Thursday, September 29, 2011

Will Free Coffee Payout For 7-Eleven?

9/29/11

Apparently September 29 is National Coffee Day.  (Who knew?)  In honor of the event selected 7-Eleven stores will be offering free medium-size coffee from 7 a.m. – 11 a.m. (Irwin, 2011)
Free is a good deal for consumers – who will be saving an average of $1.50.  But does it work for 7-Eleven?  When you go for your free coffee will you buy something else too?  And perhaps more importantly, will you become a regular customer of 7-Eleven going forward?

Irwin, T.  (2011, September 27).  7-Eleven Offers CofFREE Day, Facebook Game.  mediapost.com.   Retrieved September 28, 2011, from

14 comments:

  1. If there was a 7-Eleven near my house I would try it once in a while but not sure about becoming a regular customer. Firstly, the entire concept of 7-Eleven has diminished with the passage of time in NY. I barely come across a 7-Eleven in my neighborhood at least. Plus, coffee is a habit forming product. I am used to drinking a certain type of coffee and I know I am over-paying but it has become a part of my routine. Wake up before class, go to Starbucks across the street and purchase my coffee. I wouldn't want to change my routine to save money. If that was the case, I would walk another block and get a cheaper coffee at Dunkin Donuts or McDonald's.
    Personally, its a mindset and a habit that would take a lot out of to me change it, specially in the mornings.

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  2. I'll agree with Anushey;

    I'm VERY loyal to my morning coffee routine ("Quick Chek") While a free cup is definitely tempting, I'm not any more or less likely to go to 7/11 for it. Additionally, if I was there, as I have been known to frequent free slurpee day (7/11 every yr) in the past, I'm not any more likely to purchase something with it. People who were going for lottery, cigarettes, and the daily paper however, might have opted to make these purchases at 7/11. I've already mentioned "Quick Chek"- a local Jersey chain. They run a special where a breakfast sandwich is 99 cents with the purchase of a coffee. Something like this is more likely to get me to become a repeat customer, than a single "Free" incentive day. My feeling is that if I'm going to be spending the money anyway, I'd much rather get everything I need for "less" in the one stop, rather than running all over.

    -Josh

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  3. Considering I am in love with 7/11 (I didn't even know NYC had them!), I would for sure go for the free coffee but the chances are, I would buy a muffin or some sort of breakfast while I was there. If I think about how I'm saving a dollar or two, then I figure I can take that dollar or two and buy a breakfast item but still get my coffee. I say this because I come across a similar situation with 7/11 in the Summer. On July 11th (7/11) every year, 7/11 has free slushies to honor the special date. My friends and I will go and get our free slushies thinking how awesome it is that they're free...but then we'll buy some sort of snack or treat while we're there as well. We wouldn't just go to 7/11 on a regular basis and buy a snack so I guess by giving away slushies, they got us to buy more. Either way, slushies are delicious and I'm going to keep going on July 11th!

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  4. I never knew that September 29th was such an esteemed American Holiday, but it sure makes sense when you consider that the U.S. is the No. 1 coffee-consuming country in the world!
    As for the question at hand: Will Free Coffee Payout For 7-Eleven? Well, I guess you must first determine what constitutes “payout.”
    If you believe “payout” means, according to the anonymous 7-Eleven Spokesperson in the piece, that, basically, promoting free coffee at “select” locations on one single day of the year will help to double 7/11’s current market share in coffee consumption, then no.
    But, if you think “payout” is really just a clever way of reminding people that 7-Eleven sells coffee while saying “thank you” to their current customer base (per 7-Eleven VP Nancy Smith), then yes.
    Anything that is “free,” especially in this recession-laced economy, is a nice gesture. And people respect that. And evidently, hot water, coffee, cups and International Delight Coffee Creamers are not so menacing an investment to succeed in said gesture.
    Of course, I understand that this campaign would not influence me in anyway, for I commute on a train and am not exposed to the radio enough. I think this was, and if not, should have been 7-Eleven’s primary mode of advertising. Of course, I have done no research into the matter, but I would imagine that their target market primarily commutes by car, i.e. residents of the outer boroughs, suburbs, metro areas, etc.
    And I was never once exposed to any store signage or events, nor publicity, nor their “Dip-a-Drip interactive game on Facebook.”
    If I were a working class car commuter, having to stop for gas frequently (many 7-Eleven’s sell gasoline), being exposed to their radio announcements at least 7 times – I think I could see myself stopping to get my medium cup o’ Joe! And I suppose I would buy a lottery ticket, or a pack of cigarettes, or gum, or a banana, or a bottle of water while I’m there too. Perhaps I would even fill up the tank!

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  5. Ah, yet again, another shtick which has such a habit of crashing and burning. I always love pointing out that if the consumer stands on line for more than 12 minutes for a $1.50 cup of coffee, they’ll be making less than minimum wage for their efforts. Time is money, and this isn’t a lot of money.

    Note – a gigantic turnout would not necessarily be a good thing! I guess the most (in)famous example of free giveaways gone wrong would be the Great Oprah Chicken Calamity of 2009, where giving out free coupons for Kentucky Fried Chicken’s Grilled Chicken option caused multi-hour long lines, and even riots and sit-ins at participating (and non-participating) restaurants(1).

    We are seeing similar problems in the Daily Deals industry, led by Groupon, and their negative impacts on merchants. Small businesses are seeing both short-term negative impacts(2) of offering coupons and even long-term negative impacts(3).

    At the end of the day, it seems like the biggest value companies get from this is not the additional consumers which end up being loyal customers, but the free PR that such mass promotions generate. Even the negative disasters may be able to be spun positively (“People demanded our [free or heavily discounted] product so much that there were riots! We’re awesome!” is pretty easy). While I’d say coupons have their place, this probably isn’t one of them. Most people are going to be too attached to their particular coffee, or simply stuck in their routine to change, and coffee isn’t exactly very price sensitive, as there is already a very wide price range, from the local deli, to getting some fancy Clover brew at Starbucks. One free coffee is not going to be decisive in the fight for many customers.

    (1) Nolan, Hamilton. "Oprah KFC Coupon Riot!." Gawker. Gawker, 6 May 2009. Web. 2 Oct 2011. .
    (2) Vacanti, Vinicius. "Is Groupon Bad For Small Businesses?." TechCrunch. AOL Inc., 2 Jul 2011. Web. 2 Oct 2011. .
    (3) "Groupon's Hidden Influence on Reputation." Technology Review. Massachusetts Institute of Technology, 12 Sep 2011. Web. 2 Oct 2011. .

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  6. I'm already a loyal 7/11 customer, though not for their coffee; they do not have to market to me, as I will keep coming to their store for other products, and have no interest in coffee at all.

    However, I have serious doubts that this will do anything to increase their clientele; the customers that are entering the store knowing what product they will buy (like me) do not need coffee to convince them to keep making purchases at 7/11. The people who will actually show up for the free coffee are aware that while this is a nice gesture, 7/11 will go right back to charging full price for coffee. Unless the coffee is just so ridiculously amazing that getting a free taste of it will convince people to always get their caffeine fix at 7/11, there's really no point. And their coffee is just a bit short of "ridiculously amazing."

    Furthermore, I don't really understand the need for a publicity stunt like this, the benefit of which I can only see in public exposure of a relatively unknown joint. Which 7/11 isn't.

    In short, I believe this will have no effect on either loyal customers, who will keep returning (coffee notwithstanding), or people who normally purchase coffee elsewhere.

    -Anya Bochman (I couldn't figure out how to comment with my name! Maybe I need some 7/11 coffee)

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  7. I didn’t know about 7/11’s promotion until I read the post and for me this was their big mistake. The company didn’t communicate it effectively. If they want to double the number of cups they normally sell each day I assume they need to motivate new consumers and their communication was directed mostly for their today’s consumers.

    But once you are exposed to the message and have a 7/11 nearby I definitely would go there and I am sure I would buy something else.

    I think they could make the National Coffee Day the same action as they have being doing with 7/11 in the Summer when you get a free slushies as Cassie said mentioned.

    Renata Ribeiro

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  8. I feel offering a free taste to a new customer is a great way to showcase your product, but the whole point is to convert that new customer into a regular customer. Personally, I am not much of a coffee drinker so I wouldn't go especially for that free coffee, however if I was around a 7-Eleven and I knew about the promotion I might have tried them out.

    As the article mentions that US has the largest consumption of coffee I feel this is a great way to entice the coffee consuming population. If you love coffee you might as well try 7-Eleven out and see what they have to offer. You won't have anything to lose anyway.

    Now would you buy something else as well while having the free coffee really depends on how good the free coffee is. If the coffee itself doesn't taste so "good" I don't think people would want to spend money on something else. The initial reaction to the coffee would really decide on the extra purchase.

    I feel the CofFREE campaign was a success in a way because it's got us talking about it, but would we really go and buy that cup of coffee?

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  9. Though I might go in for the free coffee on that particular day, I don't think that this promotion will really gain 7/11 more regular customers. Its important to remember, 7/11 is a convenience store...people going out of their way to go to there defeats its purpose. 7/11, I think, would obtain customers based on the convenience of its location, not its coffee. If starbucks was doing this promotion, maybe it would be different...people go to starbucks and pay a premium price for its good coffee... if you gave it to them for free, maybe they'd try a starbucks cookie, really like it and buy it again the next time along with the coffee. People go to 7/11 to pick up a quick snack, maybe some gum...the same usual snack or gum they could buy anywhere else, probably something they've had 100 times before... if its in an easily accessible location, maybe there's a gas station too, then people will go in...but if another store is more convenient 7/11 will ultimately lose out because they sell the same product at the same price...one day of free mediocre coffee won't change that.

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  10. Even if I had known this event, I wouldn't have gone there. Because a dollar fifty cannot make any differences when I choose my coffee. If starbucks did the same event, I would be there for free coffee, which means a brand should focus on their own specialty. Therefore, instead of free coffee, 7/11 should have focused on what they can do better than any other. "Quick and less expensive".
    If they really want to have a event with coffee, they can collaborate with well-known coffee brands such as Think coffee, Aroma coffee, Stumptown coffee and so on. They could sell bottled coffee of those brand-named coffees to customers who don't want to wait long for a cup of coffee. Then 7/11 can have regular customers more than before.

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  11. I didnt know anything about this event , and I think 7/11 concept it's not about the cofee it's about getting the esential thing easier, cheaper and faster so they should do a promotion focusing in those stuff.

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  12. 7 11 coffee is pretty good and I would probably have stopped by for a free cup if I could have.
    There might have been something else I would have bought with it.

    7 11 is a convenience store - in Manhattan - everything is convenient, so it might not have been appreciated as much as in other parts of the country.

    Everyone likes free stuff and I'm sure their sales went up for a short while. The importance is to keep their name out there and remind the public they are still here.

    Susan

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  13. The only times I have ever consider going out of my way for a free coffee is when Starbucks has run ads on nytimes.com homepage for a new brew. I unfortunately have not yet been able to observe National Coffee Day. I am in close proximity to Starbucks at home and school, and honestly, I have never seen a 7-11 in the city, so why would I seek out a 7-11 for this sole purpose.

    I used to live in Denver and 7-11's were everywhere. 7-11 served as a late night hangout for kids and a place to grab a pack of gum when driving by. I never have associated coffee with 7-11.

    You can't get any better than free, and for those that live around or frequent 7-11's this promotion would make sense. Sadly, I don't think I will be celebrating National Coffee Day at 7-11 this year or any of the NC Days to come.

    Ben K.

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  14. I do not think that this is a good promotion for 7-Eleven. It is great for their current customers but I don't believe it will promote future sales. If a non 7-Eleven customer goes to a participating store that day for the free coffee they will likely just go in and get the coffee and leave. They already have there mind set on going to get a free cup of coffee and that's it and not spending money on anything else. But if they do end up buying something it would most likely be in low cost and a small amount.

    Even if the new customer has a positive experience receiving the free cup of coffee, I do not believe that he or she will be a repeat customer. Like many other people have already stated, 7-Eleven is a store of convenience so if it is not in the path of the customers daily routine they will not return. Unless 7-Eleven starts to offer free coffee everyday.

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