Loyalty or rewards programs are so common in retail that consumers have come to expect them. They are a popular way to build brand loyalty and acknowledge customers for their repeat business. They are so popular that even an illegal product like cannabis can reward shoppers for buying marijuana.
“What’s happening in the industry is that we’re seeing a transition from the early stages where it was about the cause and now it’s more of a commercial purpose,” said SpringBig’s Jeff Harris. His company provides loyalty technology to dispensaries. “As the industry becomes bigger and more widely adopted across multiple states, it’s becoming a more normal industry.”
Harris noted that there are a variety of ways a cannabis company can reward its customers with a non-cash incentive. Dispensaries can reward repeat customers with discounts and messages about special events. Brands can reward customers for their loyalty, while also offering rewards to budtenders for increasing sales of their products called a “sales spliff.” Brands can also offer rewards to the dispensaries themselves.
“The role we play is a provider of loyalty technology,” said Harris. “We give the software at no charge, and the dispensary can run the program on the software.” He said that clients can configure the program as needed and that once it’s up and running the company can build a database off of the data from the consumers.” SpringBig then charges the company for each text that is sent to the consumers and sometimes those are daily discount texts or announcements of special events.
SpringBig has made simplified the loyalty program by tapping into existing point-of-sale software like Green Bits and MJ Freeway. Customers need no additional devices or cards and only need to enter an email or phone number at the dispensary. The company expects to have an additional 4-5 signed up by the end of the year.
Another big player in the loyalty arena is Baker as they service more than 700 dispensaries. Just this week the company acquired another loyalty and e-commerce provider GrassWorks Media to further their reach. Joel Milton, Chief Executive Officer of Baker said, “Having a successful loyalty program that attracts and retains customers is one of the largest challenges in the cannabis industry today, which is why we created a loyalty program that takes into account a retailer’s bottom line as well as customer’s needs.”
Rewards Programs Can Lead To Increased Cannabis Sales
SailPlay created a program with one unique ID to set up a loyalty program and the customer logs in through a website. Arnib Mitra, Marketing Manager for SailPay said, “In the first six months that the program was live, 3,000 customers purchased five to six times more and then that number bumped up again.” The SailPlay program is mostly used for employees to motivate them to increase sales. ShowGrow in Las Vegas and in Southern California offers a point per dollar spent. It’s a tier-based program and the more often the customer shops, the more points they earn.
Ganjarunner also offers a point systems in its rewards program. Customers earn one point for every dollar spent and customers can redeem points for reward items. Carla Baumgarten, the Owner of Ganjarunner said, “We rotate a variety of products for rewards. There are about a half dozen products including flower, pre-roll, edibles, and topicals.” She said the dispensary also offers new products from vendors so customers can give it a try. “It’s a really nice gesture,” she said, “We also offer 200 points for referrals.”
Since cannabis companies can’t advertise easily, the dispensaries need an easy way to build clientele and rewards programs do just that. Plus in some locations, the dispensaries are clustered in the same neighborhoods because of geographic limitations. A rewards program helps define the dispensary and its chosen brands.
Some old school cannabis customers are turned off by the idea of a rewards program, feeling like it is too commercial or selling out. Yet, some customers are happy to get a discount or get invited to a special event hosted by a brand. It is certainly a sign of a maturing market when it used to be that the only reward for buying cannabis was a pair of metal bracelets.