Customer retention is extremely important, especially considering that as cannabis becomes more widely accepted and more dispensaries open their doors, there will be many more customers with a lot more choices. Making sure existing customers become loyal customers at your dispensary is a must. In fact, a 5% increase in customer retention rates can increase a company’s profitability by 75% according to Bain and Co.
That’s not only true for the cannabis industry in the United States, but in Canada as well. In fact, we just acquired Canada’s leading cannabis customer experience platform Budtender, to ensure that cannabis consumers across North America have access to quality customer experience.
While striving to improve the customer experience at your cannabis dispensary through customer reviews and customer surveys with Budtender is no doubt important for your overall customer retention marketing strategy, so is having an effective loyalty program.
Unfortunately, marijuana dispensary loyalty programs in Canada aren’t quite as straightforward as they are in the United States. While both countries have a slew of restrictions, Canada’s loyalty program restrictions are especially harsh.
That doesn’t mean that loyalty programs can’t be effective in Canada though. In fact, as long as you understand the restrictions specific to Canada, then you can run a compliant cannabis loyalty program with ease.
In this article, we will be talking about how to run a cannabis loyalty program in Canada. In this, we’ll take a look at the legal restrictions and what they restrict you from doing before jumping into a few tips to make your Canadian cannabis loyalty program a success.
Legal Restrictions
Like we hinted at above, the cannabis regulations regarding loyalty programs for Canada’s legal cannabis retailers are different than those of loyalty programs in the United States. At first glance, they can be daunting and discouraging if your a business owner looking to start up a loyalty program.
The law we’re referring to specifically here is Section 24 of the Canadian Cannabis Act which,
“prohibits any person who sells cannabis or cannabis accessories from offering cannabis or an accessory for free or as consideration for any other thing or service, and from offering any other thing or service, including as a right to participate in a game, draw, lottery, or contest, as an inducement for the purchase of cannabis or an accessory.”
This basically prohibits traditional points programs, where purchases earn points and points can be redeemed for cannabis. Health Canada does not however prohibit all forms of loyalty or membership programs. While loyalty points may be prohibited, programs that communicate information and brand preference to adults identified by name are expressly authorized by sections 17(2)(a) and (3)(a) of the Cannabis Act. Articles 16 and 17 of this act provide some exclusions.
All of this sounds really complicated, so let’s simplify it.
What you can’t do
All of these restrictions pretty much boil down to one simple explanation: In Canada, you can’t do anything in your loyalty that hinges on purchasing cannabis. That means you can’t do any “buy one get one free” deals or any other deals that require the customer to purchase something first.
That also means that you can’t run points-based loyalty programs that give customers points for every dollar that they spend at your dispensary. While this is unfortunate, there are still so many things that you can do in your loyalty program that will make it worthwhile and efficient.
How to run a compliant loyalty program in Canada
Despite these restrictions, cannabis businesses can still run an efficient and compliant loyalty program in Canada. As long as you operate on a strictly “No purchase necessary” basis, then you will be able to stay compliant and reward customers.
Here are some things that you can do with your loyalty program to reward customers and create a sense of community at your dispensary all while staying compliant:
Discounts
An obvious way to reward your loyalty members: discounts. While usually in customer loyalty programs, discounts come as a reward for spending a certain amount of money, in Canada, discounts can be used to reward other things such as visits or duration of their membership to their loyalty program.
Another great way to encourage enrollment, in general, is by offering a loyalty member-only discount that for example gives loyalty members 5% off a majority of the items in your cannabis store. In this way, you are bringing them value and encouraging others to join without going against any regulations.
Sending these discounts to loyalty members is made easy with text messages and email marketing. With springbig, you can automate and track this whole process to ensure that the right customers are getting the right discounts at the right time.
Merchandise
Another great thing to include in your rewards program and content marketing strategy that doesn’t go against restrictions is merchandise. Merchandise, or swag as some call it, is a great way to make customers happy and for cannabis companies and cannabis brands to spread brand awareness while rewarding their customers
As long as them receiving their “swag” isn’t reliant on them buying anything and doesn’t involve any cannabis products or cannabis accessories, then it’s free game.
For example, Canadian cannabis companies could reward loyalty members for their loyalty by offering them a free piece of swag after three months of loyalty membership as long as they’ve visited at least once a month. In this way, you are not basing it on purchases, so it is within regulation.
Price drop, new product, and inventory alerts
Keeping customers informed of price drops, new products, and inventory alerts is another great way to bring value to your loyalty members without breaking any laws.
These types of alerts are great because they create a sense of urgency. When dispensary customers see that their favorite products have dropped in price, are back in stock, or that you have a new product that is right up their alley, then they’ll be sure to stop in as soon as possible. To make these alerts even more powerful, consider adding images in order to spice up the message. Images are a great way to capture the attention of customers.
What makes these time-sensitive alerts even better is that with springbig’s autoconnects, you can create automated text message campaigns that go out to different groups of cannabis customers with different interests. In today’s recreational cannabis landscape, there are a slew of marijuana products to choose from so if some of your customers like flowers, others like concentrate, others are looking for deals on vape cartridges, then they’ll get the alerts that apply to them.
Canadian Based Customer Data
Cannabis retail stores in Canada should also be aware that Section 20 of the Cannabis Act states the following
“It is prohibited to promote, in a way that is prohibited by this Part, cannabis, a cannabis accessory, a service related to cannabis or a brand element of any of those things in a publication that is published outside Canada, a broadcast that originates outside Canada or any other communication that originates outside Canada.”
All of springbig’s text message marketing and other digital communications originate from within our Canadian offices in Toronto and Montreal, and all customer data is securely stored in Canada as well.
Other ways to encourage loyalty:
Social media
Besides an actual loyalty program, there are other ways to encourage customer loyalty. The first of which is on social media. By running an effective social media marketing strategy and connecting with your customer’s social media accounts, you’ll be able to not only promote your business through social media but also form a deeper connection with your customers.
Your goal on social media should be to increase your brand’s brand awareness, not boost sales. The boost in sales will come from brand awareness. As more and more customers or potential customers engage with your dispensary via their social media accounts, the community around your dispensary will solidify itself and grow in repeat customers.
You can think of social media as a form of free, organic cannabis advertising where current cannabis users who frequent your dispensary, as well as newcomers to the scene, can join your dispensary’s community. (and you don’t have to worry about open rates and bounce rates 😉
Social Media marketing for dispensaries is a whole other game with its own rules and regulations. To learn more read this article.
Social Media marketing for dispensaries is a whole other game with its own rules and regulations. The type of social media content you post is not free-range, in fact, much dispensary product content will get you shadowbanned or worse. To learn more about how to market a dispensary on social media read this article.
Content Marketing
By creating valuable and reliable blog article content even hosting third-party content on your website, your store or delivery service will show up in search engines. Organic search is an extremely effective dispensary marketing tactic and works well for those customers who have only given email addresses and for promoting marijuana products with high-quality images. Never discount how important proper professional photographic images of your marijuana products are or the added metrics of open rates and average click thru rates given by email to help you hone your dispensary marketing strategy.
How springbig can help
Through all of this, springbig is here to help. While a point-based loyalty program is out of the question. Our loyalty platform can still help you collect data on customers and create targeted marketing campaigns tailored just to them.
Through our loyalty program, text message marketing, and email campaign marketing capabilities you’ll be able to not only target customers and gather data, but you’ll also be able to automate the entire process. That means, you won’t even have to think about sending the price drop alert or new inventory alert, because the program will do it for you.
Interested in learning more about how springbig can help you increase foot traffic and customer retention rates, save time, and much more in Canada?
CEO and Co-founder of springbig
Jeffrey Harris