High Tide Increased Sales By 98%. Here’s How They Did It.
High Tide, a Canadian cannabis retail company nearly doubled its sales in just one year. From $48M in Q3 of 2021, their sales increased to a whopping $95.4M in Q3 of 2022. The company successfully positioned itself as the biggest player in the Canadian cannabis space using a distinct retail approach.
High Tide operates over 100+ Canna Cabana shop locations across Canada and has a robust e-commerce infrastructure that allows for further customer acquisition and accessibility. But apart from these, the company have gone beyond the standard retail & D2C approach. They adopted a discount club model to build their brand, strengthen brand & customer loyalty, and turbocharge their sales.
Yes, that’s right, just like Costco.
Much like how this retail giant operates, Canna Cabana offers loyalty programs that allow members to avail unbeatable member-exclusive prices and up to 70% off on accessories which gives customers so much value for their purchases.
Since launching its loyalty program in October, the program gained over 825,000 members which accounted for 90% of its daily sales. And they’re about to elevate and monetize this growing database with an upcoming paid membership program called Cabana Club Elite.
In an interview with Cannabis Business Times, they revealed that members are forecasted to pay around $5 monthly or $60 annually to get access to premium benefits that the company is still ironing out as of this time. Canna Cabana is diversifying its revenue streams by monetizing loyalty a notch further and the outlook is promising.
But one would wonder what difference it will make when set against their free loyalty program. And to that, Raj Grover, Founder & CEO of High Tide said
“We're not taking anything away from the non-paid members. Our Cabana Club members will keep all their existing benefits, but we're making the paid membership such a compelling proposition that we think they will find it very hard to refuse."
High Tide’s impressive trajectory is living proof that loyalty can take businesses to new heights when shop owners play their cards right. From a small head shop with big dreams, High Tide’s Canna Cabana has become Canada’s top cannabis retail brand.
Three Key Insights On How A Dispensary Can Leverage Loyalty:
Consumers Really Value Exclusivity
Everyone wants to be part of something. The concept of exclusivity elicits psychological rewards such as a sense of belongingness and importance that’s why membership programs remain to be an effective tool to drive customers in and generate substantial revenue for retail brands.
Aside from this psychological play, by design, membership and loyalty programs do offer a host of attractive benefits for everyday consumers. They may come in:
- Exclusive Access
Certain products and special deals are only available to the members. Members have first dibs on the newest products before they even hit the shelves, which leads to positive shopping experiences.
- Massive Savings
Savings remain to be the number one motivation as to why people join these types of programs. With member prices, businesses help cost-conscious consumers get the most out of their buck while allowing them to enjoy their favorite products again and again.
Incentives include cash back, earning points for every purchase and milestone rewards.
To a certain extent, people are willing to pay monthly or yearly premiums just so they can get better deals and benefits from high-value programs such as High Tide’s Cabana Club Elite program that they’re about to roll out.
Building Brand Loyalty is Key To Success
High Tide recognized the value loyal customers bring to their cannabis business. By following in the footsteps of Costco, they’re able to build their retention strategies around a business model that’s built on mutual trust, reward, and customer fulfillment.
According to Harvard Business Review, companies that scored high on brand and customer loyalty grow 2.5x faster than their competitors and deliver up to five times the returns to shareholders within the span of ten years.
By building brand loyalty, companies are not only increasing profits, but they’re also increasing company profitability. The importance of brand loyalty to any business is simple yet far-reaching. For most companies, 65% of their business comes from repeat sales, and existing customers are 90% more likely to make a purchase than newly acquired customers. Add the fact that customer acquisition costs are five times higher than nurturing existing clientele.
Businesses Should Stay Present Yet Forward-thinking
High Tide stayed in the moment and didn’t look too far ahead. By focusing on where their current market stands, they built their business around what their customers' value and used those data points to project where the industry was going.
By being innovators, and forward-thinkers, they were able to revolutionize existing cannabis retail models, stay ahead of the competition and become inspirations for others in the same space.
We think that this retail model is innovative for cannabis players. But how about you? We’d love to know what you think about adopting a discount club model for your own dispensary!