Cannabis is steadily becoming one of the fastest-growing industries the world's economy has ever seen. Financial experts estimate businesses in the cannabis industry to gross over $200 billion over the next decade. With so many booming enterprises, companies must find unique ways to engage as well as retain consumers. One of those methods retailers have utilized for decades is that of a loyalty program. However, can loyalty programs provide businesses in the cannabis industry with the retention they need to be perpetual and successful? The answer is yes. Let's take a look at how the implementation of a loyalty program can significantly boost business in the cannabis industry.
What is a Loyalty Program?
A loyalty program is a name given to a program implemented by a company that grants consumers incentives for choosing their business instead of competitors. These programs often come in the form of individual membership or program cards. As far as incentives, loyalty programs can grant consumers discounts, exclusive, and even free merchandise. One example of a loyalty program is the Extracare Card provided by CVS Pharmacy. By signing up for this program at no cost to the customer, they are automatically eligible for discounts, coupons, member's only offers and in-store credit (known as 'Extra Bucks.') On the surface, it appears that the consumer is reaping all of the benefits. However, the business responsible for implementing an attractive loyalty program can see a fantastic return. These values are certainly transferable to cannabis businesses and retailers.
How Cannabis Companies Benefit from Loyalty Programs
When implementing a successful and attractive loyalty program, companies gain a multitude of benefits. Customers who have enrolled in a business' loyalty program have been magnetized. Magnetization refers to the process of obtaining valuable consumer data such as names, locale, and contact information through an attractive vehicle such as a loyalty program. Moreover, a loyal customer spends approximately 67% more than a typical customer over a three year period. Loyal customers are also ten times more likely to make a second purchase after purchasing for the first time or enrolling in a loyalty program. This data can be useful for the short-term as well as long-term goals of a business. Loyalty programs can increase revenue, brand appeal, awareness, and overall success.
How to Implement a Loyalty Program for your Cannabis Business
If your cannabis business is considering implementing a loyalty program, follow these seven steps:
1) Assess the Need
Before a business implements a loyalty program, they must ask themselves a single question: “Do we need a loyalty program?” Evaluate the state of your business and determine if establishing a loyalty program for your cannabis business will yield the results the business desires.
2) Know Your Customers
Once a business determines the weight of implementing a loyalty program, it must verify its customer base. For a business to succeed, it needs to be at the forefront of understanding who it caters towards. If a loyalty program is to be established, it must be tailored to the niche that the business directly serves.
3) Make it Exclusive
One thing all loyalty programs have in common is some form of exclusivity. Let the dissenters know that they are missing out. Often, the top-tier offers that are only made available to those enrolled in a loyalty program are worth the customer taking a few seconds to provide some profiling information.
4) Create an Atmosphere
Another core concept of a loyalty program is the experience. When companies provide an experience in association with their loyalty programs, consumers feel engaged. Engaged customers are returning customers.
Do you know what goes hand-in-hand with experiences? Recurrence. By providing a rate of frequency in association with your company's loyalty program, potential customers will be frequent. If you give consumers more opportunities to engage, then the rate of expectancy will increase. This can transfer to constant traffic as well as increased profitability.
6) Provide Benefits
Loyalty programs also provide customers with cozy 'thank-you's.' Companies who have implemented successful loyalty programs often give back to their loyal customers. By giving a 'buy 7 grams, get your next gram free' promotion to all loyal customers, chances of these customers being retained are significantly higher (no pun intended.)
7) Increase the Sociability
The age of technological advancements and social media marketing have seen businesses grow to heights that were once unfathomable. Cannabis is a niche topic that naturally gains its organic engagement virtually every second on social media. Make your business' loyalty program worth tweeting about. Consider implementing a unique hashtag for your loyalty program to help fortify the appeal of the program. Mastering word of mouth, as well as shares and retweets, can help solidify engagement as well as the longevity of your loyalty program.