Marketing Moves: Successful Sales Promotions

Keep customers coming back with discounts, rewards programs and other marketing tools

Brand loyalty is not just about repeat purchases, it’s an emotional bond between the customer and the brand. There are many ways to achieve this, and cannabis dispensaries have a range of marketing tools at their disposal to create positive affect that helps this bond.

One of the most popular ways to build brand loyalty is through sales promotions that encourage customers to return to the dispensary. A sales promotion is strategy separate from advertising that can generate interest and create demand for a product. Sales promotions have objectives that differ from advertising; they are developed to motivate buyers, provide benefits and encourage immediate sales. Many sales promotions also integrate longer term goals such as brand loyalty. That means that sales promotions targeting repeat purchases need to provide outstanding customer service to returning customers.

Airlines and hotels frequently use loyalty programs, encouraging consumers to regularly use a specific brand to build up rewards. For example, once you achieve certain status on an airline, you might get an upgraded seat or even earn a free flight. Casinos offer rewards to encourage gamblers to return regularly. Restaurants might offer one free entrée after purchasing 12.

Cannabis dispensaries should follow suit.

But while you are trying to build up regular customer business, it’s important to recognize that bargain-seeking customers might be quick to switch dispensaries when the next sales promotion comes along. So, to do this right, it is critical to create a promotional program that not only generates new business but also retains and rewards existing customers for their continuous patronage.

Here are five suggestions for sales promotions that cannabis dispensaries can use to target either new or existing customers.

– Rewards programs: Customers will return regularly if they are rewarded. Rewards programs are all subject to legal restrictions, but they can be set up in several ways. For example, once a customer purchases a certain amount of cannabis, the dispensary can offer a discount on additional purchases. This program should be set up automatically so the individual customer does not have to keep track. Customer touchpoints can remind them of the reward program as long as the reminders stay within the state’s advertising restrictions.

– Daily specials: A dispensary with a range of products can put certain products “on special” on a certain day or even during a certain time of day. The dispensary can pick a day of the week or a time of day to offer specials on certain products or an overall discount. The other possibility is to create a regular menu of specials for each day, such as “Flower Fridays” or “Sativa Saturdays.” Product specials can also be set up to move slow-moving products. With a range of daily specials, customers return regularly to enjoy their favorites.

– New customer discounts: Getting new customers into a dispensary can be a challenge in an area where dispensaries are plentiful. Offering specials to new customers can get them to try products in your dispensary. Providing a special discount for three visits can create a behavior where the customer continues to return because they like the place, the product or the people even after the discount is gone, as research indicates that three repeated actions can significantly affect individual behavior.

– Free gifts: Free merchandise, such as T-shirts or lighters, can be offered with certain product purchases. Not only can this induce purchases of the highlighted products, but the free merchandise can support your brand, which is a great way to promote it.

– Referral programs: Offer existing customers rewards for bringing in new customers. A discount can be offered to both parties when a purchase is made by the new customer. If the existing customer brings in more than one new customer, the discount (or any other type of reward) should be given for each new referral.

There are no limits to creativity with sales promotions. The idea is to keep customers coming back, but it is very important to provide good customer service each time, because once the rewards taper off, if the customer does not feel they are valued, they will defect to the next rewards program they see.

Marla Royne Stafford, Ph.D., is the William F. Harrah Distinguished Chair and Professor of Marketing at the University of Nevada-Las Vegas. She is the owner and president of MBR Enterprises, a full-service marketing and advertising consulting firm. She can be reached at marla@mbroyne.com or marlaroynestafford@gmail.com.