How to Increase Customer Retention and Build Loyalty at your Dispensary

Dispensary customer retention

Attracting new customers to a dispensary is often one of the highest priorities for cannabis retailers. However, it costs five times more to acquire a new customer than it does to retain an existing one.

A recent study also found that increasing customer retention rates by just 5% can increase profits up to 95%.

So while it's important to focus on new customer acquisition, it's even smarter to make sure the customers who already shop at your dispensary keep coming back.

Here you'll find both foundational and creative customer-centric strategies you can implement to cultivate lifelong loyalty at your dispensary organization.

Focus on the customer experience

Making every customer feel at home is a promise many dispensaries make, but not all deliver on. To ensure repeat visits, especially if this is a customer's first time visiting your dispensary, you need to satisfy them from the moment they walk in the door to the moment they walk out.

    5 tips to improve the dispensary customer experience:

    1. Understand your differentiators.

    You should know what makes your dispensary different from the competition.

      Then don’t be afraid to let this key differentiator be known to customers, whether you tell them overtly or show through the experience.

      For example, if it’s the education of your sales associates/budtenders, let that speak for itself. But if it’s the highest quality flower or highest value, prove it to them.

      2. Know the customer.

      What is their name? What do they usually purchase? What are their interests?

      Taking the time to get to know your customer makes them feel special and allows you to personalize experience. This creates trust and motivates them to come back to your store.

      Consider using the notes section of your cannabis point-of-sale system to jot things down about your customers so you can create that personal experience with them during every transaction.

      cannabis customer retention

      3. Ask open-ended questions.

      To better understand people — whether it’s friends or customers — you need to ask them questions beyond simple yes or no.

      Asking questions will help you understand their needs, interests, and why they are shopping with you. This creates long-term engagement and lasting relationships.

      4. Take the time to educate.

      By asking about customer's product interests or desired effects, you are able to tailor product education to each shopper.

      You can also open the door for the customer to try new products or explore other avenues to meet their needs. You are the expert — don’t be shy about making educated recommendations.

      You can even enhance your cannabis marketing with educational content to establish your brand as trustworthy, helpful, and objectively better than nearby shops.

      5. Think about the first impressions.

      What do your customers see when they first walk in? Is it welcoming and inviting? Is the first person they see friendly and warm? Is the space clean and tidy?

      Take a moment to look at your store with fresh eyes and identify where you can improve.

      Takeaway: Build customer trust by asking open-ended questions and learning about their cannabis preferences. Then, use those details to make personalized recommendations that match their needs. Make it a great experience, so when they need to re-up, they'll come back to you.

      Offer a dispensary loyalty program

      Cannabis loyalty programs incentivize customers to keep buying from your store. Customers have a choice to shop anywhere, but where they end up buying can be influenced — particularly if they’ll earn points and rewards every time they buy from your dispensary.

      Research shows customers who participate in loyalty programs are more likely to make purchases. According to Annex Cloud, 83% of loyalty program members say rewards programs make them more likely to continue doing business with a certain brand.

      Customer loyalty platforms like springbig and Alpine IQ specialize in dispensary loyalty. When they’re integrated with your cannabis POS system, you’re able to opt-in loyalty members, connect rewards to any deal, and redeem them directly at the point of sale.

      Here's a quick demo of how it works:

      This is a great way to drive repeat customers back into your dispensary to solidify customer relationships and build brand loyalty.

      Creative ideas for rewarding your loyal customers:

      • Give 5% back on all purchases: When customers sign up for your loyalty program, they can accumulate points to receive better pricing at your dispensary.

      • Refer-a-friend program: Incentivize your customers to refer a friend that has never shopped at your dispensary. This will drive new traffic into your store and allow your current customer base to receive a deal. An example would be: Refer a friend, receive 100 loyalty points.

      • Customer reviews program: Encourage your happy customers to review you on Weedmaps, Google, Leafly, Yelp, etc. for a chance to receive loyalty points. There’s always the risk of someone leaving a negative review, but if they are being rewarded, they are probably more likely to write something positive.

      • Loyalty reward points for completing an action: You can incentivize customers by giving them points for joining your loyalty program or points on their birthday. Another idea is to offer points for buying certain products. For example, you can announce your weekly specials, but loyalty members also get 10 points for buying the day’s special.

      Takeaway: Rewarding repeat dispensary customers will improve retention rates and ensure shoppers return to your store. But you can’t just set and forget a loyalty program, you have to incentivize customers to sign up and use it.

      Embrace technology

      Seamless shopping experiences lead to satisfied, loyal customers. Creating this kind of environment at your dispensary starts with the right cannabis tech stack.

      When a customer checks out, dispensaries need tools to speed up the process and incentivize the shopper to come back soon. Here are some examples:

      • Card payments: Non-cash cannabis payments can increase a dispensary's average order value by over 30%. Plus, more ways to pay means less friction during the checkout process.
      • Digital signage and kiosks: Offering visual references like product carousels on overhead monitors enhances customer education while they shop. Kiosks enable self-service customer shopping for those looking to get in and out.
      • Integrated loyalty programs: Flowhub's 2-way loyalty integration allows cannabis retailers to create hyper-personalized rewards for seamless redemption during checkout.
      embracing cannabis technology

      You can also invest in customer relationship management (CRM), loyalty and marketing tools to attract new customers and deepen relationships with previous shoppers. Try these ideas to distribute educational content and retain customers:

      • SMS marketing: Send text messages to your database that explain the holistic benefits of cannabis terpenes.

      • Social media: Try sharing some of your new product drops or educational blog content in shorter form across social platforms. Link back to your website or ecommerce menu to drive sales.

      • Email: Start a monthly cannabis newsletter that focuses exclusively on product education. Themes could be “Budtenders answer customer FAQs” or “Cannabinoids, explained”.

      • Staff training: Your dispensary staff are your most effective marketers. Encourage them to provide detailed advice and personal details about the products you sell.

      Offering additional services and purchasing options can maximize customer convenience and satisfaction. Examples include:

      • Ecommerce: Dispense provides online menus optimized for dispensary SEO. Integrating these native menus will put your products in front of customers searching online. Plus, offering an online menu makes the shopping experience much more convenient.
      • Order ahead: Enabling order ahead creates an efficient shopping option for customers to place orders online and pick them up in-store. This not only speeds up their own orders, but reduces wait times for in-store shoppers.
      • Delivery: The added convenience of cannabis delivery can level-up your store's accessibility and service to customers. In the case that a customer cannot or does not want to travel to your dispensary, they can still shop with you and have their products dropped off at their door.

      Takeaway: Embracing technology to impress customers, streamline your store operations, and help distribute marketing materials will draw customers back to your dispensary more frequently.

      Stand for something

      Google found 82% of shoppers prefer a brand's values to align with their own. If you’re not making your dispensary’s mission and values clear to cannabis customers, you’re missing out on a chance to connect with and retain them.

      Many dispensary operators already stand for something greater than their own profits — whether it be social justice, environmental sustainability, or something else. To ensure your customer base is resonating with your values, be vocal about them.

      dispensary advocacy

      Ideas to communicate your values to customers:

      • Create a clear and easy-to-find “About” page. Make sure it includes a detailed explanation of your dispensary’s mission, vision and values.

      • Incorporate values in your store design. Physical details like artwork, decorations and even staff attire are effective at conveying a message to shoppers. Incorporate your mission into your store’s visual culture, and customers will both see and feel the message.

      • Take action. Showing genuine support for the causes that align with your values can strengthen your brand reputation and make a positive impact. You can raise awareness in many ways such as partnering with local nonprofits, hosting community events, donating a portion of sales, curating your product selection to reflect your values, and more.

      Takeaway: Customers are more likely to stay loyal to a business that shares their values and takes a stance on important issues. This shows customers that the dispensary is more than just a business, but rather a community member that cares about the same issues as they do.

      Engage with your community

      Opening a dispensary plays a critical part in any community. Not only do they offer once-banned medicine and recreational products, but they bring in a tremendous amount of tax revenue.

      The locality of dispensaries also means most shoppers come from nearby. You can attract and retain local shoppers by getting involved in your community.

      dispensary community engagement

      Community engagement ideas to boost local support for your dispensary:

      • Sponsor a highway. Colorado cannabis companies are paying for 66% of the state’s sponsored highway miles.

      • Volunteer for local causes. Cannabis shops in Michigan helped out the community by painting local businesses for free.

      • Offer local discounts. Providing locals with cannabis discounts shows a connection and appreciation for the community around you. They’ll return the favor by frequenting your store.

      • Host events. Dispensary events can be as simple as a “cannabis industry night” where local cannabis employees meet up and talk shop or a full-fledged cannabis festival with vendors, artists, and live music.

      • Sponsor local events. Sponsoring events in your local area helps align your brand with community support and improves brand recognition and visibility. For example, one Massachusetts cannabis dispensary opted to sponsor a road race for St. Patrick’s Day.

      Takeaway: Dispensaries with the community on their side are more likely to increase their market share of loyal, local customers. Find creative ways to show local support.

      Next steps for cannabis retail retention

      By prioritizing customer retention, dispensaries can build a large, loyal customer base and achieve long-term success.

      Setting up a loyalty program is a great place to start. Flowhub's 2-way loyalty integration with springbig and Alpine IQ can help you launch a loyalty program that’s streamlined for your staff and intuitive for your customers.

      Schedule a demo of Flowhub Maui to get started.

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      Madison Giunta

      Madison is passionate about empowering cannabis business owners and operators. She works directly with dispensaries to support their businesses, reach their goals and keep their customers happy.

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