Cultivating Customer Loyalty in a Competitive Market
Competition in the budding cannabis industry is fierce. After many companies turned to digital ordering and delivery options as a result of the pandemic, consumers now have even more products and brands available to them.
Advertising restrictions and regulations governing the sale and consumption of cannabis complicate matters further for brands, limiting their marketing efforts to attract and retain customers.
So how do you rise above the noise and connect with your audience segments?
The key to establishing a successful business in this industry lies in your ability to adapt quickly to change and nurture lasting customer relationships over time, contributing to greater customer loyalty.
What is Customer Loyalty?
According to Oracle, “customer loyalty describes an ongoing emotional relationship between you and your customer, manifesting itself by how willing a customer is to engage with and repeatedly purchase from you versus your competitors”.
To achieve this, you’ll need to build trust with your target audiences. Start by creating positive experiences—both online and in-store—that your customers will come to rely on and enjoy.
Additionally, quality customer service is a must! This involves helping your customers easily find what they’re looking for and continuing to cater to their needs. Doing so in every aspect of your business operations and across each of your channels will go a long way in establishing the level of loyalty you desire.
Measuring Customer Retention
Loyal customers make repeat purchases, interact with your brand, and refer their friends. Customer retention is a metric used to track these engagements and the resulting sales.
By tracking sign-ups, purchases, and referrals, you’ll have a better understanding of and connection with your customers. You’d also be able to measure the behavioral and emotional loyalty of your customers, such as purchasing products to obtain rewards points.
Offering valuable benefits backed by quality customer service will have your customers eager to return. In fact, existing customers are 60-70% more likely to convert compared to new customers (at only 5-20%). Returning customers also tend to spend more money than new customers.
How to Keep Customers Coming Back for More
Finding ways to bring in new customers is one thing, but establishing trust to keep existing customers is a whole other factor that needs to be considered.
Targeting repeat customers, creating loyalty programs, providing high-quality content, and more have proven to help increase sales and customer retention.
Here are three core tactics you can leverage to increase repeat business:
1. Customer loyalty programs
Creating a value-added loyalty program is a great way to establish trust with your customers, and give them a reason to come back in the future. A well-executed loyalty program can:
- increase the number of items in shopping carts
- incentivize customers to return
- and help your business develop a targeted marketing campaign.
According to a recent study, a dispensary in Washington saw a 13% increase in cart spend from loyalty program shoppers compared to non-program customers.
Loyalty programs also help drive sign-ups for newsletters and consequently grow your contacts for remarketing campaigns, allowing you to contact customers about future deals and promotions.
2. Social media campaigns
Establishing successful social media campaigns can help you find new leads and keep your diverse audience segments engaged over time. An active social media presence can develop a sense of trust and community amongst your customers.
For example, nearly 62% of millennials say that they would be more loyal to brands that use social media to engage with customers.
Enlisting brand ambassadors is a great way to leverage influencer marketing. Ambassadors could be employees, existing loyal customers, or anyone who is willing to use their influence and be a vocal supporter of your brand and products on social media.
Creating and maintaining a strong online presence helps foster relationships with new and current leads and builds the trust needed for conversions.
3. Customer feedback
Encouraging your customers to provide feedback via surveys and web reviews will help you better understand what is and isn’t working for them. These insights will help you make informed decisions and adjustments to your business.
For example, Fairwinds—a Washington-based cannabis product manufacturer—added a QR code to their products, linking a survey that rates the user’s experience. Using direct input from consumers allowed the company to tailor its products to their customers’ needs.
Online reviews help other customers learn more about each product and make informed decisions about their purchases. Maintaining a conversation with your customers fosters open communication, providing growth opportunities.
Summing it All Up
Cultivating customer relationships is all about keeping the customers you worked so hard to acquire, providing them with excellent in-person and digital experiences, and continuing to offer value.
Customer retention strategies provide—and help extract—more value from your existing customer base. Loyalty programs, social media campaigns, and customer feedback are incredibly important in building relationships and increasing your return on investment.
Strong customer loyalty, especially in the cannabis industry, is essential in sustaining repeat business. Nurturing these relationships can build trust with your customers and attract new leads along the way.
Looking for additional guidance or assistance implementing customer retention strategies? Drop us a line!