Retain More Customers with the Dispensary Loyalty Loop

We’re going to share a simple 4-step approach on how you can stop losing customers to your competitors using the Dispensary Loyalty Loop.

First, we need to understand “customer churn.” Customer churn refers to the rate at which your customer base shrinks as customers stop doing business with you. In this regard, they stop doing business with your store when they choose to refill their stash next door.

Churners often fall within these 3 customer types:

- Deal Shoppers: They come in to buy a specific product on sale or when they find the lowest deals. If another dispensary offers a better deal tomorrow, expect to find them there.

- Brand Loyalists: They may be loyal to certain cannabis products, but not necessarily to a particular dispensary. They'll go to whichever dispensary has their favorite products in stock. 

- Newbies: If they are new to cannabis, they may visit a few dispensaries to try out different products and get a sense of the place. They have yet to find a dispensary that matches their vibe.

These customers all contribute to the dispensary's sales, but they aren't forming long-term relationships and are basically "churning" through the system.

The goal of dispensaries, like any other business, is to convert these casual visitors into loyal, repeat customers who consistently prefer one store over the others.

Introducing the Dispensary Loyalty Loop

To reduce the impact of customer churn, Happy Cabbage and Digital Awesome have partnered to create the Dispensary Loyalty Loop, a set of best-in-class tools & systems that:

- Make your dispensary the preferred choice over local competitors

- Increase a customer’s lifetime value

- Continue to expand the customer base by providing elevated and rewarding experiences

How does it work?

This 4-phase system transforms cannabis customers from casual shoppers into valued regulars by guiding them on a journey that is filled with convenience, rewards, and a strong sense of belonging.
 

Phase 1: Awareness

The loop starts even before customers return to the dispensary. With Happy Marketers, dispensaries can send personalized messages to recipients' phones and emails. These messages keep them updated on relevant deals and new product arrivals, piquing their interest in the dispensary's offerings.

Phase 2: Sell and Drive

Once captured, customers can expect a smooth and efficient in-store customer journey, ensuring that top products are available on the shelf and that they have rewarding ways to shop their future stash.

With Happy Buyers, dispensaries optimize their inventory to reduce stockouts of popular products and increase store reliability. This means that customers are more likely to find what they're looking for during their visit, avoiding frustration and encouraging them to return to your store for future purchases.

Budtenders can then redirect these shoppers to the dispensary's mobile app for additional convenience and loyalty benefits.

Phase 3: Nurture & Grow

Digital Awesome cannabis mobile apps keep customers deeper within its ecosystem. As an extension of your locations, the custom mobile app lets customers manage rewards, browse product menus, place online orders, track deliveries, and engage with gamified loyalty programs.

To keep customers coming back, dispensaries can trigger buys using push notifications about restocked favorites and limited-time promotions.
 

Leveraging The Power of 7

A principle in marketing states that a typical consumer needs to see marketing messages from a brand seven times across multiple channels before finally converting.

Happy Marketer's SMS and email campaigns and Digital Awesome's built-in mobile app push notifications help dispensary teams strategically reinforce marketing messages to increase recall and drive sales.

Phase 4: Expanding Reach

The app's gamified loyalty & referral program uses incentive-based "word-of-mouth" marketing. Happy customers can spread the word with friends and family via text or social media messaging, encouraging them to sign up for the app in exchange of sign-up bonus points, visit the dispensary, or check your website. 

This user-generated exposure draws new potential customers, closing and expanding the dispensary loyalty loop with minimal effort on your dispensary.
 

In summary

This 4-step system raises a customer’s lifetime average value, deepens customer-dispensary relationships, and positions your dispensary as the top choice.

Customers are more likely to return when a store offers unbeatable deals, superior customer and reward experiences, is dependable, and employs a holistic set of marketing tools.

In cannabis, cultivating dispensary loyalty can be challenging, but the Dispensary Loyalty Loop offers a methodical framework to support it.

Demo Happy Marketers & Happy Buyers

Demo Digital Awesome Custom Cannabis Mobile Apps

If you want some inspiration for ideas on how you can employ the Loyalty Loop within the technology we discussed on this blog, read on.

The Big Box Approach

The idea of driving customers to a dedicated retail mobile app is not new. Major brands spend millions of dollars on this strategy to reduce churn and build high-value relationships with their customers.

Here are some major brand successes that the cannabis industry can take inspiration from:

The Burger King Whopper Detour

Burger King's award-winning 'Whopper Detour' campaign exemplifies the effective use of apps to lure customers away from competitors. Burger King used geofencing technology to target McDonald's customers and offer them a Whopper for one cent.

The campaign worked by unlocking the special deal on the Burger King app when users got within 600 feet of a McDonald's. The app also directed the user to the nearest Burger King location to redeem their Whopper. This strategy diverted McDonald's customers to Burger King locations.

The 'Whopper Detour' resulted in over 1 million app downloads for the Burger King app in the first two days of the campaign, propelling it to #1 on both iOS and Android platforms. Additionally, the campaign resulted in a 53.7% increase in monthly active users (MAUs) for Burger King's mobile app, as well as a 143% increase in users sharing location data with Burger King.

While the campaign was only nine days long, it was a financial and branding success. It increased not only sales but also customer engagement and loyalty to the brand.

The Starbucks app exceeded 30% of total US transactions

Starbucks' mobile app remains a significant driver of sales and customer engagement. The Seattle-based company reported that the app accounted for 31% of all transactions at company-operated stores in the United States. This is a steady increase from 27% the previous year and 25% two years ago.

Starbucks' robust omnichannel app adoption strategy has successfully drawn people to their mobile app. By bolstering lifetime customer value and engagement through an efficient mobile order experience, app-exclusive rewards, push notification campaigns, seasonal games, and its mobile payment system, Starbucks has secured its position as one of the top apps to use and established itself as the leader in the US mobile payment space.

Notably, even for established mobile apps, SMS and email marketing efforts continue to play an important role in increasing app usage, generating cross-channel sales, and attracting a larger customer base across all touchpoints.