When co-founder and CEO Jeffrey Harris told investors that SpringBig would be shifting their B2B business from small retailers in general to a new vertical—the cannabis industry—he got very mixed reactions. A CRM software designed specifically for cannabis dispensaries when marijuana isn’t even federally legal? It was a bold move, which is why many investors opted to be bought out. The ones that stuck around, however, soon saw that SpringBig had sprung into a relatively new industry at just the right time.
SpringBig provides support to retailers in a market that sorely lacked a service like theirs, and their hard work has paid dividends for their own business, their customers, and their customer’s customers. “Success builds on success,” says Harris, and he talks about the steps they took to establish themselves as key players in cannabis tech, first by studying the market to help retailers optimize customer messaging and then fostering customer loyalty via advanced and proven metrics. You can listen to his entire interview here.
How did you go about marketing SpringBig in a budding industry?
We have about 800 customers on our platform right now, and there are probably about 3,000 potential prospects to call. That’s what’s unique about this industry: every day, there’s a new prospect to call. In other industries that I’ve participated in, you go to a conference and you see the marketing managers or the marketing directors, but in cannabis, the owners are there. All of them. That’s where we wanted to spend the most dollars and the most time from a marketing standpoint. PR and conferences are huge in this industry, so we tried to get as many speaking engagements as we could. It was a little difficult at the beginning because we were not that well-known. We were trying to do everything that we could to get the exposure that we needed so people would actually come to our booth and talk to us, and it’s definitely worked. I don’t think it’s anything unique that we did other than doing the best we could to let people know who we were. In this environment, competitive retailers talk to each other all the time, so we wanted to leverage them to say, “SpringBig’s doing great for us, you could use them for you.” It’s very much a community.
So, what exactly does SpringBig’s platform offer?
First, it provides cannabis retailers with the software support to design and manage their customer loyalty program with a high level of sophistication. Second, it helps them build their customer database through that loyalty program and leverage the database to communicate with customers about anything relating to deals, specials, information, announcements. We primarily use SMS or text rather than email because cannabis is not federally legal yet. Some of the other tools that non-cannabis industries would use, like Facebook and Instagram, are not available to the cannabis retailers because they don’t allow cannabis content. We’ve really gotten to understand the general market and the state-by-state market, and I think the purpose of SpringBig is to support retailers in accomplishing their goals, to help them be more successful today than they were yesterday. We’re learning across the spectrum, so we have the ability to communicate what we’re learning and help them get better every day. Our customer retention rate is over 98%. I think this is specifically because of our customer service orientation here at the company. Retail in cannabis is like retail anywhere else. It’s a “now” business and we make sure that we address their needs as soon as they come.
What CRM insights are you able to provide to your customers?
Mainly, that anyone can create a loyalty program, but that doesn’t mean it’s smart or going to work. We see so many of these programs, and there’s a balancing act between what you offer and how that offer generates response and loyalty from your customer in a way that’s profitable. That’s one thing we see clear as day and we can see it by state. The other thing we’re able to help our clients with is to better understand what to say in the messages that they send out to their customers to get the response they’re looking for. They’re looking for the customer to visit more often and to spend more money when they do come in. We look at the stores that are doing it well and those that aren’t, and guide stores on how to do it better. The way to do it right is to figure out the cadence of your customer visits, then create a marketing or communications plan for the store that hits the customers at the right cadence level and communicates things the customer would be interested in depending on their buying behaviors.
How much are your customers able to personalize using your software?
In our platform, they can get pretty granular in who they want to message. There’s a lot of segmentation and personalization opportunity and our goal is to get more and more of our customers to use it. For example, they can message customers based on the categories of product or brands that they purchase, the average that the customer spends in the store, how frequently they visit, and how many times they’ve visited. They could even message customers based on the time of day that they shop. You have morning shoppers, afternoon shoppers, and evening shoppers, and they can communicate with these customers based on when they’re most apt to come into the store and purchase. Our product team put in a segment called Next Visit Time—after four visits, they can predict, with over 90% accuracy, what time a customer is going to come into the store if they do plan on coming in. We had an amazing client in Washington willing to test it for us. What we saw was shocking. On average, a text message campaign generates between $1-$2 in revenue per text message sent. When using Next Visit Time, that went up to $5-$6 per text. Our product team really nailed it, and now we have a lot of people using this tool.