Loyalty programs are the most popular way for retailers to reduce customer churn rates.
By enrolling customers into a loyalty rewards program businesses attempt to build better relationships with customers, keeping them happy and coming back for more. Loyal customers spend 60% more per visit and their purchases will make up for the high churn rate among other customers. So if members start leaving its important to find the reasons why as quickly as possible before many of your biggest spenders leave your dispensary’s loyalty program. There are many possible reasons why a customer decides to leave a loyalty program but let's take a look at three of the biggest ones.
Complicated Sign Up/enrollment process
People hate being prompted to give their phone number or email address just as they’re about to complete a purchase and already have one foot out the door. Worst yet is if they actually provide their information only to receive a text or email asking them to create a username and password for an account they’ll probably forget about.
The enrollment process gives customers a first impression of the loyalty program itself, so making it as simple and frustration free as possible couldn’t be more important.
To accomplish this, first off, get rid of those pesky tablet kiosks at checkout. Having a tablet dedicated solely to your loyalty program just takes up extra space and adds another barrier your customer has to get past to join. Springbig’s loyalty program integrates directly into all of the leading POS systems in the cannabis industry to help eliminate this issue.
Springbig also solves the second issue by eliminating the need for users to create an account. Once they decide to join the program and give their email address or phone number, an enrollment link is sent directly to their phone. All they need to do is click - and that's it! They are taken directly to their digital wallet which can be saved right on their phones home screen.
With one text message, you’ve given your customer an account and a web app without a password or a download.
Confusing/disproportional Points Structure
Rewarding points for visits is the traditional structure for customer loyalty programs in retail. A visits-based model is essentially the same age punch-card system that seems to have been working well in the retail industry. But the cannabis space is unlike any other traditional retail market.
Marijuana dispensaries will have a much wider range of customer behavior than traditional retailers where the average purchase amount generally remains the same over time.
A visits-based model rewards everyone equally regardless of how much they’ve spent and is there. If the whole point of a loyalty program is increasing the satisfaction of your biggest spenders and encouraging them to come more often, you should be rewarding them at a higher rate than the average customer.
A structure that rewards points based on dollars spent is the most effective way to allow customers to clearly see how they are proportionately rewarded for their purchase and drive them to spend and earn more.
Poor Communication Practices
he biggest reason customers leave loyalty programs are related to communications issues. There is a communications sweet spot that is very difficult to find where customers feel like their wants are acknowledged and their business rewarded, but at the same time not feel spammed.
You can find this sweet spot by leveraging the data in your loyalty software and using the platform as a true CRM solution instead of just as a text message marketing engine. You may have thought your dispensary POS acted as cannabis CRM, and some do offer limited digital communication solutions. But these are generally impersonal mass cannabis email marketing campaigns sent out indiscriminately with no guarantee of ROI.
Springbig’s platform allows you to segment your customers according to behavior and interest and form a targeted marketing strategy that relies on real-time analytics of your POS data.
Now that you know who to target, you need to keep in line with digital communication best practices to avoid frustrating customers. Using springbig’s autoconnects can help take much of this process off your hands by automating campaigns ensuring customers are kept connected but also rotating campaigns to avoid repetition.