As cannabis marketing specialists, we’re often asked by clients if cannabis business loyalty programs are worth instituting.
Evidence and our own anecdotal experience seem to point to the affirmative. Especially in this day and age when so many people feel that they’re merely consumers being pulled in multiple directions.
And with the cannabis industry getting more and more saturated, there’s plenty of directions for them to be pulled.
Thus, creating a loyalty program is a great way to make a more personal and lasting connection.
The Benefits of Cannabis Business Loyalty Programs
There are any number of ways to implement a customer loyalty program.
You may have a system in place where customers can earn points for posting about your products on social media platforms. Perhaps it’s a gift card program whereby customers receive a discount when they purchase a gift card. It could be something as simple as giving customers points for referrals.
Whatever the case, if you’re considering a customer loyalty program for your dispensary or other cannabis business, there are many ways it will benefit you. Four of the biggest advantages are:
Generating New Leads
Customer loyalty programs that set you apart from other dispensaries are a great way to entice new customers. They’ll be interested, right out of the gate, in taking advantage of the specials you offer.
Increasing Customer Spending
Have you ever gotten a free coffee drink after purchasing that tenth drink at your favorite café? Since the drink was free, maybe you added a food item or treated yourself to something you normally wouldn’t buy.
Cannabis customers are no different. Those who are part of a loyalty program tend to spend more per visit. This may also be due in part to their trying to earn their incentives.
Ability to Analyze Customer Info
On the pure information level, offering a loyalty program is an important means for collecting customer data. When interested customers sign up, you’ll have access to their contact information for re-marketing purposes.
Furthermore, you’ll be able to better determine which products to promote and to put on your shelves when you use the data collected from your customer loyalty program.
There’s no arguing that in the business world, a loyal customer is priceless. Converting and then retaining new customers in the highly competitive cannabis industry is a feat, to say the least.
Offering existing customers ongoing insider deals and the promise of staying in the know is a sure-fire recipe for keeping them coming back.
Research Bears Out Value of Loyalty Programs
Putting a loyalty program into play isn’t free, of course. While it may not cost you much (if anything) up front, it does cost money to give customers discounts or points toward future purchases.
But the vast majority of dispensary owners agree that it’s well worth it. After all, as the old saying goes, you have to spend money to make money.
According to figures from Seattle-based marijuana analytics firm Headset, around 50% of cannabis stores in Washington state have instituted a loyalty program.
In studying a 90-day period, they found the average basket spend was about 13% larger than the average spend at retailers without a loyalty program in place. Costumers typically had more items in their baskets, as well as slightly higher priced product.
Meanwhile, another dispensary in Las Vegas uses its loyalty program to sign up new customers both in Nevada and from out of state. Nevada residents receive extra benefits though.
All participants in the program get reward points with purchases and receive text-message notifications about daily deals. But only Nevadans get a special 20% discount on regularly priced product and special promotional prices.
Customers like being in the loop and enjoy the feeling of being valued and appreciated. Meanwhile, the dispensary is able to retrieve valuable information about the customer and his or her buying habits.
A happy customer is a returning customer.
Are Cannabis Business Loyalty Programs in Your Future?
When looking to start cannabis business loyalty programs, first determine your goals and find out what your customers want. Start small, keep it simple, and announce the program early.
Then incorporate unique and personal incentives, while engaging them with regular text or email reminders. Try to keep it fresh and keep measuring your ROI.
And if you’d like some assistance in this process – along with other marketing strategies you may want to incorporate – contact us today.
Utilizing our expertise, we’ll ensure you have the right strategy in place to succeed.