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Knowledge & Insights

5 Tactics to Drive Repeat Business for Your Cannabis Company


The cost to acquire a new customer is five times that of keeping an existing one – here’s how to recruit loyal, repeat customers. 

  • Offer a points-based loyalty program to build your customer base.
  • Cross-promote your products with other local businesses, like restaurants and bars.
  • Host events at your dispensary to help customers learn about your products. 

Speak to one of our experts for more ways to drive repeat business at your cannabis dispensary.

As with any industry, loyal customers are profitable customers.

According to the Pareto Principle, 20% of your customers account for 80% of revenue. The cost to acquire a new customer is five times that to keep an existing one.

In the cannabis market, this trend is no different.  It’s all about increasing the customer lifetime value of your business, a key metric that EVERY investor or potential buyer will want to know.

So the question remains, how can cannabis operators build their profit margins by recruiting loyal, repeat customers?

We spoke with a few of our clients to gain insight to what they see working in the field today, and here are a few tactics to drive repeat business at your cannabis dispensary.

One note here is that ALL of these tactics can be translated to every other cannabis vertical.  Every step of the supply chain has customers, so do your best to take the general principles and apply them to your business.

Implement a Cannabis Loyalty Program

Loyalty programs are proven to work – and work extremely well. But it’s how you structure your loyalty program that can make the difference in driving repeat business.

If you’re just starting out, it’s an easy win to offer a points-based loyalty program to build your customer base. In this scenario, a customer will accumulate points each time they visit your dispensary and make a purchase. Over time, they can cash in points for discounts on flowers, concentrates, or edibles.

For more established cannabis dispensaries, the loyalty program might look slightly different. You may already have repeat customers – and therefore the goal isn’t to generate more frequent visits, but to increase the basket size of each customer.

In this instance, your loyalty program should be structured to reward dollars spent. For example, every dollar spent equals 100 points; customers can then trade in points for things like a free preroll, a 20% discount, or a free half joint. The more points you accumulate, the better the rewards.

Also, you can combine the two practices of per-visit-rewards and dollars-spent-rewards to create a more intricate system that almost feels like a game to the customer…and everyone loves games!

Here are some proven tips for using your loyalty program to grow repeat business:

  • Offer quick rewards. The research study showed that customers who opted in for an “Instant Cash” program spent 68% more within a two week period than customers who weren’t getting instant rewards.
    • Offer a bigger reward for long-term customers. Bigger rewards can be utilized to encourage repeat business over the long term. Customers who save up for bigger rewards statistically end up spending the most.
  • Offer variable rewards.  The excitement that builds each time a new reward becomes possible is such a dopamine rush that clients will remember how exciting that was as they walk out the door.
  • Loyalty programs work regardless of the reward. Research shows that once you sign someone up for a loyalty program, you’ve won their business. “According to the Spiegel study, rewards programs motivate your lower-spending customers even more than those who are already regulars.”

Expand with Cross-Promotion

Work with other businesses to expand your footprint and encourage return visitors.

One cannabis operator cross promotes with restaurants and bars nearby to bring customers into its loyalty program. Customers who spent $35 or more at a restaurant could take the receipt to the cannabis dispensary and receive a pre-roll for a penny. The restaurant would also stamp the customer’s dispensary loyalty card. It’s a win-win for the restaurant and the dispensary.

Beyond the financial benefits, you are now become part of the community cloth or fabric that the current status quo operates in.  And as your relationship and association with other local businesses become more apparent, you can then parlay their goodwill into your business.

Here’s a great example of cross promos in the wild.

Simply Pure, a dispensary in Denver, created something called “Passport 420”. Customers could get an edible or a pre-roll for making a purchase at the five participating businesses. By purchasing a margarita at a nearby Mexican restaurant, for example, a customer would get a stamp in their passbook which could later be traded in at the dispensary.

If there aren’t restaurants or bars in your area that you can work with, think about some natural partners who can help you drive repeat business. Holistic wellness centers, yoga instructors, and movie theaters are all potential partners who can promote your loyalty program.  Again, take these tips and translate them to your market for the most success.

Host Regular Events

In-person, live events can be highly effective at bringing in new customers who may not know much about the industry. But, dispensaries can also play a role in catering to repeat customers looking to expand their knowledge.

Host events that appeal to seasoned veterans in the cannabis industry: a glass blowing workshop for blowing your own pipe, for example. Or partner with a local bakery to do a workshop on making cannabis butter. 

Consider the phrase edu-tainment.  Educate and entertain your clients.  You don’t just have to be a cannabis shop.  Think bigger; think about being a community hub that infuses normal every day activities with a bit of cannabis.

Education doesn’t have to be limited to the new entrants to this market: by continually providing useful information, you’ll build trust with customers and become the go-to expert catering to all their cannabis needs.

Serve the Baby Boomers

Our current dispensary clients tell us, and research shows that Baby Boomers tend to make the most loyal customers.

According to analysis by the Brightfield Group, “Among both recreational consumers and medical patients, older generations are much more likely to be loyal to their dispensary or provider, with 60% of those over 55 having used only one store or dispensary’s services over the last 12 months, and 38% having shopped at between two and four during the same time period.”

Baby Boomers are a valuable customer group. Baby Boomers spend more than millennials or Gen Zers. Keep this in mind when stocking inventory and running your marketing strategy.

It could be attributable to many factors, but one that stands out from our discussions with operators is that the baby boomer generation values trust and consistency, especially as they get older and see the world changing quickly in-front of them. 

Use Mobile Offers

Mobile marketing works in nearly every industry. Analysts have found that mobile offers are being redeemed at 10 times the rate of old print coupons.

Set up a geofence or an SMS service to remind customers to visit your store when they’re in a certain area, at a certain level on the loyalty program, or haven’t visited in a certain number of days.

Keep the message simple – limited to 160 characters – and give customers something to get excited about (for example, a 10% discount if they come in before Monday). This again is where variable rewards can come into place and will make them read every text message they get from you.

Make sure you set up the program so that customers opt in which could be the first time that they visit the shop.  Further, make sure that you have the infrastructure in place to secure their personal data. A CRM platform can help you manage the campaign as well as keep track of what messages are working best, and in a perfect scenario this all ties into your POS system so that you can track changes in sales.

Are you looking with help to make your cannabis business profitable?  It’s tough to deal with all of the taxes, compliance laws, and everything in between.

If you need help, then please talk to one of our experts about ways to grow and expand your cannabis operation by clicking the “Get Started” button below.

Request a Free Consultation & learn how GreenGrowth CPA’s can help your business grow.

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