How to Build a Loyalty Program in the eCig and Vapes Industry

November 22, 2016 Alex McEachern

The eCig and vapes industry is exploding.  29% of people who quit smoking try e-cigarettes within the first six months, and this high conversion rate has resulted in a multi-billion dollar industry.  Since 2008, the eCig and vapes industry has grown by almost 144%, with sales over $2,875,000,000 in a single year.


These figures are severely impacted by the high repeat purchasability of eCig cartridges and refills.  Just like food and beverage products, customers are purchasing eCig and vape accessories semi-regularly, causing a customer’s lifetime value to grow.  These stats have led to intense industry competition.  So how can you set a brand in the eCig and vapes industry apart? Simple: customer loyalty.

eCig and Vapes Industry title

Repeat purchase rate is a huge consideration in the eCig and vapes industry.  Once someone decides to switch to electronic smoking, they’re going to need to begin purchasing the refills and accessories that go with it semi-frequently.  This potential for repeat purchase makes it extremely important to grab customers’ attention and keep it from your competitors.

eCig and Vapes Industry overview

(Find out how to increase your repeat purchase rate with a loyalty program HERE!)

Thankfully, there are a couple of factors working in your favour.  For one, this industry is all about variety.  Customers are always looking to try different flavours or nicotine levels, giving merchants the opportunity to expand their product lines in an effort to rope in a larger customer demographic.  Additionally, most eCig and vape companies are manufacturing their own branded refills, giving them flexibility to experiment with new products to meet customers’ changing tastes.

eCig and Vapes Industry competition

These switching costs are extremely important in an industry with such high competition.  Forbes estimates that eCigs will overtake traditional cigarette sales as soon as 2047, which means the level of competition is only going to continue climbing.  By combining higher profit margins, wide product offerings, and customer loyalty, you can build a customer community that creates lasting relationships and keeps customers coming back.

eCig and Vapes Industry strategy

(Increase profit, build community and more with a loyalty program designed with our FREE guide!)

As we mentioned earlier, repeat purchases are a critical measurement of success in the eCig and vapes industry.  One of the best ways to encourage these repeat purchases is with account registrations.  If a customer has made an account with your store, they are less likely to want to go through the same process with another brand.  Rewarding customers for completing this action makes this process valuable for both parties: they earn rewards and save time on future purchases, and you continue to build a strong loyalty community!

eCig and Vapes Industry rewarding reviews

(Discover how to acquire, retain, and nurture your best customers in the full guide!)

Customer referrals and reviews are two other great ways to strengthen your loyalty program.  With so many options on the market, it can be hard for customers to know where to start when they decide to begin purchasing a new product.  By rewarding your customers for recommending your brand, you’re able to encourage future business that will help increase annual revenue and spread awareness of your brand.

Similarly, reviews are another great action to reward your customers for.  After all, not every new customer is going to have friends that can vouch for your products.  Reviews will help encourage new customers to buy, and will also start to build a community around social sharing that expands your loyalty program beyond simple rewards.  Reward points are an excellent way to encourage this behaviour and continue the exchange of value your program has already created.  

eCig and Vapes Industry highly valuable

(Learn about how account registrations and reviews can work together to create profitable growth)

But why stop there?  In today’s competitive markets, if you want to catch shoppers’ attention you need to really wow them.  This could take any number of forms, but one of the simplest would be a significant transactional discount.  A typical loyalty program only rewards customers with 1% to 5% back in points, but with very healthy margins you could easily afford to reward anywhere from 5% to 10%.  This type of reward does not go unnoticed by customers, and will most definitely help you set yourself apart from the competition.

eCig and Vapes Industry transactional rewards

(Find out more about the impact of smart discounts in the Loyalty Programs for the eCigs and Vapes Industry guide)

With high transactional rewards on the table, it’s not hard to show people the value of a loyalty program.  This value is magnified when you make it easy for them to earn and redeem those rewards, and let’s be honest – making an account, referring a friend, or leaving a review isn’t hard!  Each of these actions are completed by customers every day with or without a loyalty program, so combining them with additional value makes it a no-brainer to participate in your rewards strategy.

The icing on the cake are discount rewards that make purchasing with your brand cost-effective and beneficial.  These factors all come together to create a loyalty experience that outshines the competition, pushing your brand up in the ranks and causing your competitors to go up in smoke.

eCig and Vapes Industry summary

So what does it take to build the best loyalty program in the eCigs and vapes industry?

1. Develop a program strategy which places excellent value and customer service at the core of your program.

 

2. Reward your customers for creating an account and referring their friends to make repeat purchases an easy and desirable option.

 

3. Provide multiple ways to earn rewards, focusing not only on dollars spent but on the complete experience.

 

4. Offer rewards that significantly benefit your customers’ wallets, using your healthy margins to create clear value for shoppers with every transaction.

 

If your loyalty program follows these recommendations, it’s sure to delight and excite new and existing customers alike.  So what are you waiting for?  Start building a world-class loyalty program today, and start reaping the benefits of customer retention!

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