might correct me on that piece.

PAULA: But essentially, as I understand, your strategy is to identify the opportunity for frequency of visits and habitual behavior that you can just continue to encourage and give them almost like multiple points to make sure that that habit is literally accentuated and multiplied.

RAGHU: Yes.

RAGHU: One of the things we do there, Paula, to what you mentioned is we definitely try to tailor this to the customer experience and the customer behavior that we see.

RAGHU: There are many, and this applies differently for different customers.

RAGHU: And we are on a journey which actually tailors the streaks for the customers to ensure that it is something that the customer likes.

RAGHU: If customer likes product A, we want to ensure that you get loyalty both ways for the customer behavior on product A, instead of putting streaks just on a blanket of a bunch of different products.

RAGHU: That’s something that we try and tailor to the extent possible.

PAULA: And again, we all talk about personalization, but that’s bringing both personalization and integrity together.

PAULA: Because I think we’ve all worked in places, Raghu, where customer likes product A, so let’s try and see if we can get them to buy product B.

PAULA: And we’re focused more on our cross-sell and our commercial objectives, when actually what the customer wants is just to get more of what they love.

RAGHU: Absolutely.

RAGHU: I mean, you pick the morning coffee, and if the morning coffee works wonders, then we want to ensure that it’s also rewarding for the customer because they choose us for that quick morning coffee.

RAGHU: And that’s where the 7th Cup program really resonates as part of 7 rewards.

PAULA: Wonderful.

PAULA: Wonderful.

PAULA: One other area I wanted to, I suppose, just benefit from your expertise, Raghu, is there’s always a great deal of confusion about, you know, what can we expect in a convenience store in this entire industry in terms of what proportion of our customers are likely to be members of our loyalty program?

PAULA: And there’s lots of different terms like scan rates, for example, I think is the most common term for convenience retail.

PAULA: But again, there’s people, you know, listening to this show that work in airline loyalty or lots of different categories, hotels, etc.

PAULA: But what would you advise would be fair to say, given that we have come through, I suppose, again, very dramatically changing customer behavior, what would be a good experience for a store to aim for in terms of a proportion of customers that is swiping or scanning their loyalty program with them?

RAGHU: Yeah, it’s a good question, Paula.

RAGHU: If you ask, if I were to take this a bit hypothetically, I think you always want 100% of your customers to scan the 7 rewards out.

PAULA: Of course, yeah, totally.

RAGHU: We want everyone entering the store to be a 7 rewards member and use the app and enjoy the benefits of the rewards program.

PAULA: Sure.

RAGHU: Easier said than done, not because customers’ preferences, but it always depends on what is the customer need state or the drive that brings the customer to shop the store.

RAGHU: And that also tends to influence what we call internally as scan rate.

RAGHU: And like you mentioned, different folks have different ways of referring this number.

PAULA: Yeah.

RAGHU: One thing that has happened is the pandemic has accelerated the blurring of the lines between convenience, grocery, QSR, you name the format of this.

RAGHU: And as we have worked through that, we have seen a spectrum of use cases.

RAGHU: So for example, we measure not, you know, what we go by is not just the scan rate, which I mentioned, but also based on if we have seven rewards members, what percentage of our customers adopt our digital services.

RAGHU: So more than looking at, for example, there might be a customer segment that makes the unexpected, unplanned quick stop, and they come into a 7-Eleven.

RAGHU: And they may not be the person, they may not be the customer who is a habitual 7-Eleven customer.

RAGHU: And which is fine.

RAGHU: And our effort is to ensure that we provide the great level of safety value convenience in the store, a delightful shopping experience, so that we get them as a 7-Rewards member.

RAGHU: Ahead of that, for folks who are already part of the 7-Rewards loyalty program, we want to look at how can we make their shopping experience even more delightful with the digital services.

RAGHU: So the second level of metrics that we look at is how much engagement do we see of our customers across the ecosystem.

RAGHU: So that gives us a good feel for what is the customer seeking in terms of whether the feature is resonating, is that something part of what they expect as they enter 7-Eleven?

RAGHU: How should we morph it?

RAGHU: And when we do all of that, we move the broader metric up, which is we learn more and more about 7-Rewards customers and more customers sign up for the program.

PAULA: Wonderful.

PAULA: Yeah.

PAULA: And would you give us a range in terms of the scan rate?

PAULA: Are you happy to give us at least a target that would be a good result?

RAGHU: Given that good fraction and a predominant fraction of transactions are cash transactions.

RAGHU: We aspire to be upwards of 60-65% of customers using the app.

RAGHU: Are we there?

RAGHU: We aren’t there.

RAGHU: We are working our way there.

RAGHU: But it’s almost as much as we want to ensure that 100% of non-cash transactions are 7 rewards.

RAGHU: That’s kind of our always aspiration.

PAULA: Nice.

RAGHU: Because we want to ensure that customers can shop the way they want.

RAGHU: We can’t force the customer to change behavior.

RAGHU: I certainly don’t aspire to do that.

RAGHU: But to the extent the customer can use the ecosystem, what we call eligible customer, we want to ensure 100% scan rate.

PAULA: Oh my goodness.

PAULA: Well, I love the ambition, Raghu.

PAULA: I mean, you might as well set the target at 100%.

PAULA: Why wouldn’t you?

RAGHU: Like I said, easier said than done.

RAGHU: But if you don’t set the target at 100%, not making progress.

PAULA: Of course, of course, yeah.

PAULA: Set the bar high.

PAULA: And you referenced something earlier as well, Raghu, which I didn’t get a chance to pick up on, but it was the whole idea about engaging with the customers when they’re outside of the store.

PAULA: I’d love to get a sense of what you meant by that, because again, the amount of time that any of us spends in a 7-Eleven store in our life is obviously a very small proportion.

PAULA: So how do you aim to connect with people when they’re outside of your stores?

RAGHU: One of the things, Paula, that we at 7-Eleven, what we started way back in 2017-2018 timeframe is a diligent thought to the evolving customer need around delivery.

RAGHU: Because customers want to be served not just in store, but want to be served where they are, when they are, whatever products they want.

RAGHU: And if you take a look at our footprint in the US and it applies across all countries where we are mostly, in the US.

RAGHU: 50% of US households are within a couple of miles from a 7-Eleven.

RAGHU: And that’s just an amazing number to go by.

PAULA: Yeah, amazing.

RAGHU: Which then puts us in a position to be one of the closest to the customer to get the products in the shortest possible time, which is what led to engaging the customer in our delivery service, which is called 7Now.

RAGHU: And as part of the service, customers can place an order, not just from their home, but from wherever they want.

RAGHU: We have something called 7Now Pins, which can deliver to beaches, parks, and so on.

RAGHU: But essentially, customers can order what they want from a 7-Eleven, and we get the products to them whenever they want and 24-7.

RAGHU: As we are one of the very few available options, 24-7 for whatever the customer needs are.

RAGHU: And that is what is…

RAGHU: The aim is to serve the customer in their ecosystem, not necessarily when they are in the store, but wherever they are.

PAULA: Oh, my goodness.

PAULA: I love that Pins concept, Raghu.

PAULA: I had seen it actually in some of the material you sent me before our call today.

PAULA: And even I think it mentioned, as you said, parks and beaches, but also like a park bench.

PAULA: You can literally say, I’m here, I’m thirsty.

PAULA: Can you send me my coffee or my Slurpee?

PAULA: I just think that’s incredible capability.

RAGHU: Yeah.

RAGHU: And the way things are going, as you see around, I think it is not too far away that that delivery is going to be done by a drone.

PAULA: Yes.

RAGHU: No matter, it could be in the middle of a lake boarding and then maybe we can make it happen.

PAULA: Oh, my God.

PAULA: Super exciting.

PAULA: So I suppose the final piece that I wanted to talk through today, Raghu, was first of all, just really to congratulate you on last year’s Loyalty Awards that you won and then this year’s Loyalty Award, which you won literally yesterday.

PAULA: So we’re recording at the end of October.

PAULA: I think this show will be aired in November.

PAULA: So many of the listeners may already be aware, but I did see.

PAULA: So in 2020, you guys won the Customer Loyalty Strategy Platinum Award from our friends in Loyalty 360.

PAULA: So again, just to get the top award in what probably is the most advanced loyalty market in the world for Customer Loyalty Strategy.

PAULA: You must have been already extremely proud.

PAULA: And then tell us what you won last night at the 2021 awards.

RAGHU: No, first of all, thank you, Paula.

RAGHU: We’re very excited and again, once again, humbled to be recognized in the best of class category there.

RAGHU: Last night, we won the Platinum in the Technology and Trends category, following up on what you had just mentioned from last year.

RAGHU: And super excited about how the customers see the program landing with themselves and the advocacy that we get.

RAGHU: And we also won the category in Mobile First Convenience.

RAGHU: Both of them, again, I go back to where we started this, all which is NPS.

RAGHU: When the customer advocacy is there, and then a lot of these things are good to see along the side as we continue to evolve for the customer.

PAULA: My goodness.

PAULA: Well, it’s fabulous to see the recognition coming through, Raghu.

PAULA: I’m sure there’s massive celebrations happening in 7 Eleven head office and throughout the US for that extraordinary award.

PAULA: So I think that’s actually all the questions I had, Raghu.

PAULA: I’m thrilled at the timing, as I said, the fact that you literally won that award yesterday, thrilled with the opportunity to hear about this 55 million member base and all of the extraordinary innovation that’s coming through from 7 Rewards.

PAULA: So is there anything else that you wanted to add from your side, Raghu, before we wrap up?

RAGHU: No, I would just, you know, this is, loyalty is a very interesting, exciting and challenging topic or journey, not just for us, but I suspect for every retailer there, not just retailer, for everyone out there.

RAGHU: And there’s just continuous learning and I’m, you know, it’s good to be in that mode of learning and serving the customer.

RAGHU: So it’s great and I appreciate Paula for having this, giving me the opportunity to have this dialogue.

PAULA: Wonderful.

PAULA: Wonderful.

PAULA: So without further ado, I will just say thank you and a huge congratulations to Raghu Mahadevan, Chief Digital Officer at 7-Eleven.

PAULA: Thank you so much from Let’s Talk Loyalty.

PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.

PAULA: The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.

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