Have you thought about or invested in this cannabis customer loyalty before?
Do your patrons come back to visit you often and make purchases regularly? If so, then congratulations! Your business is likely doing well.
What if they don't seem to be returning or buying from you as much as they used to?
That could mean that there is an issue with customer loyalty.
Cannabis customers have become increasingly more selective about their dispensary choices over recent years due to increased competition among dispensaries in legalized states and a result of legalization itself.
In this blog post, we answer six critical questions from retailers on cannabis consumer loyalty so that you can better understand how to create a loyal following for your business.
What is Customer Loyalty & Why Does It Matter for Cannabis Retailers?
Customer loyalty is defined as an emotional bond between a customer and a brand.
It matters for cannabis retailers and dispensaries because businesses that can create loyal customers earn higher sales.
Studies have shown that nearly 50% of people spend more on brands they're loyal to. Gains in customer retention can result in 5x increases in profit or more.
Here's a few examples of how to start thinking about customer loyalty:
- The perception of a product or brand delivering on its promise (e.g., "I was promised that this marijuana would make me feel relaxed and happy, but I don't feel anything")
- The satisfaction of customer needs (e.g., "This dispensary has the best deals in town!")
- A shared understanding between consumer and retailer about quality standards (e.g., "This dispensary hosts local California growers - and they always deliver ahead of schedule!")
Cannabis retailers try to influence customer loyalty with marketing methods, such as loyalty cards that provide discounts, reward points, or other incentives in return for customer purchases.
Additionally, dispensaries can also build their brand by constantly improving the quality and variety of on-site products and offering a great selection of flower types and strains.
Why Should I Offer Discounts on My Products?
Dispensaries should offer discounts as a way of letting customers know they value their business. It also helps to increase loyalty.
Offering discounts for continued patronage will help encourage loyal customers who might go elsewhere because of competitors' lower prices.
Many retailers offer discounts for first-time patrons or via a loyalty reward system. Another way is to personalize deals to customer interests.
Personalized discounts signal to customers that a retailer cares about their preferences and interests. It also helps them feel valued as an individual customer instead of another transaction.
Experiment with different types of promotions until you find what works best for your business!
Be sure to offer these promotional deals and follow through on delivering them too – this will encourage more repeat buyers.
How Do You Get Customers to Be Loyal to Your Dispensary?
There's plenty of methods for creating customer loyalty. Let's dive into some of your options.
Retailers can reduce prices for customers that refer new clients to the dispensary or provide social media reviews about your business.
As previously stated, you can also offer deals and discounts based on customer interests, perhaps exclusive products only available at your store.
Increase the accessibility of cannabis goods to cater to specialized needs - such as offering cannabis-infused drinks or other edibles not found elsewhere in town.
Of course, one of the most important is providing a stellar customer service experience.
Suppose your dispensary doesn't have an in-house customer service team and only does delivery. In that case, you can still provide excellent customer service by answering questions via email and phone calls promptly.
Marketing also plays a role in cannabis customer loyalty. If consumers think a dispensary's online presence is questionable or lackluster, that may detract from their brand loyalty.
After all, in the digital age, social media presence and impressions matter, even for businesses.
Dispensaries can also invest in a loyalty program.
However, they should evaluate the advantages and setbacks before purchasing.
What Are The Pros & Cons of Dispensary Loyalty Programs?
The industry generally views loyalty programs as a popular tool for dispensaries. However, it's essential to consider their benefits and disadvantages.
The pros of loyalty programs are that they offer incentives, rewards, and benefits for cannabis consumers.
Essentially customers might see a loyalty program as an exciting way of getting a discount from the retailer.
It also could help influence consumers into opting-in to receiving marketing.
However, the cons of these programs lend to their efficacy in retaining customers or encouraging more purchases.
Dispensary loyalty programs don't create more loyal customers.
Here's the data to prove it.
Although these programs did influencer higher customer ticket orders, they did not affect purchase frequency whatsoever.
Our study showed no sizeable impact on the latter.
Essentially, what resulted from the latter is financial depreciation due to cannabis loyalty programs.
Loyalty-related discounts, without more frequent orders, caused dispensary owners to lose money!
So, think twice about deploying a loyalty program.
Should I Have A Cannabis Rewards System for Frequent Purchases or Referrals?
Cannabis rewards systems are great for referrals. However, we'd recommend pursuing other marketing technology for making customers order more often.
Influencing order frequency depends a lot on personalization, which is why loyalty programs often fair. Their infrastructure is too general!
Personalized marketing inspires customers to order more. So, choosing technology that helps you achieve that should be a priority.
Is There an Advantage in Using Apps or Websites to Track Customer Data?
Absolutely! The faster you can mobilize data you collect - via POS or otherwise - into your marketing strategy, the easier it will be for you to personalize all communications.
Fortunately, tools like Polaris enable retailers to streamline that process via data-driven text campaigns, which would otherwise take a ton of time for most dispensary marketing teams.
Don't forget about delivery personnel or budtenders either! There are also considerable gains to be made in using data for customer service-related business operations.
Using data to measure service-related metrics is a great way to determine improvements to how your dispensary influences customer loyalty.
Individual sales performance, delivery radiuses, marketing campaigns, and product combinations are a few data sources you can use to improve cannabis customer loyalty.
Supercharge Your Loyalty Marketing Strategy Today
In this blog, we answered six common questions that are relevant to cannabis customer loyalty.
If you've been wondering about the value of discounts, data, and whether your business should approach a loyalty program, we hope this has helped clear things up for you!
It comes down to the tech, strategy, how you use your data - and we can help.
Happy Cabbage is a data-driven marketing tool for dispensaries that help them deliver personalized, high-impact marketing and improve business operations.
Your dispensary needs to grow and evolve with its customers – not the other way around!
We'll give you all of the information you need about your customer base so you can take the guesswork out of marketing decisions.
Schedule a demo with us today.