Cultivating Loyalty from Dispensary Shoppers with Jeff Harris

Jeff Harris Springbig

How can dispensary owners delight customers to make them repeat customers?
Jeff Harris of SpringBig shares how smart dispensaries are crafting offers via text message to drive business.

Key Takeaways:
[0:57] – What is Spring Big
[1:21] – How did Spring Big come about
[3:00] – Jeff talks about the tools Spring Big offers
[4:23] – Biggest benefit of Spring Big
[5:45] – What are triggers
[7:49] – Jeff talks about the most effective campaigns
[9:53] – How often should you send out an SMS
[11:46] – How do dispensaries measure customer loyalty
[13:14] – Jeff talks about Spring Big analytics
[14:28] – How does Spring Big differ from its competitors
[15:49] – Jeff talks about Spring Big’s pricing structure
[16:45] – Spring Big’s fundraising efforts
[17:29] – Jeff answers some personal development questions
[21:23] – Contact details for Spring Big

Learn more at:
https://www.springbig.com/

Important:
What are the five trends disrupting the cannabis industry?
Find out with your free report at https://www.cannainsider.com/trends

Read Full Transcript

Dispensaries are feeling the competitive pinch and are looking for ways to forge a closer relationship with customers so their eyes don’t wander to competitors. Here to tell us how dispensaries are leveraging technology is Jeff Harris from Spring Big. Jeff, welcome to CannaInsider.

Jeff: Thank you. I’m excited to be here.

Matthew: Give us a sense of geography. Tell us where you are in the world today.

Jeff: I am actually here in rainy Boca Raton, Florida today. So, that’s where our headquarters is located, and I just got back from an end of year break and excited to get started in ’18.

Matthew: Great. What is Spring Big at a high level?

Jeff: Spring Big, we created a loyalty and digital communications platform for cannabis retailers to be able to create and manage their own loyalty programs, as well as to leverage the database that they can build through that program to communicate with customers in a very easy but effective manner.

Matthew: What sparked the idea to start Spring Big? What were you doing before and what led up to it?

Jeff: So, I actually had started a loyalty marketing company by the name of (1.26 unclear), which services large retail chains in the non-cannabis space for loyalty and data driven marketing programs. A couple of years ago we had the idea of creating a platform for smaller businesses to leverage a lot of the technology that we created in (1.44 unclear) and from there we created Spring Big. About a year ago we pivoted into the cannabis space because we saw a big need for our services and our product, as well as a big opportunity in the space.

Matthew: It’s a pretty rich, entrepreneurial environment there in Boca Raton I’d say. I mean, I hear a lot about investors and different businesses being started there. Can you tell us what it’s like there?

Jeff: Yeah, so I think it’s been moving along on that path for a couple of years. I think there’s an excitement around tech startups here. I think it started more in Miami and Ft. Lauderdale, and it’s moving a little bit north to Boca Raton, Florida. There’s another big cannabis technology company in the area, Bio Track THC. It’s located in Ft. Lauderdale as well. And with Florida legalizing medical marijuana about a year ago, I think you’re going to see more and more companies, in this space in particular, both obviously in the growing and retail side but also on the technology side, being here to not only support Florida but support all of the retailers across the country.

Matthew: Well, let’s dig in a little here. Let’s say a dispensary owner decides to integrate Spring Big into their dispensary. What tools do they have in their tool belt now that they’ve integrated it.

Jeff: So, there’s two different ways that they could integrate it. Depending on the point of sale system that you’re using, we can actually allow them to leverage Spring Big right through their point of sale. We’re already integrated with Green Bits and with MJ Freeway and we’re shortly going to be integrated with Flow Hub and Cova and we’re hoping to integrate with Bio Track as well. So, therefore if they’re integrated, they can actually leverage their POS to transfer data into the Spring Big platform, and then they have access to the Spring Big dashboard to do all the things that they would need to do to help them manage their loyalty program, as well as to communicate with their customers through SMS. We offer email as well, but the primary communications tool is SMS.

If they don’t want to leverage the POS integrated solution, we actually have the ability for them to leverage a tablet solution. So, they can either use their tablets or our tablets. Either the customer or the bud tender can enter in the information that is necessary to keep track of the customer’s performance or purchases in the program. And then from there, it works the exact same way. The platform does all the calculations. It keeps track of points. It builds their database and obviously allows them to leverage the dashboard on our platform to communicate with customers.

Matthew: What are the dispensary owners telling you is the biggest benefit?

Jeff: I think, two things. One, let’s focus on the integrative solution first. They love the integrate solution, and we’re actually the only company in the industry that provides that kind of integration that allows us to pull transaction information from the point of sale. So, the biggest benefit I think that they’re seeing is obviously the less clutter on the counter the better. So, they prefer not to have an extra device an extra tablet on the counter. So, using our integrated solution, they can eliminate the need for an extra tablet, which is huge because then they just have their POS system there but they don’t need a second tablet. Again, as I mentioned, we’re the only company in the industry that offers that solution to them, but if they don’t have an integrated solution, having the tablet works just as well. It just provides a little bit more clutter on the counter.
In terms of the biggest benefit, I think our communications platform is probably where are dispensaries are telling us they’re getting the biggest benefit. We have a very easy to use but robust communications platform that really does help them drive business into the store. It really allows them to stay in touch with their customers, allows them to communicate with them whenever they want. It allows them to segment those customers in different ways. So therefore it’s a major benefit for them to be able to very easily but effectively communicate with customers.

Matthew: Okay, tell us about how they can communicate. Can you tell us a little bit about what triggers are and what’s important to know there?

Jeff: Sure. So, triggers are behavior based communications that are triggered when that behavior happens. For example, let’s leverage win back or inactivity. So, a customer has come into the store, but yet they haven’t seen that customer again in a matter of time. Let’s assume it’s two weeks, four weeks, six weeks. They have the ability to create a behavior based trigger that says if I haven’t seen Jeff Harris in X amount of days, send them this message. If I haven’t seen Jeff Harris in Y amount of days, send him this message. Those messages are created one time and then it automatically triggers that communication when the number of days have elapsed where they haven’t seen that customer. So, it’s not like they have to go into the system and do this time and time again. They can go into the system, create it once and then it will run as long as they want it to run until they stop it.

Matthew: Does it get granular? For example, let’s say I know Jeff Harris wants to buy or he typically buys an eighth of an ounce of Blue Dream. Could I say, hey offer a pre-roll if you buy an eighth in the next 48 hours or something like that? Can you get to that level of granularity?

Jeff: You can get to that level, yes you can. You can do that, but in order for us to really know that Jeff Harris bought that eighth, we need to be integrated with the point of sale system, and once we’re integrated with the point of sale system, not only are we pulling in how much the customer spent, but we’re also pulling in what they bought. As long as we have the ability to know what they spent, how much they spent and what they purchased, yes you have the ability to be able to get very granular in your communication.

I think you’re going to see a lot more of an opportunity in that are probably within the next 6 to 12 months as the integrations that we have with POS get a little bit more sophisticated and we have the ability to pull in that information. It’s coming.

Matthew: What are the most effective campaigns in terms of ROI, I mean, anecdotally what do hear dispensary owners saying? Is it the SMS or email triggers? What is it?

Jeff: SMS for sure. Just some general statistics, the open rate for an email on average is somewhere between 15 to 25 percent. So, if you send out 100 emails, 15-25 people are going to open it and then of that, a certain percentage, probably about 10 percent are going to act on it, as compared to SMS where the open rate is about 99 percent. The actual acting on that SMS is probably about 10 times higher in scale than in email. So, there’s no doubt that SMS is a much more effective communication tool. Also it’s faster.

An email normally gets opened up on average within about a two day period of time. An SMS gets opened up on average within four minutes. So, therefore, a lot of our dispensaries use this to drive business that day. So, if they see that they want to drive additional traffic that afternoon, if they send a text message out 11, 12, 1 o’clock in the afternoon, they’ll see actual business coming in from that text message that day. As compared to email where it’s going to be… you have to be thinking about it a lot more in advance because it probably takes a few days for them to open it and until they act on it. So, SMS is for sure provides much higher ROI than email at this point.

Matthew: And then the SMS message you can opt out of each one that goes out so customers don’t get frustrated or anything if they don’t want to receive them?

Jeff: Yeah, absolutely. So, they can definitely opt out if they don’t want to see them. The opt out rates are much lower in this industry than in other industries and I think primarily that’s because they do want to know. Normally when dispensaries sending out or a retailer sending out an SMS message there’s a deal attached to that message, and customers want to know about those deals. So, we actually see a very low opt out rate. Lower than in other industries because of that phenomena.

Matthew: Every day is too much, but is there a sweet spot in terms of how often would be a good rule of thumb in terms of sending SMS out there so you get a good amount of engagement but you’re not frustrating customers with a deluge of too many text messages?

Jeff: Yeah, I think that’s a fair point. I think probably about three times a week is probably a good sweet spot for dispensaries. You do have some dispensaries that are sending out, they have daily deals. If you think about a restaurant or a lunch spot that sends out their daily specials, you actually have some dispensaries that use our daily deals trigger in a similar way where they have a deal that goes out. They don’t necessarily use it for every day of the week, but there are certain days of the week that they automatically set up a daily deal. I would say probably three to four times a week is enough to get, to catch people when you want to catch them, but on the other hand it’s not over bearing in terms of too many text messages.

Matthew: That makes sense. Can you add a picture in an SMS message to show what you’re trying to promote or not yet?

Jeff: No, so actually there’s a couple of ways. We actually are adding on MMS in the next month or two. But in the meantime yes you can definitely send a picture because what you can do is you can attach a link to your message, so therefore the message could have an embedded link and you can just click on that link and then anything that you want to display through that link you can. So, retailers have the ability to send pictures and send YouTube videos, direct them to websites. Any place they want to go they can do that through what they call a mini url or it’s a smaller version of a link that allows you to send it within an SMS message that allows people to take advantage of all those opportunities.

Matthew: That’s good to know. Now this begs a broader question. How does a dispensary owner know if they have loyal customers? They might say well that marketing campaign was great or this one wasn’t so great, but how do they actually know that they have an engaged customer that has a loyalty to that particular dispensary?

Jeff: Yeah, that’s good questions. So, I think from a data driven standpoint the way you’re going to know is by creating a test and control group. So, therefore anecdotally now they kind of have an idea because they can see when they send out messages what the responses versus days that they don’t send out messages. So, there’s a lot of anecdotal evidence, but if you really want hard evidence, the only way to do that is to create a test and control group. Let’s assume you have 2,000 customers in your database. They may send out 1,800 customers the message, but they may hold 200 back. And then they can actually measure the performance of the 1,800 versus the 200. Then they can actually see in very specific terms what the life was by sending out that message and by having them in the loyalty program.

From a loyalty program standpoint, because it’s a self-select process, meaning Jeff Harris walks into the store and I select to join that loyalty program, you can definitely see the difference between loyalty members and non-loyalty members, but the most effective way to do it is with the ongoing communications that they send out to have a test and control group that they can actually measure their performance differences.

Matthew: Looking at Spring Big analytics, what’s the biggest insight your clients get? Particularly when they first are up and running. Is there an aha moment or anything where that you hear the most from them saying, hey this is really helpful?

Jeff: Yeah, you know, in broad terms I think the biggest Aha they get is wow this really really works. I think people kind of believe that if I message my customers it’s going to work, but you really don’t believe it until you see it. When they start building their database and start sending out messages that makes sense for the customer, again that’s a big deal. You need to be thinking about the type of message that you’re sending and what call to action that you’re asking the customer to act upon. As long as they’re being smart about how those messages go out, they see an immediate lift of traffic and immediate lift in sales. We have a retailer in Nevada that tested it out and he tested it on one particular product and he literally sold out of that product in two days. He thought he had a lot more inventory than he needed for two days. He actually felt that wow this thing really drove business, brought people into the store and they bought the product that he was promoting in the message. I think the biggest aha I think they get is wow this thing really really works and they definitely have an engaged customer base that takes advantage of these offers.

Matthew: There’s some other tools out there like Baker which just raised a lot of money. How would you say you differ from a tool like Baker or overlap?

Jeff: I think that’s a fair question. I think Baker does two main things. They have a loyalty and digital communications package and they have an ecommerce platform. I think from our understanding a big focus of Baker’s on their ecommerce platform more so than their loyalty and communications platform. So, they’re providing a wider set of services, but I think by providing a wider set of services they’re not going as deep as they can on the loyalty communication side.

Spring Big on the other hand only provides loyalty and digital communication and we partner with ecommerce companies to provide the ecommerce support when needed. We’re also partnering with POS companies. So, I feel like there is definitely some overlap with Baker. I think probably the big differences are the depth of our product offering as compared to Baker’s are the loyalty communications. And the second is our experience in loyalty. As I mentioned before, I’ve spent 20 years in the loyalty business, so therefore our understanding of loyalty and how it works and how to design the right kind of program to drive the right results are probably unparallel to this industry at this point in time.

Matthew: How does pricing work for clients? What can they expect to pay? A lot of people in this industry have a fixed budget for marketing and software and they kind of want to have a predicable expense. So, what can you tell us about pricing?

Jeff: Our approach to pricing is a bit different. We actually do not charge a monthly platform fee. We give them the ability to leverage the software at no charge, and then we charge them for the messages that they send out. So therefore, depending on the number of messages they send out in a month, that’s what they pay. So therefore, for retailers that are on a fixed budget, they know how many messages they need to send out each month to hit that budget. We can help them do that. For those retailers that are not necessarily focused on okay I have $500 a month to spend for this activity, but they want to leverage it to drive the ROI that they’re looking for, they have a little bit more freedom to send out more messages or send out messages more frequently. Our pricing approach is a bit different. We only charge for the messages that go out. We don’t charge for the software.

Matthew: That’s cool. Where are you in the fundraising process? I know you’ve been out there raising some funds. Can you tell us a little bit about that?

Jeff: Yeah, we just closed our $3.2 million round a couple week ago. So, that round was fully funded around the middle of December so we’re in a good position financially from a capital standpoint to do the things that we need to do this year to continue to move business forward and compete effectively in the marketplace.

Matthew: Are you still looking for investors, or is that chapter closed for now?

Jeff: That chapter’s closed for now.

Matthew: Okay. Let’s pivot to some personal development questions to help listeners get a sense of who you are personally, Jeff. Is there a book that has had a big impact on your life or way of thinking that you’d like to share with listeners?

Jeff: You know, there isn’t a particular book. I do a lot of reading just in terms of general business. So, I spend a lot of time trying to understand what’s happening in the marketplace, in the overall business marketplace. So, spending time with Business Week and Forbes and Fortune, as well as a particular industry publications within the cannabis space probably have more effect on me than a particular book. I’ve been doing this now for about 30 years. Actually my dad was my… I used to work for him when I just got out of college, and I learned a lot of how I behave from a business standpoint by observing him and watching him and working with him. I feel that I continue to try to develop my skills. We always got to continue to develop our skills, but I try to do that by understanding what’s happening in the business marketplace overall and how does that affect me and how do I take advantage of what I’m understanding and what I’m learning.

Matthew: Is there a tool, web-based or otherwise, besides Spring Big that you feel has a great impact on your day-to-day productivity?

Jeff: Yeah, actually it’s a tool that I started using a little while ago. It’s called Mix Max. It’s a tool that connects with Gmail that really allows me… it’s not an email tool, but it really is a tool that allows me to manage my activities and my schedule so I get the most out of every day. I’m a big believer in working hard but working smart. So, it allows me to work a lot smarter, and ever since I used it it’s making a big difference in just how I manage my schedule and how I’m being able to be a lot more productive every day.

Matthew: One other question. Every day I have lots of people email me but I’ve noticed there’s a ton of people in the Millennial category that are really anxious to get into the industry, and they say how do I get in, how do I get in. I always say proactively help a prospective employer get more customers or reduce some expense is always a great way. Is there any helpful hints you would have for people particularly in that age demographic that want to get in but perhaps don’t have a lot of experience that might be helpful to them?

Jeff: Yeah sure, I think there are probably three main areas. I think obviously on the sales front there’s just so many new entrants into this marketplace. There’s so many opportunities for aggressive, smart, young people who want to go out there and help companies build their business. From a sales perspective to get in, I think that’s probably what I’ll call the straightest shot to get into this industry. For example, we’re looking to hire probably six or seven salespeople across different parts of the country right now, whether it be on the West Coast in Southern California or in the Mid Atlantic region. From a sales perspective, that’s a great way to do it.

The other two ways I think from an engineering, from a computer programming standpoint there’s such a high need for computer programmers and so many of those computer programmers are millennial in nature just because of the skills that they have. There’s so much opportunity there, as well as in the analytics front too. There’s a lot of people coming out of school with analytics backgrounds and analytics training, and there’s going to be such a huge need for analytics in this marketplace. So, I think millennials that either have skills in analytics or programming or people that are just smart go getters that are interested in taking advantage and getting into the marketplace, I think sales would be a great opportunity.

Matthew: Thanks for that, Jeff. I just want to let everybody know that isn’t just for millennials. It’s just I’ve gotten a lot of inquiries recently about that. So, I just wanted to make it specific for them, but it is also general. Well, Jeff as we close, how can listeners learn more about Spring Big and also for potential clients or dispensary owners, how can they learn more?

Jeff: Obviously they can go to our website www.springbig.com. They can learn a lot about us there, but obviously when they go to the website we would love to hear from people. We get inquiries on the web all the time and we’re a very high service, high touch organization. We want to connect and help dispensary owners and retailers leverage our toolset to make them better at what they’re doing on the retail side. So, obviously we’d love to hear from them and talk with them and see if what we’re doing here can help them.

Matthew: Well, Jeff Happy New Year to you. I wish you all the best in 2018 and keep us updated on how things go.

Jeff: Thanks Matt, really appreciate and thank you and have a great 2018 as well.