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Loyalty Program

How To Boost Customer Retention with a Cannabis Dispensary Loyalty Program

By Chase Nightingale

In the fiercely competitive cannabis industry, customer retention is as crucial as customer acquisition. Loyalty programs, known for being a key element of marketing strategies in various industries, can prove to be a game-changer in this domain as well. PayRio, in partnership with SumUp, is set to revolutionize the cannabis dispensary landscape by introducing its cutting-edge Cannabis Dispensary Loyalty Program. This article delves into the intricacies of such programs and how leveraging them can significantly enhance your business prospects.

Understanding the Concept of Customer Loyalty Programs

At its core, a customer loyalty program is a strategic approach to incentivize repeat customers with exclusive discounts, deals, and rewards. The fundamental idea is to spur customers to choose your dispensary over competitors, thereby fostering brand loyalty.

The more lucrative the incentives and deals, the higher the chances of customers frequenting your cannabis dispensary. Consequently, the Return on Investment (ROI) of your business can witness a substantial rise. According to a report from Edelman, customers who consistently patronize your dispensary are likely to spend 67% more compared to new or sporadic clients.

Loyalty Programs: Backed by Evidence

The effectiveness of loyalty programs isn’t based on assumptions but is well-supported by research. For instance, findings from Headset, a Seattle-based cannabis analytics company, indicate that:

  • Half of the cannabis dispensaries in Washington State have implemented a loyalty program.
  • Dispensaries with loyalty programs observed an average basket spend of $37.18 over a 90-day period, marking a 13% increase compared to dispensaries without such programs.

These figures underline how loyalty programs can drive larger transactions among customers.

Six Ways Loyalty Programs Can Reinforce Your Dispensary Operations

1. Retention of Existing Customers

Loyalty rewards such as discounts and exclusive deals can transform your customers into brand loyalists. According to Bain & Co, a mere 5% increase in customer retention can enhance your dispensary operations’ profitability by up to 75%.

2. Attracting High-quality Leads

Customers interested in your loyalty program rewards will sign up, providing their contact details in the process. This gives you a direct line of communication with potential customers, making it easier to convert them into actual buyers.

3. Enhancing Brand Recognition

Regular communication with your customers through emails and texts helps to establish your brand presence in their minds. Over time, this familiarity builds trust and aids in closing sales.

4. Differentiating Your Dispensary from Competitors

A unique, well-structured loyalty rewards program can help your dispensary stand out in the competitive cannabis marketplace.

5. Gaining Access to Valuable Customer Data

Loyalty programs offer insights into customer spending habits, product trends, and spending patterns across different demographics. This data enables you to customize your products to match your customers’ needs.

6. Boosting Customer Spending and ROI

Incentives and special offers encourage customers to spend more at your dispensary. According to the Pareto Principle, the top 20% of your customers contribute 80% of your business revenue, most of which comes from loyalty-program shoppers.

Key Features of an Effective Loyalty Program

Before structuring your loyalty program, it’s essential to consider your dispensary’s priorities or goals. Studies reveal that 53% of consumers abandoned loyalty programs last year, primarily due to irrelevant rewards and intrusive advertisements.

Here are some features that can enhance the effectiveness of any cannabis loyalty program:

1. Store Visits

A visit-based loyalty program offers deals and incentives based on the number of store visits, regardless of the transaction size.

2. Dollars Spent

A spend-based loyalty program is centered around a points system. The more the customers spend at the dispensary, the greater the discounts they enjoy.

3. Sign-ups

Rewarding customers for signing up for the company’s newsletter or mailing list can help you collect valuable customer contact information.

4. Membership Tiers

A tiered-based loyalty program categorizes customers into membership tiers depending on their spending on purchases. As customers progress across the tiers, they enjoy access to even better rewards and discounts.

5. Text Message Marketing and Seamless Integration

Customers should be able to receive consistent communication about the loyalty program on their phones, emails, or apps. This requires seamless integration across these channels.

Tips for Designing and Implementing a Cannabis Loyalty Program

Here are some tips to craft and implement a loyalty program for your cannabis dispensary:

  • Establish clear objectives.
  • Research what rewards would interest your customers.
  • Start with modest rewards and gradually increase them.
  • Keep the program simple, straightforward, and easy to understand.
  • Include personal incentives.
  • Regularly update the program with fresh, relevant offers.
  • Maintain regular communication with loyalty program members.
  • Track your ROI to ensure the program benefits your bottom line.

While implementing a loyalty program has associated costs, its importance in running a successful cannabis dispensary is undeniable. For new retailers, starting a loyalty program from the get-go is crucial. Offering rewards to your customers will help you earn their trust, understand their preferences, and serve them better.


To stay competitive in the dynamic marijuana industry, you must prioritize customer acquisition and retention. Loyalty programs are one of the most effective strategies to foster a sense of loyalty among your customers. Rewarding your customers with discounts and exclusive deals not only makes them feel appreciated but also encourages them to make frequent and larger purchases from your dispensary. With PayRio’s Cannabis Dispensary Loyalty Program, you can leverage these benefits to significantly enhance your business prospects.