As consumers across the country continue to shelter in place and stock up on their favorite cannabis products to get them through quarantine, several regional retailers have experienced noticeable upticks in customer engagement and retention in recent months. While this can be an unpredictable period for dispensaries, it is arguably more important than ever to connect with new customers and demonstrate to them how the dispensary adds value to their shopping experiences.
springbig data collected before and after the outbreak points to an over 11% increase in customer engagement for retailers in Colorado and Washington. On the other hand, California retailers experienced a marginal engagement decrease of less than 1% and Nevada saw a roughly 6% decline in engagement. States that experienced lowered engagement rates may be competing against other extenuating factors. For example, Nevada’s dip in engagement may be largely attributed to the sharp decline in tourists visiting the state, and California’s minor decline in engagement may be a result of soaring cannabis state taxes that are pushing cash-strapped consumers to buy from the illicit market. However, for states like Colorado and Washington, which have a robust local consumer base, customer engagement is at an all-time high. Legal cannabis retailers in every state should consider the following four dispensary brand loyalty tips to retain customers during this unique period in time and hopefully maximize returns after the pandemic subsides.
Returning customers are the lifeblood of a growing business. In fact, marketing studies have shown that a quarter to almost half of total business revenue stems from returning customers, so it is imperative for retailers to get customers in the door and encourage them to stay there. Nearly every mainstream retailer is offering new customer promotional offers during this crisis to drum up more business, and dispensaries should follow suit. New customer promotions can include free delivery, express curbside pickup, a 15% discount on new orders, or a free gift with purchases over a certain value.
To keep new customers coming back, dispensaries can offer small discounts or bonus loyalty points for second and third purchases to deepen these relationships. It is also important to encourage new customers to sign up for the dispensary’s loyalty program during their first few purchases in order to stay in contact with them. Customers who return more than three times are often considered customers for life, so it is vital for dispensary marketing strategies to demonstrate the value of the store’s loyalty program and inventory early on.
Many dispensaries are now moving to e-commerce platforms to accommodate social distancing guidelines, which is an ideal opportunity to learn about customer preferences. Retailers can send customized promotions and recommendations based on previous purchases or favorited items on their website. Retailers can also tailor promotions to align with specific product preferences or price points to keep new customers engaged. For example, if a new customer bought a 20 pack of edibles for $30 for their first delivery, the dispensary can text or email the customer 20 days later with recommendations for edibles that are within the same price range.
Dispensaries can also offer incentives in the form of coupons or loyalty points for new customers who rate their online purchases. Online reviews not only make customers feel more valued but also allow retailers to fine-tune their recommendations to specific customer preferences. If this customer did not enjoy her berry flavored 5mg edibles, the dispensary can suggest different flavor profiles or dosages for future purchases.
A similar cannabis product marketing strategy is utilizing triggered messaging to connect with new customers at various points of their consumer journey. Dispensaries can send triggered text messages to new customers after their first purchase with a promotional offer when they are running low on products and due for a refill, or if their favorite items are back in stock. The last scenario is especially pertinent during the ongoing health crisis as various supply chain backlogs and panic buying have affected dispensary inventories.
Retailers that use this automated cannabis product promotion tool can communicate to customers that they are taking active measures to make the consumer experience as efficient and enjoyable as possible. As always, retailers should obtain the consent of their customers before reaching out over SMS with promotional offers or targeted messages.
Several mainstream retailers are offering unique products on their online shops during these unprecedented circumstances. Restaurants are throwing in free rolls of toilet paper with large takeout orders. Clothing retailers are selling affordably-priced face masks with recycled factory fabric. In recent weeks, several vertically-integrated cannabis companies have started producing hand sanitizers to help keep up with national demand. Dispensaries with appropriate resources can offer free bottles of hand sanitizer on purchases over a certain amount.
Retailers should also adjust their rewards to accommodate purchasing preferences that are favoring smaller products that can be enjoyed solo during the quarantine. For example, dispensaries that are experiencing this trend can offer a pack of mini pre-rolls to new customers who refer five new friends and offer free delivery to referred customers. Regardless of the current health crisis, it is critical for retailers to constantly have their fingers on the pulse of changing consumer habits. Dispensaries that can pivot their marketing strategies with ease are often more likely to increase engagement and long-term returns.