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Building a Profitable Dispensary Loyalty Program

The cannabis market, renowned for its dynamism and fierce competition, demands strategies that ensure consistent client retention. One such strategic tool is the dispensary loyalty program, a mechanism that, when executed with preciseness, can become indispensable for dispensaries. As active practitioners in the landscape, we provide some brief insights into our wins and losses.

What is a Dispensary Loyalty Program?

A dispensary loyalty program is a structured marketing effort rewarding and encouraging loyal buying behavior. Essentially, a dispensary's loyalty proposition offers added value to consumers' repeat patronage. The result? Increasing purchase frequency and reducing the average time between purchases drive customer lifetime value and provide dispensaries with granular data on consumer purchase patterns, enabling more personalized marketing strategies. From here, audience segmentation and personalization become the name of the game.

4 Types of Cannabis Loyalty Programs

While the foundational concept of a loyalty program is uniform, the execution can vary based on several factors.

Points System:

The quintessential model wherein customers accrue points proportional to their purchase values. Later, customers redeem points in exchange for products or discounts. The redemption process must be straightforward to ensure continued engagement.

Tiered Programs:

This operates on a hierarchical system. The more frequent the customer interaction, the higher the tier they achieve, leading to superior rewards. Each level must offer an increasing amount of perceivable value to motivate progression.


A model where customers pay a recurring fee to access exclusive offers or products. Subscriptions guarantee consistent revenue, but the offerings must be compelling enough to justify the subscription cost. However, A program like this is not feasible for most dispensary owners.

Referral Programs:

Leveraging the potency of word-of-mouth rewards customers for referring new patrons. It's a dual-benefit system that extends reach while ensuring the referrer remains invested.

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How Loyalty Programs Can Impact Your Dispensary

There are pitfalls in loyalty program implementation that can inadvertently drain your dispensary's money and cost your staff's time:

Overcomplicated Mechanisms:

Complexity can deter engagement. Ensure that the program is easily comprehensible to the average customer.

For instance, if you’re using a points system, a straightforward "10 points per dollar spent" is much more digestible than a convoluted formula where different products have varying point values. Regularly gather customer and frontline staff feedback to understand any points of confusion and streamline accordingly.

Incommensurate Rewards:

The perceived value of rewards should align with the effort or expenditure required to obtain them.

For example, if a customer needs to spend $500 to redeem a reward worth only $5, they might feel shortchanged. Instead, offering tiers of rewards, where $100 might get a $10 reward and $500 could secure an exclusive product or larger discount, feels more proportional and encouraging.

Opacity in Terms:

Any ambiguity or hidden conditions can erode trust, negating the program's primary objective.

For example, if there's a stipulation that points expire after a certain period, the program should communicate this on the front end of the transaction or loyalty opt-in. Consider sending reminders to customers whose points are about to expire, reinforcing transparency and encouraging another visit.

Optimizing Your Dispensary's Loyalty Program

Constructive recommendations for either refining an existing program or initializing a robust one are as follows:

Data-Informed Decisions

Analyze consumer purchase trends and adapt the loyalty program to align with their preferences.

Implement a CRM (Customer Relationship Management) system that tracks purchasing behaviors. For example, if you notice that a significant portion of your clientele purchases CBD products every Friday evening, consider offering bonus points or a special discount on CBD products during that time frame to incentivize purchases further.

Engage and Solicit Feedback

Direct feedback can be invaluable. Deploy feedback mechanisms such as surveys or focus groups.

After a purchase, send an automated email to the customer with a short survey link. Incentivize survey completion by offering a small bonus in loyalty points or a discount on their next purchase; this not only garners feedback but also encourages a subsequent purchase.

Periodic Evaluation

Look for client testimonials and reviews. Long-standing client relationships indicate consistent performance.


A well-structured loyalty program is only as good as its reach. Utilize multiple communication channels for promotion. We prefer to use AlpineIQ to accomplish this.

Beyond in-store promotion, run a social media campaign specifically for your loyalty program. Highlight testimonials of customers who've benefited from the program. Create a series of posts detailing how the program works, the rewards on offer, and special promotions linked to the program. Encourage shares and tags for a small bonus, thus utilizing your existing customer base to spread the word organically.

Collaborating with CAA to Refine Your Dispensary's Loyalty Program

We distinguish ourselves as eminent authorities on cannabis marketing. Our insights are first-hand and rooted in empirical knowledge and real-world application. Grasping the intricacies that dispensaries confront, we offer advice and implement comprehensive solutions that acknowledge your unique business dynamics and local competitive landscape.

Looking for Dispensary Email Marketing Services?

Eric Allred

Head of Product

OCT 3, 2023, 10 Min


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