KPI #7: New Customer Loyalty Opt-In Rate

Your dispensary's Customer Loyalty Opt-In Rate is a crucial metric indicating how effectively you convert customers into loyalty program members. This key performance indicator directly correlates with customer lifetime value and repeat purchase rates, helping build a more engaged and loyal customer base.

What is Customer Loyalty Opt-In Rate?

Customer Loyalty Opt-In Rate measures the percentage of customers who join your loyalty program compared to total customer transactions.

For example, if your dispensary has 1,000 total customers and 400 are loyalty members, your Loyalty Opt-In Rate is 40% (400/1,000 = 40%).

Based on our proprietary BNCHMRK dataset, here's how we categorize dispensary Loyalty Opt-In Rate performance:

• Great: Opt-In Rate ≥ 40%
• Average: Opt-In Rate between 20% and 40%
• Needs Improvement: Opt-In Rate < 20%

Author Note: this target will evolve over time as our dataset grows. Individual Opt-In Rates are highly dependent on market maturity, local competition, program structure, and staff training effectiveness.

Dispensary Industry Benchmarks

Our latest data from October 2024 shows significant variations in New Customer Loyalty Opt-In Rates across dispensaries in our dataset. We currently have data from dispensaries in 9 U.S. markets; below is the performance distribution by percentage:

Dispensary Performance Distribution

• Dispensaries Scoring 'Great': 25% of dispensaries scored in this range with an average opt-in rate of 53.18%
• Dispensaries Scoring 'Average': 25% of dispensaries scored in this range with an average opt-in rate of 31.05%
• Dispensaries Scoring 'Needs Improvement': 50% of dispensaries scored in this range with an average opt-in rate of 5.2%

How to Calculate Your Loyalty Opt-In Rate

To accurately calculate your dispensary's Loyalty Opt-In Rate, follow these steps:

#1. Calculate Total Customer Base

• Include all unique customers who made purchases
• Count both in-store and online transactions
• Exclude duplicate entries from the same customer

#2. Sum Loyalty Program Members

• Count active loyalty program members
• Include new sign-ups within the period
• Remove churned or inactive members

#3. Formula

Loyalty Opt-In Rate = (Total Loyalty Members / Total Unique Customers) × 100

Factors Affecting Loyalty Opt-In Rate

Several key factors influence your dispensary's ability to convert customers into loyalty members:

Program Structure

• Sign-up incentives
• Point earning rates
• Redemption options
• Tier benefits
• Member exclusives

Staff Performance

• Program knowledge
• Sign-up process familiarity
• Communication effectiveness
• Enrollment incentives
• Training completeness

Customer Experience

• Sign-up convenience
• Program transparency
• Value perception
• Benefit clarity
• Technical reliability

Market Variables

• Local competition
• Program differentiation
• Customer demographics
• Market maturity
• Regional preferences

How to Improve Your Loyalty Opt-In Rate

Based on our experience working with dispensaries across multiple markets, we see several key areas that drive improvements in Loyalty Opt-In Rate performance:

Program Enhancement

Sign-up Process

• Streamline enrollment steps
• Offer multiple sign-up channels
• Minimize required information
• Enable digital enrollment
• Provide instant benefits

Value Proposition

• Clear benefit communication
• Compelling welcome offers
• Transparent earning structure
• Achievable rewards
• Regular program updates

Staff Development

Training Programs

• Comprehensive onboarding
• Regular refresher sessions
• Performance monitoring
• Success recognition
• Best practice sharing

Incentive Systems

• Enrollment goals
• Performance rewards
• Team competitions
• Recognition programs
• Success celebrations

Customer Communication

Marketing Integration

• Multi-channel promotion
• Benefit highlighting
• Success stories
• Member testimonials
• Program updates

Educational Content

• Program guides
• Benefit explanations
• FAQ resources
• Tips and tricks
• Member spotlights

• Implementation Framework

Successful Loyalty Opt-In Rate improvement requires a systematic approach:

Assessment Phase

• Current performance review
• Competitor analysis
• Staff feedback collection
• Customer input gathering
• Process documentation

Strategy Development

• Goal setting
• Resource allocation
• Timeline creation
• KPI definition
• Success metrics

Execution Management

• Performance tracking
• Staff engagement
• Customer feedback
• Program adjustments
• Success celebration

Related Metrics to Track

To get a complete picture of loyalty program performance, monitor these related KPIs:

• Overall Loyalty Opt-In Rate
• Customer Return Rate
• Average Order Value by Loyalty Status
• Points Redemption Rate
• Member Retention Rate

Tools & Resources

• BNCHMRK Monthly Reports: Access the latest insights on dispensary performance.
• Marketing Performance Scorecard: Get your free BNCHMRK scorecard to assess your marketing efficiency.
• Consultation with Growth Experts: Schedule a free consultation with one of our cannabis growth experts for personalized advice.

Takeaways

To improve your Loyalty Opt-In Rate, focus on simplifying the sign-up process, clearly communicating the program's value, and effectively training staff to engage with customers about loyalty benefits. A well-executed loyalty program drives repeat purchases and builds a loyal customer community that contributes to long-term profitability.

Last Updated: November 10, 2024. Data sourced from BNCHMRK's proprietary database of dispensary performance metrics.

Frequently Asked Questions

What is a good Loyalty Opt-In Rate for a dispensary?

A good rate is 40% or higher, meaning 40+ out of every 100 new customers join your loyalty program. Top-performing dispensaries achieve 50-55% rates, while the dataset average is 23.69%.

How do you calculate the Loyalty Opt-In Rate for a dispensary?

Calculate by dividing total loyalty members by total unique customers and multiplying by 100. For example, if you have 500 loyalty members out of 1,000 total customers, your Opt-In Rate is 50% (500/1,000 × 100 = 50%).

Which customers should I include in Opt-In Rate calculations?

Include all unique customers who have made purchases, both in-store and online. Count each customer only once, even if they've made multiple purchases.

How often should I calculate my dispensary's Loyalty Opt-In Rate?

Track monthly to identify trends and adjust strategies. Quarterly and annual rates should also be calculated to account for seasonal variations and long-term program performance.