maintain loyalty

This Article Was Originally Published by Green Entrepreneur


Why do so many companies focus on attaining more customers when giving more attention to their existing customers actually holds more long-term value? While customer acquisition is important, it’s often an uphill battle involving expense and experimentation. In the nascent cannabis industry, it’s even more essential to develop a loyal customer base early, as new retailers are constantly emerging and hoping to grab their share of the market.


Just how important are returning customers? Studies have shown that acquiring a new customer can cost 5 times more than retaining an existing one–increasing customer retention by 5 percent can increase profits from 25 to 95 percent. Ad the success rate of selling to an existing customer is 60 to 70 percent while selling to a new customer has a success rate of just 5 to 20 percent. The numbers are clear: It pays to invest in keeping existing customer bases engaged and making them feel like a valuable part of your business.

Reward programs are an extremely effective way of turning customers into loyal and long-term customers–as long as they are managed effectively. What makes a reward program successful? Retailers should offer desirable rewards, make sure that earning and redeeming points is easy, and most importantly, maintain consistent communications.

Here are some applicable tips for executing a successful loyalty rewards program.

Related: 5 Ways to Create a Better Cannabis Customer Experience

Hook your loyal customers from their very first purchase

One way to do this is to give your customers a welcome bonus that is enough to redeem a reward or discount right out of the gate–whether they spend $10 or $50. For instance, if it costs 100 points to redeem a free pre-roll, send first-time loyalty buyers a post-purchase message saying that they have earned 100 points and are now eligible to redeem those points for a free gift. That customer will probably come back for the free pre-roll, at which point they are more likely to purchase another product while they are in your store or on your website.

Scream about your program from the rooftops

Make sure signage about your loyalty program is featured prominently in your store and on your website. Have a rewards display case sitting on the checkout counter so that every customer can see what they would get as part of the program. For instance, retailers can showcase a pre-roll listed next to 100 points, an ounce of flower listed next to 200 points, free store swag for 300 points, and so on. You can include a button on your website or sign at checkout that says for example, “Join and get a free pre-roll.” Ensure that you are using every opportunity to remind customers to join the program and those who have already joined the program to use it.

Related: How This Food-Delivery Entrepreneur Pivoted to Cannabis-Delivery

Text customers and keep in touch…often

Communicating consistently with your existing customers is crucial to keeping your program– and your business–top of mind. Set up automatic text messages that are sent after every single purchase. These messages can thank your customers for their purchase, update them on the points they’ve earned for that purchase, and offer them a coupon for milestones like birthdays or membership anniversaries.

Offer a cornucopia of rewards

Don’t be stingy. You have to spend a little money–in the form of giving away freebies and coupons–in order to make more money. Examples of rewards include sample-size free products, coupons of varying amounts, VIP access to new products before they hit the shelves, company or product swag, entry into raffles, even tickets to local concerts or events that have nothing to do with your business or products but are desirable. Make it easy to move up the points tiers and earn rewards–that’s what will keep your loyal customers making purchases. Additionally, set up your sales system to track which rewards products or deals are getting the highest rate of engagement from loyalty members.

Rock customer service

Whether it happens online or in-person, poor customer service will cause people to leave you in a flash. Train your staff to provide positive experiences for your customers, whether at the checkout counter, in the aisles, or over the phone–and make sure they know to make an extra effort with loyalty program customers. If there is a problem, work to figure it out ” 95 percent of customers still return after experiencing problems if the issue was successfully resolved.

Ultimately, running a strong loyalty program is not a “set it and forget it” endeavor. You’ll need to continually test rewards, coupons, and giveaways to make sure what you are offering is an incentive is enticing to your customers–and remains so. Given the importance of retaining customers to the success of your business, such efforts are not a distraction–they are measurably profitable investments of both time and money.


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