Is Your Rewards Program Working? How Do You Know?
Are you leveraging your dispensary's rewards program to its fullest potential, or is it underperforming? In the competitive cannabis market, having a rewards program isn't enough; it needs to actively convert one-time visitors into loyal customers, boosting your revenue. Whether you're assessing your existing program's impact or considering starting one, the key to success lies in understanding the crucial elements that make a rewards program truly effective.
This article will guide you through the essential traits of simplicity, value, and optimization that distinguish top-performing rewards programs, showing you how to elevate your customer engagement and turn casual shoppers into devoted fans.
Table of Contents
Repeat customers matter more to your bottom line
You are leaving money on the table if your dispensary doesn’t have a good strategy for turning first time customers into loyal regulars . Cannabis retail stores get lots of walk-in traffic, but single visit customers ultimately don’t contribute much to your revenue. At most dispensaries these customers only contribute around 10% of your sales. The true value of a customer is unlocked only when you convert them into a monthly regular.
This graph is based on real data for a year of sales at a high-performing dispensary. We can see that regular customers who shop at least once every month contribute more than 60% of revenue, despite being only 13% of the unique customers seen at the dispensary that year.
Not only are regulars more valuable, but it costs you more to bring a new customer to your store than it does to motivate a past buyer to visit again.
Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.
- Harvard Business Review
Rewards programs are an essential tool for turning new customers into valuable regulars, but it can be hard to implement them correctly and measure their success
Rewards programs are the most accessible tool to drive loyalty
There are important aspects of your operations influencing customer loyalty that can be challenging or expensive to control:
Modifying your in-store experience or changing your location is expensive and legal restrictions can limit your options.
Staff relationships with customers are critically important, but driving changes here takes time, focused effort, and effective training
Product selection and pricing are affected by upstream inventory availability from vendors, as well as your ability to build relationships and negotiate favorable terms
A rewards program lets you influence customer behaviour with fewer external limitations. An effective software partner can also eliminate much of the manual work involved in marketing and operating the program.
Signs you may have issues with your rewards program
Your staff isn’t excited about the program and don’t sell it to customers
Customers resist signing up or don’t see the value
You don’t know how many customers you have signed up
You don't know how many of your members recently made a purchase
You don’t know how your rewards program contributes to your bottom line
You don’t know how much your program costs
Customers need to take multiple steps to enroll
What makes a good rewards program?
A successful rewards program is characterized by its simplicity, value, and optimization. These three factors ensure the program is effective, engaging, and easy to use for both customers and staff.
Simple
Easy for budtenders to explain and customers to understand
Quick to make redemptions at checkout
Few limitations or conditions on how customers can use their points
Valuable
Rewards are sufficiently generous
Make customers aware of how they will benefit
Extremely loyal customers benefit more from the program
Creates anticipation and excitement by giving customers milestones to save towards
Optimized
The program is highly visible to customers
A strong process is in place to onboard new customers onto the program as fast as possible
The signup process is frictionless
Pushes customers to register redemptions before coming in-store, saving time at checkout
Program keeps them engaged throughout their relationship with your store
Simple
A simple rewards program is straightforward for everyone to understand. Here's how to achieve it:
Clear Explanation: The program should be so simple that it can be explained with just a graphic on a letter-size paper. This clarity helps customers quickly grasp how it works and make decisions at checkout without hesitation.
Budtender Enthusiasm & Clarity: Budtenders should be able to easily explain the program to new customers. If they struggle or take a long time it might not be their fault, you may need to simplify the program.
Speed at Checkout:
Visual Accessibility: Choose a rewards provider that offers an intuitive way for customers to view their points and understand how to spend them. The goal is to minimize or eliminate the need for customers to consult budtenders about their points and eligible products.
Valuable
The value of a rewards program lies not just in the rewards themselves but in how they motivate customer behavior:
Balancing Cost and Benefit: While managing costs is important, too stingy a program won't motivate customers. Consider setting a target percentage cost for the program and design rewards that fit within that budget.
Competitiveness: Ensure your program is as good as or better than those offered by nearby competitors. This encourages customers to choose your dispensary over others.
Clear Benefits: Actively communicate the benefits of your program. Use events like double points days to highlight the value customers get from participating.
Rewarding Loyalty: Design the program so that the most loyal customers gain the most, incentivizing them to keep coming back.
Milestones: Incorporate milestones that build anticipation and excitement. Instead of offering small, frequent discounts, consider higher-value rewards that customers can save up for, enhancing engagement with the program.
Optimized
An optimized rewards program is seamlessly integrated into the customer experience:
Visibility: Ensure the program is highly visible, both online and in-store. For example, product pages could show the points needed for redemption.
Multiple Touchpoints: Your ecommerce platform should prompt customers at various stages to join the rewards program, not just at checkout.
Encourages Engagement: You should give customers frequent reasons to interact with your program. Program effectiveness is much lower if a customer never thinks of your program except when budtender mentions they can get a $10 discount.
In-Store Promotion: Use signage to explain the program and include QR codes for easy sign-up. This helps capture the interest of walk-in customers.
Efficient Onboarding: Train budtenders to quickly and effectively enroll new customers, making the value proposition clear from the start.
Frictionless Signup: The signup process should be as simple as possible. Ideally, customers would register once and be enrolled in both your online store and the rewards program.
Continuous Incentives: Keep customers engaged over time by offering new reasons to interact with the program. High-value redemption items, bonus points for certain actions, and limited-time offers are all effective strategies.
Conclusion
A well-crafted rewards program is a powerful tool for building customer loyalty and driving repeat business in your dispensary. By focusing on simplicity, value, and optimization, you can create a program that not only resonates with your customers but also sets your dispensary apart from the competition.
Remember, the goal is to make your rewards program a win-win: easy and enticing for your customers to use, and a strategic asset for your business growth. Start applying these principles today, and watch as your dispensary transforms occasional visitors into loyal regulars, ensuring a stronger, more profitable connection with your customer base.
Is Your Rewards Program Working? How Do You Know?
Are you leveraging your dispensary's rewards program to its fullest potential, or is it underperforming? In the competitive cannabis market, having a rewards program isn't enough; it needs to actively convert one-time visitors into loyal customers, boosting your revenue. Whether you're assessing your existing program's impact or considering starting one, the key to success lies in understanding the crucial elements that make a rewards program truly effective.
This article will guide you through the essential traits of simplicity, value, and optimization that distinguish top-performing rewards programs, showing you how to elevate your customer engagement and turn casual shoppers into devoted fans.
Table of Contents
Repeat customers matter more to your bottom line
You are leaving money on the table if your dispensary doesn’t have a good strategy for turning first time customers into loyal regulars . Cannabis retail stores get lots of walk-in traffic, but single visit customers ultimately don’t contribute much to your revenue. At most dispensaries these customers only contribute around 10% of your sales. The true value of a customer is unlocked only when you convert them into a monthly regular.
This graph is based on real data for a year of sales at a high-performing dispensary. We can see that regular customers who shop at least once every month contribute more than 60% of revenue, despite being only 13% of the unique customers seen at the dispensary that year.
Not only are regulars more valuable, but it costs you more to bring a new customer to your store than it does to motivate a past buyer to visit again.
Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.
- Harvard Business Review
Rewards programs are an essential tool for turning new customers into valuable regulars, but it can be hard to implement them correctly and measure their success
Rewards programs are the most accessible tool to drive loyalty
There are important aspects of your operations influencing customer loyalty that can be challenging or expensive to control:
Modifying your in-store experience or changing your location is expensive and legal restrictions can limit your options.
Staff relationships with customers are critically important, but driving changes here takes time, focused effort, and effective training
Product selection and pricing are affected by upstream inventory availability from vendors, as well as your ability to build relationships and negotiate favorable terms
A rewards program lets you influence customer behaviour with fewer external limitations. An effective software partner can also eliminate much of the manual work involved in marketing and operating the program.
Signs you may have issues with your rewards program
Your staff isn’t excited about the program and don’t sell it to customers
Customers resist signing up or don’t see the value
You don’t know how many customers you have signed up
You don't know how many of your members recently made a purchase
You don’t know how your rewards program contributes to your bottom line
You don’t know how much your program costs
Customers need to take multiple steps to enroll
What makes a good rewards program?
A successful rewards program is characterized by its simplicity, value, and optimization. These three factors ensure the program is effective, engaging, and easy to use for both customers and staff.
Simple
Easy for budtenders to explain and customers to understand
Quick to make redemptions at checkout
Few limitations or conditions on how customers can use their points
Valuable
Rewards are sufficiently generous
Make customers aware of how they will benefit
Extremely loyal customers benefit more from the program
Creates anticipation and excitement by giving customers milestones to save towards
Optimized
The program is highly visible to customers
A strong process is in place to onboard new customers onto the program as fast as possible
The signup process is frictionless
Pushes customers to register redemptions before coming in-store, saving time at checkout
Program keeps them engaged throughout their relationship with your store
Simple
A simple rewards program is straightforward for everyone to understand. Here's how to achieve it:
Clear Explanation: The program should be so simple that it can be explained with just a graphic on a letter-size paper. This clarity helps customers quickly grasp how it works and make decisions at checkout without hesitation.
Budtender Enthusiasm & Clarity: Budtenders should be able to easily explain the program to new customers. If they struggle or take a long time it might not be their fault, you may need to simplify the program.
Speed at Checkout:
Visual Accessibility: Choose a rewards provider that offers an intuitive way for customers to view their points and understand how to spend them. The goal is to minimize or eliminate the need for customers to consult budtenders about their points and eligible products.
Valuable
The value of a rewards program lies not just in the rewards themselves but in how they motivate customer behavior:
Balancing Cost and Benefit: While managing costs is important, too stingy a program won't motivate customers. Consider setting a target percentage cost for the program and design rewards that fit within that budget.
Competitiveness: Ensure your program is as good as or better than those offered by nearby competitors. This encourages customers to choose your dispensary over others.
Clear Benefits: Actively communicate the benefits of your program. Use events like double points days to highlight the value customers get from participating.
Rewarding Loyalty: Design the program so that the most loyal customers gain the most, incentivizing them to keep coming back.
Milestones: Incorporate milestones that build anticipation and excitement. Instead of offering small, frequent discounts, consider higher-value rewards that customers can save up for, enhancing engagement with the program.
Optimized
An optimized rewards program is seamlessly integrated into the customer experience:
Visibility: Ensure the program is highly visible, both online and in-store. For example, product pages could show the points needed for redemption.
Multiple Touchpoints: Your ecommerce platform should prompt customers at various stages to join the rewards program, not just at checkout.
Encourages Engagement: You should give customers frequent reasons to interact with your program. Program effectiveness is much lower if a customer never thinks of your program except when budtender mentions they can get a $10 discount.
In-Store Promotion: Use signage to explain the program and include QR codes for easy sign-up. This helps capture the interest of walk-in customers.
Efficient Onboarding: Train budtenders to quickly and effectively enroll new customers, making the value proposition clear from the start.
Frictionless Signup: The signup process should be as simple as possible. Ideally, customers would register once and be enrolled in both your online store and the rewards program.
Continuous Incentives: Keep customers engaged over time by offering new reasons to interact with the program. High-value redemption items, bonus points for certain actions, and limited-time offers are all effective strategies.
Conclusion
A well-crafted rewards program is a powerful tool for building customer loyalty and driving repeat business in your dispensary. By focusing on simplicity, value, and optimization, you can create a program that not only resonates with your customers but also sets your dispensary apart from the competition.
Remember, the goal is to make your rewards program a win-win: easy and enticing for your customers to use, and a strategic asset for your business growth. Start applying these principles today, and watch as your dispensary transforms occasional visitors into loyal regulars, ensuring a stronger, more profitable connection with your customer base.
Simplifying the dispensary software struggle
Carrot Inc 2024 All Rights Reserved
Simplifying the dispensary software struggle
Carrot Inc 2024 All Rights Reserved