3 Tips for Building and Utilizing Loyalty Programs

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How dispensaries can leverage loyalty programs to build their customer base and improve their bottom line

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March 13, 2020

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Loyalty programs have long incentivized customers to continue shopping at their favorite retail locations, but what about cannabis dispensaries? With so many new dispensaries opening, can you encourage your customers to choose you using rewards? The short answer is, yes. In fact, it can be one of your most effective marketing tools, if done right. There are several efficient ways to do it without spending a bunch of money or giving away product discounts at the register. Here are three key tips for building and effectively utilizing your loyalty program.

1. Incentivize Your Customers To Sign Up For Your Loyalty Program.

Signing up for a loyalty program can be annoying and time consuming. Without the right incentive, there’s a good chance your patrons won’t want to share their personal information. This is especially true for retailers operating in the still federally illegal cannabis industry. So how do you gain loyalty members without adding a negative experience to the consumer journey? A common strategy is using cashback credits on every purchase for anyone who signs up. If your business chooses to do cashback credits, points-per-dollar is more effective than points-per-visit. Another cost-effective approach is to establish monthly raffles, with multiple prize winners, with incentives such as grocery store gift cards, prepaid cell phones, or even heavily discounted cannabis product such as an eighth for $1, should your local regulations allow such promotions. This is a great way to grow your frequent-flyer database with new customers while continuing to incentivize your existing ones.

2. Be Strategic With Your Database Promotions.

An effective loyalty program can transform your business, and one of the most effective strategies is to use your loyalty program to build a relationship with your customers. Use your platform to monitor customer shopping habits and send targeted promotions to your guests based on their preferences. Identify trends such as a favorite strain they purchase every week and implement a system that allows them to redeem that product after they’ve collected enough cash-back points (for example, to redeem an eighth). Use your loyalty platform as a tool to help you make strategic marketing decisions that speak directly to your customers. Remember, connecting with your guests involves paying attention to what’s important to them!

3. Give Customers Something To Hold On To.

For patrons who choose to opt in to your loyalty program, giving them something physical to represent membership goes a long way. Printing a loyalty card with the customer’s name on it is a great way to make your loyalty program feel more official. Consider making a special one for other industry members and neighboring business employees—just make sure you’re able to reference a digital version of your database information in case they lose it. You don’t want to hinder the customer journey for your loyal patrons who accidentally misplace their cards. And trust me, it will happen!

Nick Jack is chief retail officer at Diego Pellicer-Colorado, and supervises daily retail operations, including cannabis procurement, sales, cash handling, financial reporting, customer service and more.