Want More Loyal Customers?

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Four dispensaries share how they reward repeat patrons with perks—from discounts and penny ounces to major events.

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August 10, 2018
Jolene Hansen
Cannabis Dispensary Illustration

Competition for dispensary dollars isn’t cooling down. With online ordering and home deliveries becoming more popular, your circle of competitors keeps expanding. Will your customers love you or leave you? That may depend on your answer when they ask, “What’s in it for me?” Help can come in the form of a loyalty program that makes customers happy and your business profitable.

Cannabis Dispensary reached out to four dispensaries with loyalty reward programs. Here’s an inside look at what they offer and how they make customer loyalty work for customers as well as for their businesses.

Silver Stem Fine Cannabis, Colorado

Annalise Dean, Store and Social Media Manager

Program type: Visit- and spend-based

As manager of Silver Stem’s largest location and social media manager for the company, Annalise Dean oversees customer rewards for Silver Stem’s five Colorado dispensaries. The company is big on loyalty, and customers are big on Silver Stem’s program. “Our customers are earning lots of rewards,” Dean says.

What it offers:

Silver Stem’s loyalty program embraces visits and dollars spent. Members earn 30 sign-up points and 20 points per check-in. Instant redemption yields free branded lighters or rolling papers, but most members accumulate points toward prizes that range from edibles and merchandise to cartridges, resin and flower.

State regulations prohibit cannabis “gifts,” so many rewards have a penny price attached. “The most coveted prize is the ounce for a penny,” Dean shares. Members with 420 points get a penny ounce of the in-stock flower of their choice.

Spend-based rewards start with a 15-percent sign-up discount and continue with a 5-percent store credit ($10) for every $200 spent. On their birthday, members receive a pre-roll for 1 penny—no additional purchase required.

The enrollment process:

Silver Stem works membership into the checkout process. To register, customers enter their names, phone numbers and emails on an iPad. Staff encourages tourists to enjoy the benefits (and future marketing messages) as well. Existing members check in on the iPad by phone number and can view available points.

“We do suggest that our members save their points, because the penny ounce is the best deal rewards-wise,” Dean explains. “But it’s really good for people that are broke or out-of-towners to use them right away.”

Silver Stem hopes to enroll 90 percent of its customer base in its rewards programs; it currently has 70 percent to 80 percent enrolled, according to Dean. “Most people that don’t want it are still kind of afraid of having their number in a system somewhere,” Dean says. Staff work to ease those privacy fears.

Tools and tech that help:

Silver Stem simplifies tracking visits and buying habits with Flowhub point-of-sale (POS) software and Baker Technologies’ rewards platform. Members can check points at any location, and budtenders can view purchasing history to identify that awesome strain a member bought during their last visit.

“It’s a great way for us to know what our customers like,” Dean says. The system also provides fuel for targeted marketing texts, so members who prefer edibles get edible-related texts instead of messages on things they don’t like.

Why it works for Silver Stem:

One bonus at Silver Stem is the sense of family and friends its loyalty program fosters. Staff’s favorite days are when regulars come in—with extra-big smiles—to claim their penny ounce. “We definitely make a really big deal out of it, and we celebrate. We’re really big on high-fives,” Dean says. “[People] have a good experience and trust us. They tell their friends and family.”

Southwest Patient Group, California

Jay Araiza, Chief Communications Officer

Program type: Visit-based

Like many elements of California’s evolving cannabis industry right now, dispensary loyalty programs are getting makeovers to suit regulations. Southwest Patient Group’s (SWPG) long-standing loyalty program that rewarded visits and spending at its San Diego location serves as an example. The company had to end the program, and a transition program is in place. Chief Communications Officer Jay Araiza says a more permanent solution is currently being developed.

What it offers:

“We’ve always had a very unique, very popular loyalty rewards program,” Araiza explains. Under the old plan, every 15 visits, patients received a credit equal to their average per-visit spending during that period. Credits from $20 up to $500 were common. “People came to us because of our retention program,” Araiza says. New regulations that prohibit “gifts” ended the program’s run.

Members now receive a 50-percent discount every 15th visit, with no limit on the purchase amount. SWPG is still exploring options to work with new laws and simplify the program. “We also want to scale it back, because it was really good, but we were losing a lot on some of those visits. But the retention was there!” Araiza says.

The enrollment process:

SWPG’s membership program doesn’t require formal opt-in. Anyone entered in the POS system qualifies for rewards via the information the dispensary was required to gather by the state. While the old program was popular, members are warming up to the new structure.

“Some of our [longtime] patients have questioned our new policy and the changes to our previous format, but they’ve been understanding with the changes over time in the industry,” Araiza says. Members are buying more on their 15th visit, too.

Tools and tech that help:

SWPG’s POS system tracks visits and purchases, but all averaging and reward calculations were performed manually until now. Araiza feels SWPG’s attachment to its old program, which standard loyalty software didn’t accommodate, was the biggest hurdle to utilizing badly needed automation.

Now, ready to move on, the company is reviewing several cannabis-industry platforms—and leaning toward a points-per-visit program to encourage members to return more often. Automation will improve accuracy and reduce administration costs.

Why it works for SWPG:

“From the marketing standpoint, [a loyalty program] is a must-have tool, especially in this day and age when the customer has all the power to [shop around for] products and services,” Araiza says. “People can be more picky about where they go. As a business, you need to offer something that makes them want to come back to you.

“Overall, our main thought is we want to see good retention of our customer base. [With a loyalty program], you really get to know your customers—what they like, how frequently they come, how much they spend. From a customer standpoint, it shows you value them. They feel cared for,” Araiza says.

The+Source, Nevada

Dan Zarella, Director of Marketing

Program type: Spend-based

Insights driving The+Source’s customer loyalty program come from hundreds of in-store interviews conducted by Director of Marketing Dan Zarella at the company’s two Nevada locations. The result is a “super-duper simple” program that keeps rewards easy for customers and staff.

What it offers:

The+Source loyalty members earn one point for every dollar spent. Twenty-five points earns $1 in store credit. Members can earn and redeem points on any product instantly or after points accumulate. Points transfer between the company’s Las Vegas and Henderson locations. No black-out days or minimum thresholds for redemption exist. Zarella says that state regulations prohibit giving away products, so a minimum purchase is required.

The enrollment process:

Zarella’s in-store research yielded some unexpected insights. “One of the things that really surprised me, honestly, was how excited people were for the rewards program,” he says. Though current stats aren’t available, he says program participation historically has been high.

Recently streamlined, enrollment is simple. Customers text “REWARDS” to a designated phone number to register. Once in-store, staff verifies age and other essentials, and new members can opt-in to emails and texts. Future check-ins require ID—no extra loyalty cards. Customers can check their accumulated points in-store.

Tools and tech that help:

With a simple program, Zarella doesn’t believe extra technology is crucial to success. “Basically, every point-of-sale system I’ve seen in the industry can do our style of loyalty program,” he says.

The spend-based program wins out over visit-based rewards for member ease, Zarella says. “I think the customer experience is a lot more seamless with a dollar-based point system because it’s just in the POS system. There’s no extra process to check in,” he explains.

The most important “tool” for the program? The+Source staff. “Your staff is your best and first line of communication with your customers,” Zarella says. The+Source budtenders motivate customers to enroll by explaining the program’s value—and it helps when customers see members claim rewards.

Why it works for The+Source:

“The primary benefit [for us] is that we’re encouraging people to be loyal return customers,” Zarella explains. “Rather than go out and get a bunch of new customers, we’d really love to learn how to suit our existing customers so well that they go and tell 10 of their friends about the loyalty program.”

“At the end of the day, what really matters isn't the technology. It's: Are you listening to your customers and are you trying to give them what they're looking for? The technology is just a way to do that,” Zarella says. “I don't think you need a ton of it. I do think you need to care."

Green Lady offers visit- and spending-based rewards programs. It has nearly 6,500 members between its three Washington state locations.
Photo courtesy of Green Lady

Green Lady, Washington

Mike Redman, President

Program type: Visit- and spend-based

Green Lady has experimented with different types of loyalty programs over the years. “We’re always the guinea pig for tech companies. It’s kind of an interesting place to be, but we like it,” President Mike Redman says. The company offers two programs in its three Washington locations.

What it offers:

Green Lady’s primary program rewards spending. Members earn 1 point for every $1 spent, and 100 points yields $5 credit. “That rewards them for regular shopping and kind of gives a volume discount,” Redman explains. Loyalty members also receive a 10-percent birthday discount.

Visit-based rewards focus on customer satisfaction “with a little bit of loyalty and retention thrown in.” At every 10th check-in, members earn a variable discount. Each check-in allows the opportunity to share requests or concerns. “If there’s something they want to see or something they’re not completely satisfied with, it gives them that interface with us, so the managers and owners can see everything at the sale level,” Redman says.

That’s not all. Green Lady throws two members-only parties a year, one for 4/20 and one for Halloween. (Think bands, food trucks, costumes, fire dancers and trapeze artists.) The last bash drew about 400 people, according to Redman.

The enrollment process:

Loyalty sign-up stays simple and, for those who want it, anonymous. Budtenders enroll members based on a name and phone number, real or fictitious. “They can have anonymity if they want,” Redman says.

Green Lady also lets members decide whether product preferences are tracked. As an incentive, members who opt in receive targeted text and email blasts with flash deals.

“In the beginning, [customers said] ‘Absolutely not!’ [to having product preferences tracked]. Now with cannabis legal in most of the country in one way or another, people are more comfortable. It becomes like their [grocery store] membership card,” Redman says. “By tracking preferences, we can make recommendations on strains they might like. If they have a request, we can track that [product availability] as well.”

Loyalty membership totals around 5,000 between Green Lady’s two Olympia locations, with another 1,500 members from its Lynnwood store.

“[Loyalty] really comes down to customer service. If you're using a good POS system, it makes you stand out more as far as service. It’s an important thing.” Mike Redman, President, Green Lady
Tools and tech that help:

Cannabis retail software keeps loyalty easy and efficient. “We use Cova for our in-store loyalty, all of our front-of-the-house point-of-sale, and for tracking all of our customer interface,” Redman says. The customer-satisfaction program uses the Baker platform.

Redman recommends a POS system with loyalty-program functionality that can track preferences and reward volume spending. “If they spend a bunch more on product, they should get kind of the ‘Costco price’ instead of the convenience store price," he says.

Why it works for Green Lady:

“[Loyalty] really comes down to customer service. If you're using a good POS system, it makes you stand out more as far as service. It’s an important thing,” Redman says. “Customers don't really know the nuts and bolts of the technology that we use, but … we're able to offer real-time information as far as strains they like and analytics.”