Borrowing from industry scripts such as airlines and hospitality, a growing number of cannabis retailers are increasing their loyalty program games to attract customers to get them back to the store.
Industry players say loyalty programs are no longer just optional perks – they are an important tool for businesses to thrive in a crowded and rapidly growing marijuana market.
“If you want to compete in any cannabis market, you will have to have a loyalty program — at least one loyalty program,” said Rocco Del Priore, co-founder of Sweed, a software provider based in California-based sales.
Cannabis stores (such as Deep Root Harvest and Sources) adopt a layered loyalty model This is to reward customers based on their expenses.
Technology plays a key role.
Companies such as Dutch and Sweed take loyalty programs to the next level by providing an all-in-one solution combining point-of-sale systems, e-commerce and marketing tools.
“If you can dream of loyalty programs, we can support it,” said Chris Ostrowski, chief technology officer of the Netherlands.
Spend more, earn more
Cannabis stores deep roots and has several locations in Nevada, and it has programs that reflect airline models: the more you spend, the more you earn.
The program has proven effective, buying 96% of purchasing power at the source, while loyalty members now have 95% revenue, while loyalty members are marketing directors at Harvest and Source Matthew Janz said loyalty members have higher purchasing power than about 85%.
Customers receive 2.5% cash value when purchasing and have the opportunity to upgrade to a higher level for higher rewards.
For example, spending $500 unlocks a 3% discounted interest rate for cash. Points can be redeemed for discounts, 100 points equals $2.50 and 1,000 points, saving $25.
“We really encourage people to earn these levels, spend more money and activate the program,” Janz said.
Deep Roots Harvest acquired the source last year.
“Reward customers is the lion share in our business,” Janz said.
Technology-driven loyalty solutions
One of the key innovations in loyalty programs is their integration into an e-commerce platform that allows customers to track their own opinions and rewards.
Focusing on convenience and allowing customers to choose the products they need is crucial in a competitive market because they can shop a lot, Janz said.
“We want to give them the freedom to choose so that they can spend loyalty on the product that suits them,” Janz said.
“Part of the excellence of service is ensuring that customers choose your reward.”
Sweed’s platform allows pharmacies to design layered programs, provide exclusive rewards and play experiences to attract specific customer bases, such as tourists or locals.
The technology also includes a mobile app that provides a Starbucks-like experience, enabling customers to scan, track rewards and get personalized quotes.
Until recently, many cannabis consumers were unaware that they were even part of the loyalty program, said Tim Barash, CEO of Oregon Dutch.
“There is no way to see it because it’s not in your e-commerce – there is no mobile app that can show you,” Barash said.
“If you give them these discounts, the most important thing is that the client knows that they have a motivation to stay true to the pharmacy.”
Build community and value
While discounts and cash rewards are at the heart of loyalty programs, many pharmacies use them to strengthen their connections with the community.
Deep Roots, for example, position itself as a “local-centered pharmacy” at its parent company Minnesota Vireo Health.
“We do support the communities we serve,” Janz said.
“It is very important to bring value to every customer not only through charity but also to reward them for supporting us.”
Del Priore said Sweed’s platform added a layer of education to help partners make suggestions based on their customers’ purchase history, which is displayed on the screen behind the counter.
“It provides an increase in interaction with customers,” he said.
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The future of cannabis loyalty
Loyalty programs are evolving as competition in the cannabis market intensifies.
Del Priore said that in markets that can reach up to 70% of existing discounts such as Arizona and Florida, pharmacies are attracting and retaining customers for investment in other ways.
Some even offer trial membership programs, which offer set monthly programs and VIP allowances, such as skipping lines.
Sweed implemented a pilot membership program with one of the clients, and Del Priore declined to be named.
Similar to the wine club, customers pay monthly fees, in return, to get a certain amount of product and privileges to skip checkout lines.
Ostrowski of the Netherlands said loyalty programs are an important part of the modern retail experience, whether it is for cannabis, sandwiches or coffee.
“This is to provide pharmacies with tools to compete and thrive in a challenging market.”
Margaret Jackson can be reached Margaret.jackson@mjbizdaily.com.
