Or should I say, weed. Today’s topic: cannabis store loyalty programs.
Where recreational grass is legal, it didn’t take long for regional chains to emerge. Here in the Pacific Northwest, they include Mr. Nice Guy, Electric Lettuce, Kaleafa, and Nectar. There are also larger multi-store operators; Curaleaf has more than 140 US locations, and High Tide operates more than 200 stores across Canada under several brands.
Most chains, though not all, offer loyalty programs.
Given the importance of customer retention, it’s no surprise that marijuana, like other industries, tries hard to keep their regulars, and turn casual shoppers into – I was going to say habitual customers, but maybe that’s not the best word for this product.
I was curious to see how much traction programs have gained, and how sophisticated they have grown, having started as little more than punchcards. A few statistics published late last year by Flowhub – a provider of services for cannabis retailers – suggest significant penetration among the estimated 64 million pot smokers in the US.
You might say enrollment is high. And so is member spending. Flowhub estimates average customer opt-in is about 24%, while the best performing outlets see more than 50% of customers participate. The average member shops 40% more often than non-members, and they spend an average of $134, while the non-member’s average order is $89.
Cannabis stores face the same problems as other retailers when it comes to retention and engagement. Since many programs are promoted with instant savings when you sign up, about 40% of customers join for the discount, and never return.
The programs I looked at offer a broad range of rewards, benefits, and messaging, including simple cashback, earning and redeeming points for discounts, birthday gifts, members-only deals and early access to new products.
At least one chain, Nectar, seems to have ended their Nectar Rewards after having previously featured it prominently. Perhaps that program didn’t perform as hoped. As we’ve written, when a program fails, it is usually due to flaws in program design and economics.
Electric Lettuce has a cleverly positioned and creatively marketed program called Friends in High Places. Amusingly enough, the program page on their site is filled with typos and other sloppy errors. The loyalty page offers “Monthly onuses,” “ember’s Only” deals, and their welcome message misspells the program’s name.
Many people today don’t notice errors like these. And that probably goes double for EL’s customer base. Meanwhile, loyalty programs continue to proliferate across industries because, when well-designed, they work. Even with typos in the copy. Your thoughts?