How to Build a Loyalty Program for a Vape or E-cigarette Store
July 20, 2020
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As you’re no doubt already well aware, vapes and e-cigarettes are a booming industry, with no signs of slowing down. A vape loyalty program helps you retain customers and boost brand loyalty in a highly competitive market.
According to market research group Euromonitor, there will be more than 55 million people vaping globally by next year. Meanwhile, the global e-cigarette market is estimated to now exceed $20 billion.
When it comes to vape loyalty programs, it’s not as simple as offering customers a discount on every 10th purchase. For your loyalty program to be effective, it needs to reward various consumer behaviours (not just spending) and create a community around your brand.
We’ll cover all this in the points below, but first things first…
Why is it Important to Have a Loyalty Program for your Vape Shop?
Depending how much research you’ve done, you might already be aware of some of these golden facts and stats that we loyalty marketers love to use:
1. Increasing customer retention by 2% is the equivalent of cutting costs by 10% (Emmet & Mark Murphy).
2. Increasing customer retention by 5% can result in a 125% increase in revenue (Bain & Company).
3. Your existing customers spend an average of 67% more than those who are new to your business (Bain & Company).
While these statistics apply to just about any business in any industry, there are a few things unique to the vape and e-cigarette industry that are worth mentioning.
Vapers carry a much longer customer lifetime value than that of, say, a new mother purchasing baby products, for instance. Whereas the baby products supplier will lose that customer’s business once the baby grows up, a vape or e-cigarette store can retain its customers indefinitely.
As long as the shop has a good loyalty program, that is…
In an industry that’s far more competitive than most, businesses must go above and beyond to stand out from the crowd of vape and e-cigarette shops that consumers can choose from (both in-person and online).
So with that in mind, let’s discuss your options for creating an effective vape loyalty program.
How to Build a Loyalty Program for your Vape or E-cigarette Store
To create a vape loyalty program, you’ll first need to figure out a rewards structure. Typically, there are three ways in which businesses reward their customers.
An item-based system offers customers a stamp with every purchase of a particular item (a coffee, car wash or haircut, for example). After X stamps, the customer redeems their reward and the stamp card resets.
A spend-based system (which we recommend for vape and e-cigarette stores) rewards customers with points or stamps in accordance with how much they spend with the business. If a $10 spend equals 25 points, then perhaps 300 points earns customers a $10 discount.
By this math, the customer would need to spend $120 to get $10 back. This is roughly the kind of percentage back that the vape industry generally operates off.
A VIP membership takes a different approach altogether, where customers sign up to your loyalty program on a subscription basis in order to enjoy perks and benefits.
This could be anything from free shipping on vape products purchased from your online store, to first dibs on trying new flavoured products or even VIP access to exclusive industry events.
You could charge customers for membership, or you could offer a tiered system where loyalty status is determined by how much customers spend with your business.
Your next decision is which mechanism you will use for validating customers’ loyalty points and offering them rewards. Here are some common mechanisms for engaging customers with a vape rewards program.
For physical vape and e-cigarette stores selling directly to the customer over the counter, a merchant scan code is a straightforward way to go about validating loyalty points.
It involves the customer downloading your shop’s digital loyalty app, and signing up with their phone number or email address.
The merchant keeps a unique QR code print-out at point of sale, and customers scan it to accrue points for their purchases in real-time.
For example, our spin on this method is the Stamp Code. Vape and e-cigarette businesses can subscribe to our award-winning digital rewards platform for as little as $19 per month, and this provides them with a digital loyalty app to offer their customers, and a unique QR code for customers to scan in order to collect stamps.
Option 2: Stamp Mate™ (in-person transactions)
The Stamp Mate™ device is exclusive to Stamp Me Loyalty Solutions, and uses NFC and Bluetooth technology to award stamps. Merchants keep the device at POS, and customers place their phone on top of the device (with the loyalty app open) during the transaction to receive a stamp for their purchase.
The Stamp Mate™ and Stamp Code validation methods are both ideal for in-store transactions, as they are quick and convenient for both the merchant and the customer. The loyalty program only costs as much as the monthly plan that you choose (Lite, Pro or Elite), and there is no setup fee.
Perhaps you sell vape and e-cigarette products exclusively through Shopify, or run a Shopify store in conjunction with your physical shop. Either way, many loyalty solution providers offer digital loyalty programs that integrate with eCommerce stores.
Not only does an Shopify integration save vape shop businesses time and stress, but it ensures you don’t alienate your online customers from your in-store vape loyalty program.
This means that a customer can make a purchase from your brick-and-mortar vape shop one week, purchase something from your online shop the next week, and both purchases will accrue loyalty points and count towards their next reward.
This is a huge “plus” for creating a seamless omnichannel experience for the customer.
Option 4: Product Scan Code (online transactions)
While this validation method is ideal for customers shopping with your business online and having their vape products delivered to their house, it also works for in-person transactions.
The idea here is that you (the merchant) place a unique QR code sticker on or inside the packaging of each vape or e-cigarette product that gets sent out for delivery to online customers.
The customer receives the product in the mail, opens it, and scans the code with the digital loyalty app on their phone to receive a stamp for their purchase.
This is a remarkably efficient way to engage customers with a loyalty program without needing any software integrations with the online store, nor any physical interactions with the customer.
Option 5: Merchant Dashboard
This method, while possible, can be quite tedious and time-consuming. It’s best suited for small independent vape shops with slow enough foot traffic that the business’s staff can manually handle loyalty transactions themselves.
The customers sign up via the digital loyalty app and make purchases as normal, and the business owner updates each customer’s loyalty account in the online portal. This method could be considered more secure, as every single point or stamp awarded to a customer must go through the merchant him/herself.
Whichever option you choose; they all share one common advantage – a digital loyalty app.
When it comes to vape loyalty programs, a digital loyalty app offers countless benefits that help to create an enjoyable customer experience. These benefits simply can’t be achieved any other way.
To put it simply: when used properly, a digital loyalty app will become an invaluable asset to your vape or e-cigarette store.
How so? Well, for starters, the Stamp Me digital loyalty app provides vape shop owners with:
The means to retain customers and boost brand loyalty
An engaging loyalty program that can be operated over numerous locations and multiple channels simultaneously
A web-based dashboard to track performance, make adjustments, and attain customer data which can be used for targeted marketing
Gamified features like Birthday Club, Scratch & Win and others
The ability to send customers targeted communications directly to their mobile device via texts, emails and Push Notifications
Countless other valuable attributes that allow you to create a community of loyal customers around your vape and e-cigarette business
And to prove we’re not “blowing smoke” (excuse the pun), here are just a handful of ways you can immediately drum up some interest in your vape loyalty program from day one. You can find a more comprehensive guide on how to get customers to join your loyalty program here.
How to Entice Customers with your Newly Created Vape Loyalty Program
Ever heard of blu Cigs? Of course you have! Not only is blu Cigs a heavyweight in the industry, but when it comes to vape loyalty programs, bluNation is the crème de la crème.
As we mentioned earlier, a good loyalty program rewards much more than just repeat purchases.
This is why bluNation rewards customers with loyalty points for:
Joining the program
Social media views and shares
Various other limited-time promotions and campaigns
By rewarding customers for engaging with the brand on social media and other channels, blu Cigs can quickly and easily reach a wider market.
Here are some things you can do from day one to ensure your vape loyalty program motivates customers to shop exclusively with your business.
1. Offer an Upfront Incentive to Sign Up
It might seem counterintuitive (or even absurd!) to reward first-time customers for their business. However, loyalty marketers don’t see interactions with first-time customers as a standalone transaction… it’s an opportunity to invest in a lifetime customer.
As our Head of Marketing Michaela Ward puts it:
“Among our clients, Stamp Me has noticed that businesses which offer customers an upfront incentive to join their loyalty program build registrations three times faster than those which don’t.”
When customers use your shop’s digital loyalty app to receive points with every transaction, your business gains new data every time they make a purchase.
This data helps the rewards platform paint a picture of each loyalty program member, such as:
What the customer likes
What they don’t like
When they shop
How often they shop
Whether they opt for pick-up or delivery
Whether they are more tempted by upgrades or free shipping, and so on
With this information, decent platforms (like Stamp Me’s) can automatically send targeted communications to customers based on their unique and individual preferences.
The customer who likes to try new flavours will be offered discounts on new releases, while the customer who shops with you online will be offered free shipping when they upgrade their basket-size, for example.
3. Gamify Your Vape Loyalty Program
To gamify a process is to take an ordinary task – a driving test, exercising or even employee training – and make it fun by adding gaming components to it.
It goes without saying that this is an incredibly useful function to apply to loyalty programs. Perhaps that’s why marketing masters like Starbucks and McDonald’s have been doing it for years!
Speak to us about our vape and e-cigarette store loyalty program solutions today.
At Stamp Me Loyalty Solutions, we provide custom rewards platforms and loyalty program solutions to businesses in various industries. To discuss how we can help you leverage your e-cigarette business with an effective and highly engaging vape loyalty program, drop us a line and a friendly member of our team will be happy to assist.