Cultivating Loyalty: Growing Your Cannabis Business Through Customer Retention
Let’s be real — a thriving cannabis business isn’t just about having the highest quality products. It’s about the people who keep coming back for more.
Loyal customers keep your business afloat and they do more than simply providing steady revenue. When they become superfans, they refer their friends to you. And, cultivating loyalty is not just about feeling or sharing the love. It can grow your profits and put you on the fast track to a flourishing future.
You already know that investing time and energy into fostering loyalty is a good idea. So today, we’re sharing actionable tips and strategies to help you do just that. Plus, we’ll also take a peek at how these steps can affect your business’s finances.
Whether you’re a cannabis retailer, cultivator, or a lab, this deep dive into customer loyalty and its financial implications serves as a guide for how you can create superfan loyalists. And even if you’re not directly in the cannabis biz, there’s a lot to glean for retail businesses in general.
The Value of Loyal Customers
We all know that loyal customers are gold, but let’s break down their actual value. Repeat business is like a gift that keeps on giving. Loyal customers don’t just make one purchase. They keep coming back, helping to generate a steady revenue stream.
It gets even better. These customers become your brand’s unofficial marketing squad, spreading the word about your business faster than you can say “budtender.” This word-of-mouth marketing is a cost-effective way to score referrals. It’s free advertising that saves marketing dollars and tends to be more persuasive to potential customers.
Speaking of marketing spend, new customer acquisition can cost up to five times more than retaining existing ones. If you’ve been in business for a while, your loyal customers are right there, already vibing with your dispensary. Nurturing these relationships can be more cost-effective and definitely less exhausting than continually chasing after new ones.
Bottom line? Loyal customers are both valuable and essential. They play a huge role in fattening your bottom line and ensuring a healthier cash flow.
Investing in a High-Touch Experience: A Joint Effort that Yields High Returns
“High-touch experience” may feel like a trendy buzzword. But it’s more than that because creating a personalized, memorable interaction for your customers every time they walk through your doors or hit your website is vital for your business. Think of it as a customer service gold standard in the cannabis industry.
From a financial perspective, this is huge. Why? Because a great experience can be the tiebreaker between your business and the competition, particularly when you need an edge. For example, if you have a competitor in a similar location serving similar demographics, and if their location is even a hair more accessible, you’ve got to step up the experience to make people want to go with you.
Product quality and variety matter too. Your customers are coming to you for their cannabis needs. Delivering top-notch products consistently that cater to different preferences, is one of the best ways to keep them coming back.
Customer service also plays a critical role. How approachable are your budtenders? How well can they answer customer questions? How well are they able to discern between what they think the customer should know and what the customer really wants to know? (After all, it’s not just about terpenes, strains, or technical info.)
The ROI of high-touch experiences can be significant, yet also hard to quantify in sheer numbers. Some ideas that we’ll get into more deeply below include:
- Personalized recommendations
- Exclusive events for loyal customers
- In-depth product education based on what matter to each person
Leveraging Events for a Financially Flourishing Business
In the cannabis industry, events are more than gatherings. They’re potent opportunities to foster customer loyalty. They create community, generate excitement, and provide valuable education, all of which can help your business stand out in the crowd.
Think about 4/20 celebrations, cannabis expos, conferences, or educational seminars. These are prime moments to connect with your customers and build lasting relationships.
Strategic partnerships can also play a major role here. Collaborating with other brands and local businesses from food trucks to local entertainers for product launches or promotional events can create a buzz, attract larger crowds, and expand your reach.
Offering exclusive discounts or product specials to existing customers at these events can spur purchases. What’s more, inviting loyal customers to events makes them feel valued and deepens their connection to your business.
The Value of Exceptional Customer Service
Higher level customer service isn’t just a nice-to-have—it’s a must. Exceptional customer service plays a vital role in your financial success by increasing customer satisfaction, loyalty, and as a result, your revenue.
But how can you ensure your customer service is on point? Start with your team. Investing in employee training and development is key. Knowledgeable and skilled budtenders provide customers with the right information and guidance and help cultivate trust and a stronger connection to your business.
Creating a welcoming and inclusive environment also goes a long way. Whether a canna-newbie or a seasoned connoisseur, by focusing on making every customer feel comfortable and appreciated you can encourage them to keep coming back.
And don’t shy away from customer complaints or feedback. As uncomfortable as it can be, addressing these promptly and professionally shows customers that you value them and want to make things right. Most importantly, people pay as much attention to how you respond to negative feedback as to positive reviews, especially online, so taking the time to nip any issues in the bud now will help you flourish in the long-term.
A Customer Loyalty Program is a High-Yielding Strategy
Launching a customer loyalty program is vital for any retail business, and your dispensary is no exception. A successful loyalty program has a few key elements:
- A points system or tiered rewards can incentivize regular purchases and bigger spending.
- Offering exclusive perks and benefits can strengthen customer relationships with your brand.
- Personalized offers based on customer preferences increase customer satisfaction and boost sales.
Having a loyalty program isn’t enough. You have to make sure people know about it too. You need to stay in people’s email and text inboxes with updates and make sure it’s easy for them to earn and redeem their rewards. Some POS systems even come with loyalty programs baked in.
And it’s not just about driving repeat business. A loyalty program can also provide valuable data that can turbocharge your marketing and ops, giving you valuable info that will help you offer products and events your customers love and connect with them where they want to hear from you.