Every entrepreneur knows the secret ingredient to a successful business is customer loyalty.
It makes sense, then, that creating a strategy to grow your cannabis business while keeping your customers coming back for more is crucial. But it’s easier said than done: customer acquisition and long-term retention often comes at a cost, which can be tough on new and small dispensaries trying to stay competitive.
HubSpot defines customer acquisition as the process of getting potential customers to buy your products. Customer acquisition is important for businesses of any age and size. It allows a business to:
Being able to systematically attract and convert new customers keeps companies healthy and growing—and investors happy.
On the other hand, customer retention refers to the ability of a business to, well, retain customers. Customer retention is impacted by how many new customers are acquired, and how many existing customers "churn". In the world of cannabis retail, churn would be defined as shoppers who don't return to your dispensary.
Since cannabis is still federally illegal in the U.S., all plant-touching businesses are banned from traditional marketing practices, like social media and mainstream digital advertising. As a result, most cannabis retailers are starting to invest a significant amount of time and resources in customer engagement and retention efforts.
Due to the extraordinarily high costs of opening (and running) a dispensary, some retailers try to pass off certain transaction fees to customers who opt to pay in-store via cashless ATM. The thought process here is, customers are already used to paying above retail prices due to high cannabis taxes. What difference would a few more dollars make? Well, as it turns out, a lot—a recent survey of U.S. shoppers showed that 49% reported abandoning online purchases due to fees added during checkout.
In another survey, 85% of Americans reported encountering an unexpected fee during checkout. Two-thirds of those shoppers agreed they’re being asked to pay more in hidden fees than they did just five years ago. These surprise charges ultimately impact overall customer satisfaction, and could even discourage customers from returning.
One of the most common cannabis payment processing systems is in-store debit by way of cashless ATM. A cashless ATM is simply a terminal that allows you to run an ATM card for a certain amount, debiting directly from a customer’s bank account, usually for a standard ATM fee. Rather than having a large ATM machine that may attract unwanted attention at your store, the intent here is to use a mobile terminal that doesn’t require replacing large quantities of cash.
The downside? Cashless ATMs require a processing fee to paid by the customer at the time of purchase.
Bank-to-bank transfers offer the most hope in the form of digital payment systems that connect to a shopper's bank account in seconds.
The first of its kind, Dutchie Pay is a fully-integrated digital payment solution that both dispensaries and consumers can trust. Using a closed-loop automatic clearing house (ACH) solution, Dutchie Pay allows consumers to purchase their favorite cannabis products while automating compliance so that dispensaries can focus on growing their business.
Oh, and did we mention that over 70% of shoppers who use Dutchie Pay at a dispensary return to that dispensary within 90 days?
Let's grow together. Contact us for a demo today.