AuthorNora Chen

Are Cannabis Dispensary Loyalty Programs Worth it?

A loyalty program is first and foremost about keeping your existing customers, and this makes perfect business sense: Bain & Company estimates that a 5% increase in customer retention can boost a company’s profitability by 25%.2 This is because customers become more profitable over time3, and the cost of keeping an existing customer is 5 times lower than acquiring a new one.4 Returning...

7 Steps to Designing a Successful Cannabis Dispensary Loyalty Program

Tailor-made for the dispensary business, this comprehensive design process will guide you through making clear and strategic decisions on each loyalty program dimension, one step at a time. By the end of Step 7, you will be ready to roll out an effective loyalty program that will bring your customers joy and bring you profit. Let’s begin: Step 1 – Define business objectives As with any good...

How to Measure Cannabis Dispensary Loyalty Program Performance?

A successful loyalty program should be a constant work-in-progress. You start with a pilot program and make continuous improvements based on the latest program metrics. As a result, it is crucial to make sure you are measuring the right metrics.  There are two sets of metrics to measure, one for the near-term program health and the other for the long-term program effectiveness: General...

Rules and Regulations on Cannabis Loyalty Programs in California

California state law To help dispensaries design loyalty programs that are compliant with regulations, we combed through the California cannabis laws and regulations for code relevant to operating a dispensary loyalty program. We highlight these regulations below: Free giveaways are not allowed The law A licensee shall not give away any amount of cannabis or cannabis products, or any cannabis...

How to Implement A Cannabis Dispensary Loyalty Program

Now you have designed an effective and compliant loyalty program, the next step is to implement it. Progressive rollout Implementing a full-featured loyalty program all at once can be overwhelming, but you don’t have to do it that way. We recommend rolling out the program in stages. First start with a basic pilot program and gradually expand according to member feedback and analytics. Once the...

Mobile Apps for Cannabis Dispensary Loyalty

Mobile loyalty apps are rapidly expanding the possible benefits a loyalty program can offer. Many major loyalty programs have started offering useful tools in their mobile apps as an additional value-add.  One of Hilton’s loyalty program benefits is access to exclusive app features.  Based on our interviews with cannabis consumers, the following tools are perceived as highly valuable...

How to Save Money on Cannabis Rewards without Cutting Corners

There are many smart ways to reduce cost without compromising the program effectiveness. Here are some ideas: Reduce reward costs The key is to offer rewards that have higher perceived value than the actual cost: Source rewards from manufacturers or distributors who want to promote their products at your store. You are more likely to get good discounts from them. Offer overstocked items that...

Cannabis Loyalty Program: Open vs Closed Membership Eligibilities

There are two types of membership eligibility: Open membership: Everyone can join at any time. For example, anyone can download the McDonald’s loyalty app today and start to receive discounts and earn points.Closed membership: Customers can only join if they have met certain requirements, or have received an invitation from you. For an extreme example, the Emirates Airlines’ has an invite-only...

Cannabis Loyalty Program: How to Create the Best Point Structure

A point structure determines how many points a customer can earn per purchase. There are two common models: Fixed points: Fixed number of points per dollar spent. For example, Starbucks rewards 2 points and Hilton rewards 100 points for each dollar spent.Varied points: In addition to the fixed points that all purchases receive, some preferential products/brands receive extra points. If used...

Cannabis Loyalty Program: How to Build An Effective Program Structure

There are three common program structures:12 Frequency reward programs It takes the form of “buy X amount (or collect Y points), get a reward”. It is more common for businesses that encourage frequent purchases and are transaction-focused (e.g. grocery stores) Customer tier programs It takes the form of “buy X amount (or collect Y points) over a period of time, qualify for a tier”. Customers in...