Borrowing from the playbook of industries like airlines and hospitality, an increasing number of cannabis retailers are upping their loyalty program game as a means of engaging customers to keep them returning to their stores.
Loyalty programs are no longer just optional perks – they are essential tools for businesses to thrive in the crowded and rapidly evolving cannabis market, industry players say.
“If you want to compete in any cannabis market, you’re going to have to have a loyalty program – it’s table stakes to at least offer one,” said Rocco Del Priore, co-founder of California-based point-of-sale software provider Sweed.
Marijuana stores like Deep Roots Harvest and The Source have adopted tiered loyalty models that reward customers based on their spending.
Technology also is playing a pivotal role.
Companies like technology platforms Dutchie and Sweed are taking loyalty programs to the next level by offering all-in-one solutions that combine point-of-sale systems, e-commerce and marketing tools.
“If you can dream the loyalty program, we can support it,” said Chris Ostrowski, Dutchie’s chief technology officer.
Spend more, earn more
Cannabis stores Deep Roots and The Source, which have several locations in Nevada, have programs that mirror the airline model: The more you spend, the more you earn.
The program has proven effective, with 96% of purchases at The Source and 95% at Deep Roots now made by loyalty members, up from about 85% before, said Matthew Janz, director of marketing with Deep Roots Harvest and The Source.
Customers receive a 2.5% cash value back on purchases with opportunities to upgrade to higher tiers for even greater rewards.
For example, spending $500 unlocks a 3% cash-back rate. Points can be redeemed for discounts, with 100 points equating to $2.50 off and 1,000 points offering $25 in savings.
“We really encourage people to earn those tiers, spend a little bit more and get activated into the program,” Janz said.
Deep Roots Harvest acquired The Source last year.
“The rewards customers are the lion’s share of our business,” Janz said.
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