New customers are essential for growing your business — but repeat customers bring you long-term success.
It’s a bit of a waste if you spend all your time and effort bringing new customers into the store, only for them to make one purchase and never return. Not only are repeat customers great for building trust and referrals, they’re also great for your bottom line.
Looking for some ways to keep shoppers coming back for more? A tobacco store customer loyalty program is the perfect place to start.
In this post, we’ll take a deep dive into the reasons you should start a tobacco loyalty program, the types of loyalty programs, and the tips and tools you need to start your own.
Let’s jump in.
Loyalty programs are popular in big chains and small retailers for a reason — because they work. 84% of customers say they’re more willing to stick with a brand that offers a loyalty program, and repeat customers account for over half of small business revenue.
In other words, if you’re not investing in ways to bring customers back, then you might be missing out on steady sales and profits.
A customer loyalty program is useful for boosting sales — but it’s also a great marketing tool. Not only will you have contact information to stay in touch with customers, you can segment customer data based on buying habits to send tailored offers and discounts (offering a timed discount on vape refills for customers who’ve bought them before, for example).
Finally, loyal customers are an excellent way to garner customer reviews, which are vital for showing up on local search and building trust with new customers.
While there may be concerns regarding setup costs, complexity, and the potential for customers to "game" the system, you can mitigate these challenges by using a robust point of sale (POS) system to track and manage your loyalty program (we’ll go into more detail on how below).
You have several options for loyalty programs you can implement in your tobacco shop. Let’s take a look at the most common types of programs (and when they’re used).
In a point-based loyalty program, customers earn points for each purchase they make at your tobacco shop. With each transaction, they gain points they can redeem later for specific rewards or benefits.
This system incentivizes customers to continue shopping with you to earn more points and enjoy the rewards. By offering tangible and attainable incentives, such as discounts (e.g. 10% off for every $100 spent), free merchandise (e.g. free lighters on purchases over $75), or other enticing perks (e.g. exclusive holiday discounts, access to lounge spaces), you can motivate customers to stay loyal and engaged with your store.
A tiered loyalty program rewards customers based on their spending levels or the number of visits they make to your tobacco shop. As customers spend more money or reach higher thresholds of visits, they progress through different tiers or levels within the program.
Each tier offers increasingly attractive rewards or benefits, incentivizing customers to continue engaging with your store. This tiered approach acknowledges and rewards the loyalty of your most valuable customers, encouraging them to reach higher tiers and enjoy greater perks along the way.
A VIP loyalty program is designed to cater to your most dedicated and loyal customers. By joining your VIP program, customers can access exclusive discounts, promotions, or special offers that regular customers cannot access.
This program creates a sense of exclusivity and appreciation among your VIP members, making them feel like valued insiders. Plus, a VIP loyalty program fosters a community of loyal customers who share a common interest in your tobacco shop, creating a sense of belonging and making them feel a kinship with your brand.
This makes VIP programs a particularly good fit for cigar lounges, hookah bars, and other stores that have a more communal feel.
Want to offer a loyalty program, but aren’t sure where to start? We’re here to help.
Here are five tips and tools to ensure you get the most out of your tobacco store’s loyalty program.
If you want to design a successful loyalty program for your store, you need to understand your customers. Take the time to research and analyze who your most dedicated customers are and what motivates them to choose your store over your competitors.
Dive into demographics (like age, gender, and location) and psychographics (like preferences, interests, and buying behaviors). This will help you figure out a program type that appeals to your unique customers.
For example, a cigar shop that focuses on selling premium, hand-rolled cigars might want to implement a VIP program for exclusive access to new releases and in-store events. A vape shop with smaller and more frequent purchases might find a point-based program is a better fit.
You should also stay informed about the overall market trends in the tobacco industry. This general market data gives you insights into the specific customer segments you should target and the types of rewards that will entice them to join your loyalty program.
If it’s not clear already, we think loyalty programs are a great idea — however, tracking them by hand is a recipe for disaster. Not only is it tedious and error-prone, you also won’t be able to track loyalty accounts as you expand to new locations or online sales.
Instead, use a POS system with integrated customer loyalty. This allows you to customize and manage your loyalty program from the same system you use to track inventory and make sales. Not only does this simplify the process of signing customers up and applying points, it ensures that customer data is shared across every store location and sales channel.
Last, an integrated program also lets you correlate customer and sales data for more in-depth insights into the buying habits of your best customers, helping you with promotional strategy and merchandise planning.
Before you launch your program, you need to establish clear goals and set a budget for your program. Ask yourself what “success” means for your program. Are you looking to increase customer retention, drive bigger average transaction values, or expand your customer base?
Regardless of the goals you choose, setting specific, measurable objectives helps you understand if it’s working as expected and find areas for improvement. By regularly checking in with the sales reports on your POS system, you can see which incentives and rewards customers are most drawn to.
Finally, rewards programs should be healthy incentives for customers to buy from you, but they shouldn’t be eating into your bottom line. Carefully look at the transaction sizes and profit margins of loyalty sales versus regular sales to make sure your program is providing the return on investment (ROI) you expect.
Related Read: A Quick Guide to Tobacco Store Analytics: 7 Metrics To Track
Of course, you won’t see any lift from your customer loyalty program if your loyal customers don’t know it exists. Employ a variety of promotional tactics to spread the word.
Start with eye-catching in-store signage that highlights the benefits of your loyalty program and encourages customers to sign up. And don't forget to mention your loyalty program on customer receipts!
Also, get your staff in the habit of asking whether a customer is a member of your rewards program during checkout. This helps spread awareness and gives you a chance to sign up a customer right at the point of sale.
You can use social media to promote the program, too. Consider making posts about your program and the exclusive rewards members can enjoy. Just make sure you follow national tobacco advertising rules along with any platform-specific rules.
As we mentioned before, an effective loyalty program is much more than a sales tool. Used correctly, the information from your loyalty program gives you a valuable look at your best customers’ shopping habits and preferences, which you can use to boost the effectiveness of your tobacco store marketing.
Use the reports on your POS system to look at the purchase history of your loyalty program members to spot trends like:
You can also look to see if there are segments within your loyalty membership (e.g. customers who regularly buy cigarettes, cigar lovers, vape users), and then send out specific discount codes or product announcements to those segments.
Research repeatedly shows that tailored offers are much more effective than one-size-fits-all promotions. A whopping 91% of customers say they’re more likely to shop with businesses that provide offers that are relevant to them.
Following the steps listed above should give you everything you need to start your new customer loyalty program.
If you want to get the most out of your program (without tearing your hair out from manual tracking and management stress), you want to implement a point of sale solution with built-in customer loyalty features.
Cigars POS is one of the only systems on the market that is exclusively tailored to tobacco sales. With customizable customer loyalty, pre-built reports, and simplified inventory tracking, Cigars POS comes with the features tobacco store owners need to keep customers coming back for more.
Request a demo of Cigars POS today to see if our solution is right for your store!