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How do I Design a Rewards Program For Dispensary

published on June 9, 2021
by James Hammer

Dispensaries are becoming one of the most common businesses being opened n the cannabis industry. With each state slowly legalizing cannabis, plenty of entrepreneurs are jumping at the opportunity to open up their operations and make it big in this young yet growing industry. Of course, with the number of dispensaries opening up, that means the competition is going to start getting intense.

A concern that frequently comes to mind for dispensary owners is the industry oversaturating with more stores. Dispensary owners are likely to experience a decrease in sales as more licenses are granted by states as more dispensaries open up. To counter this issue, dispensary owners need to come up with a system that will allow them to develop lifelong relationships with their customers.

Help Scout has published a study showing that after going through a positive experience with a brand, 77% of customers would recommend it to someone close to them. It’s one of the many reasons why customer satisfaction is necessary for the long-term success of your dispensary.

That said, dispensary owners need to develop a program that will assist them with retaining their customers in the coming future. Annex Cloud published a statistic that claims 83% of loyalty reward program members stated that reward programs cause them to continue coming back for more and doing business with the brand. Of course, the key to implementing a robust reward program for your dispensary is to choose one that meets your financial needs and appeals to your customers.

How can you design a reward program that is effective for your customers and dispensary?


How does a reward program help your dispensary?

The number of dispensaries that offer similar products that you do means that customers have the choice to choose whichever dispensary is most convenient. So how do you ensure that your customers return to yours? Implementing an easy-to-understand and realistic reward program that places the value of your customer time at the lead of their experience.

Remaining ahead of the competition is a challenging endeavor in an industry with a limited market share. The primary driving force behind your reward program is customer satisfaction. Content customers are more willing to tell their friends about the excellent experience, and those friends are more likely to check out your business. That word-of-mouth marketing strategy is valuable to your business and should be targeted with every interaction.

Reward programs ensure your customers keep their attention on your dispensary as the source for reliable products while offering incentives for customers to come back, resulting in an increased sense of loyalty. Customers invest in a business because of the emotional connection they develop with a given group of personal and the smooth experience. When you combine that connection with an exceptional experience and customer reward program, it maintains your position as the best dispensary for cannabis products.


Spend or Visit based reward program?

Two types of reward programs that are implemented by dispensaries are the spend-based and visit-based programs. In the case of visit-based programs, your dispensary will reward customers based on how many times they have visited your store. Depending on how you have designed your rewards program, the customer may earn a certain amount of points or dollars per visit. On the other hand, spend-based programs have the customer earn points based on how much they spend.

Generally, the spend-based reward program is the most commonly chosen one since it provides the most benefits for a dispensary. Customers tend to find spend-based programs more appealing because they feel they are being rewarded more when they spend more on the store’s products. For visit-based programs, it can cause lower spending per visit.

Spend-based loyalty programs actively encourage customers to spend more. Since the more a customer spends per visit, the quicker they collect points and redeem them. Spend-based programs allow owners to track accurately how much the program will cost them. Plus, it provides more comprehensive insights into a person’s shopping behaviors and the ROI of the program.

Once you have chosen the reward program for your dispensary, you need to make sure your customers are engaging with the program. You need to ensure the program is accessible for every customer by granting them a free membership or even a signup bonus. In this case, make the first few tiers easy to climb, so customers will receive instant gratification and a powerful incentive to keep spending at your dispensary to reach the higher tiers.


Designing and implementing your reward program

Knowing the perks and functionality of a reward program is only the tip of the iceberg. To ensure your reward program is successful, you need to take your time designing and implementing it. Here are some ways you can develop your dispensary reward program.


Establish your goals

Are you attempting to attract customers, retain customers, increase the frequency of their visits, or increase the average order value? The framework and reward of your program need to match your goals. You should also take some time to figure out what your customers want. Conduct research on what your customers want to see from this program Surveys are excellent ways to see what kind of program and rewards they are interested in acquiring.


Build up and keep it simple

When you are developing your program, begin small and build up as you go along. It is better to gradually enhance the pers and incentive of loyalty programs than making a grand promise that you’ll most likely be unable to keep. For example, if you promise to give out too much of a popular flower, you could run out quicker than you could resupply. That will eventually lead to problems with other customers who enjoy the said product but cannot buy it because you gave them away to higher-tiered customers.

Plus, you want to make sure that the reward program is not overly complicated. Making your program complex will cause your customers to walk away from your program instead. Keep the process simple for not only your customers but staff members too.


Engage your customers

You need to ensure that your program is easily accessible to your customers and need to make sure your first few rewards are easy to acquire so customers can feel a powerful incentive to continue shopping at your dispensary. Send them a text or email reminders and update them on the latest rewards and promotions. By maintaining contact with your customers through text-based messages and email marketing, you not only remind them about your program but show that you value them as customers.

Keep your customers informed beyond the dispensary through SMS text messages and email marketing programs. Build a custom distribution list for your members using the data from a CRM platform. When that platform is integrated with a POS, the system automatically gathers the information you need to generate a valuable email distribution list so you can get the word out to your reward members about the latest promotions, rewards, and benefits. Furthermore, you should also consider integrating unique and personal incentives such as exclusive events or outings.


Incentivize the signup process.

Most people find the idea of signing up for a reward program tedious and time-consuming. By not providing them with the right incentives, there is a decent enough chance that your customers won’t be interested in sharing their personal information. That is especially true for dispensaries since they are operating illegally on a federal level.

So what can you do to have them sign up on your reward program without turning their customer journey into a negative experience? A common strategy used among most businesses is to use cashback credit on every purchase for anyone who signs up. If your dispensary decides on using cashback credits, points-per-dally is far more effective than visit-based. Another method would be to establish a monthly raffle, with several prize winners, with incentives such as store gift cards or heavily discounted cannabis products.

Of course, you need to ensure that your local regulations allow you to pull off the heavily discounted one. Some local laws don’t permit cannabis to be sold below a particular price. It’s also an excellent way to grow your database with new customers while incentivizing your existing ones.


Remain relevant and fresh

Remember that the cannabis industry is fast-paced. The industry is constantly changing daily, and the number of competitors is growing as the laws become looser. You need to ensure that your reward program remains fresh and relevant by making adjustments to it when required. Consider coming up with unique promotional rewards that will guarantee to continue attracting customers. Some products are only available during a specific season. So you could use those as a reward for your members, for example.


Watch your ROI

You need to make sure that your reward program is providing you with success. Providing your customers with value is something that you want to continue doing, but you need to ensure that it’s a profitable endeavor as well. Remember to keep a close watch on your program to make sure it’s benefiting your business.



Setting up a rewards program can make a tremendous difference for your dispensary, but it takes the right system in place to ensure your customer’s return. Make sure you take the time to consider what suits your dispensary needs. Reach out to your existing customers and ask them for feedback on what they would like to see in the reward program and consider your options. Just make sure to pace yourself when developing your reward program, and you will end up with something beneficial to your business.