Increase the Lifetime Value of Your Dispensary Customers With Retention Marketing

Dispensary owners know how hard it can be to win a new customer. But what about keeping the ones you already have? Customer retention is the secret sauce to higher profits and sustainable growth. By focusing on retention marketing – getting past buyers to come back more often and spend more over time – you can significantly increase each customer's lifetime value (LTV).

You can leverage text message marketing, email campaigns, display ads, and mobile apps to turn one-time shoppers into loyal regulars. You don't have to do it all alone – a partner like DispoJoy can handle the heavy lifting for you.

Why Retention Marketing Is Essential for Dispensaries

Cultivating repeat customers isn’t just a nice-to-have – it’s fundamental to your dispensary’s success. Plenty of data shows that selling to existing customers is more cost-effective than acquiring new ones. It also costs significantly more to attract a new customer – by some estimates, 5 to 20 times more expensive – than to retain an existing one. If you focus on keeping the customers you’ve already paid to acquire, you’ll get much better ROI from your marketing spend. A loyal customer will visit more often, spend more per visit, and even refer friends. Cannabis dispensaries often find that a small core of repeat customers (your local “regulars”) makes up a big chunk of revenue. Keeping those regulars happy and converting first-timers into repeat buyers is one of the fastest ways to grow your bottom line.

A strong retention rate is a sign that your business is doing things right, including product quality and customer service. If people are coming back, it means you’re meeting their needs.

The Challenges of Dispensary Customer Retention

If retaining customers was easy, every dispensary would have a lobby full of customers. The reality is that retailers are facing more competition than ever when it comes to customer retention. New dispensaries seem to open daily, and many shoppers are happy to look around for the best deal. Cannabis consumers are often price-sensitive and promotion-driven, so they might chase today’s discount at a competitor if given the chance. 

Another challenge: marketing restrictions. Traditional advertising channels that other retailers use freely are heavily restricted or outright banned for cannabis businesses due to regulations​. This means acquiring new customers through advertising is tough – and it makes holding onto the ones you've got even more critical. Once a customer has discovered your shop, you want to stay on their radar, because you might not get a second chance if they wander off. Reaching them can be tricky if you rely on limited in-store interactions or they aren’t following your social media.

Compliance and communication hurdles also play a role. You can’t just spam people with marketing – you need permission (opt-ins for texting/email) and you must navigate rules around cannabis advertising content. Plus, you’re busy; running a dispensary already involves long hours. Many teams don’t have the bandwidth to execute consistent retention campaigns across multiple channels.

How Text Marketing Enhances Repeat Purchases

When it comes to immediately grabbing your customers’ attention, few channels beat a simple text message. SMS marketing is incredibly powerful for driving repeat purchases in cannabis retail. Why? Text messages get seen almost instantly. Studies show that marketing text messages boast about a 99% open rate. And 90% of texts are read within just three minutes of being sent​. That means when you send a promotional SMS – say, a daily deal or a friendly reminder that your customer’s favorite strain just got restocked – you can be confident the majority of recipients will actually see it right away. This immediacy is gold for prompting quick return visits (“Flash sale for the next 3 hours!”) and for staying top-of-mind.

A short SMS about a new product drop or an upcoming event keeps your dispensary in the conversation, so your customers don’t forget about you or get swayed by someone else.

That said, effective cannabis SMS marketing is more than just blasting out the same message to everyone. Relevance is key. If you send generic texts that don’t speak to a customer’s interests or needs, they may start ignoring you – or worse, opt out. Imagine a customer came in for organic CBD gummies and you keep texting them deals on high-THC concentrates; chances are, they’ll tune out. As Happy Cabbage Analytics observes, sending a blanket promo text to all your customers can backfire if the content doesn’t match their preferences or location. Those customers “wouldn’t convert again or potentially purchase from your competitor” if the message isn’t relevant​. 

Another tip: use text messaging for triggered campaigns based on customer behavior. For instance, if someone hasn’t shopped in 60 days, send a “We miss you – here’s 15% off your next purchase” text to win them back. If they browsed your online menu and left items in the cart, a quick reminder via SMS can nudge them to complete the purchase. Cannabis retailers using these kinds of text campaigns often recapture lapsed customers who haven’t visited in a while​. Each win-back is added revenue without acquiring a new customer. Over time, these retention texts can build a habit for the customer to always check your dispensary first when they’re ready to buy.

Build your opt-in list (collect phone numbers at every opportunity, with proper consent), segment your audience, and send value-packed messages (exclusive deals, personalized offers, product drops). Be consistent but respectful with your cadence – you want to stay in touch without feeling intrusive. When done right, text marketing can dramatically boost repeat purchases and keep your best customers coming back through your doors.

The Role of Email Marketing in Customer Engagement

Email excels at customer engagement – it’s a channel where you can tell a deeper story, educate your audience, and nurture the relationship over time. While a text is short and sweet, an email can include rich content: attractive images of new products, special discounts, or a longer message thanking customers for their business. This kind of content helps keep customers interested and emotionally connected to your brand between purchases.

Email is also a practical workhorse for driving repeat sales. You can use automated email campaigns to stay engaged with customers at key moments in their journey. For example, set up an abandoned cart email – if an online shopper leaves without checking out, send an email a few hours later saying “Still thinking it over? Here’s 10% off to complete your order!” This tactic is proven to bring back high-intent shoppers who might otherwise forget or get distracted​.

You can also automate post-purchase emails that recommend other products (“Since you liked that vape cartridge, you might love these new flavors...”) or ask for feedback and reviews. These touchpoints keep customers interacting with your dispensary even when they're off-site.

Another powerful use of email is to run loyalty and referral campaigns. If you have a loyalty program, email is a great way to update members on their point balance or remind them of rewards (“You’re just 10 points away from a $10 reward – come visit and claim it!”). Loyalty members are extremely valuable – 83% of consumers say that being part of a rewards program makes them more likely to continue doing business with a brand​.

Email can reach a broader audience than texting and doesn’t require immediate action. Many customers actually appreciate thoughtful, informative emails from their dispensaries, as long as they’re not too frequent or salesy. The key is to provide value in every send. This could mean sharing education (like dosing tips or strain spotlights), announcing exclusive in-store events for subscribers, or delivering subscriber-only discount codes. When your emails consistently offer something useful or interesting, customers will start to look forward to seeing your name in their inbox.

To maximize email engagement, we segment your email list just as we would with texts. Not every customer should get every email. You might have a segment for medical patients who get invites to patient appreciation days, a segment for VIP high-spenders who get first dibs on limited product drops, etc. Tailor the content and offers to each group’s interests. Over time, a strong email marketing program will nurture casual customers into loyal fans.

The Power of Display Ads for Brand Reinforcement

Have you ever browsed a website and noticed an ad for a dispensary appearing on the sidebar or banner? That’s not a coincidence – that’s retention marketing at work through display ads, specifically retargeting. Display ads are a visual way to reinforce your brand and keep it in front of customers online. Even if cannabis advertising is restricted on major platforms, there are cannabis-friendly ad networks and channels where you can serve banner ads or native ads to your audience. The idea is to show your dispensary’s name, logo, or latest promotion to people who have already shown interest – for example, past visitors to your website, app users, or existing customers on your email list (via a matched audience). This consistent exposure builds familiarity and recall, which is crucial in driving repeat business.

Even if they don’t click the banner ad itself, the message is sinking in: “Oh yeah, that dispensary has the products I like.” When it comes time for them to re-up their supply, your brand is top-of-mind, thanks to those visual reminders.

Another benefit of display and retargeting ads is influencing purchase behavior. Consumers often need a few touchpoints before taking action. Retargeting ensures your touchpoints follow them across the web. For example, after a customer visits your online menu, you can retarget them with an ad featuring the exact product category they browsed (“Shop concentrates – 10% off for loyalty members this week!”). Seeing this relevant ad a day or two later might prompt them to come back and purchase. In general, people who see retargeted ads multiple times are far more likely to convert.

We use compliant ad networks to stay visible to your audience. This helps you bypass some restrictions by meeting customers where they are and ensures your brand is seen there regularly.

To get the most out of display ads for retention, make sure your creative is on-brand and your message is clear and inviting. Think of display ads as digital billboards that keep your dispensary in your customers’ line of sight. Over time, that consistent presence builds trust and familiarity, reinforcing the idea that your brand is the go-to choice.

Mobile Apps Improve Loyalty and Direct Communication

Having your own mobile app is becoming a must have for dispensary customer retention. A mobile app puts your dispensary in your customer’s pocket – with your icon on their home screen, just a tap away. This creates a level of convenience and constant presence that even your website or social media can’t match. In fact, data shows that customers who use a dispensary’s mobile app tend to be far more valuable over their lifetime. App users convert 3x more than mobile websites on average. That is real revenue impact: those who download and engage with your app shop more frequently and spend more when they do. It makes sense – if your app provides a fast, personalized way to order or browse, customers have less friction and tend to give you more of their business.

Got a flash sale or a new product line? You can send a push notification to all app users instantly, and you know they’ll see it when they check their phones. Push notifications give you a direct line to your customers for real-time communication, much like text messages, but within the branded environment of your app. Even better, they’re free to send (no carrier fees) and you can include rich media or longer text if needed.

With a mobile app, you can also leverage features like location-based alerts (“You’re near our downtown store – stop in for 10% off today”) and in-app messaging for two-way communication or support.

The result of this always-on, direct communication is higher loyalty. Customers who download your app feel like insiders – they get the first look at new drops, special app-only discounts, and a convenient way to shop. They’re also reminded of your brand frequently (every time they see a push alert or even just scroll past your app icon). No surprise that consumers tend to make more purchases via apps. Over half of all mobile commerce transactions (54%) are made through mobile apps (versus mobile websites), and shopping apps generally lead to larger order volumes and stronger customer loyalty.

Let DispoJoy Handle Your Retention Marketing

Implementing retention marketing can feel overwhelming – especially when you’re busy managing day-to-day operations. That’s where Dispojoy comes in. We handle all aspects of retention marketing. Our team will manage your text message campaigns, craft engaging emails, run targeted display ad programs, and even build and maintain your own mobile app for customer loyalty. 

We offer simple pay-per-campaign pricing and don’t hold you to any sort of retainer. Schedule a call with our team today.