The U.S. cannabis industry is on the rise. Business Insider reports that in 2018, venture capitalists funneled 10 billion dollars into the American marijuana industry.
For comparison, that same report shows that legal-marijuana sales outpace the sale of both Oreos and organic produce. The burgeoning sector of legalized cannabis deserves the attention of investors and dispensary owners. As a relatively new marketplace challenged by advertising constraints, the best way for dispensaries to get a piece of this $10m payout is by ensuring customer loyalty. Since the cannabis industry does not have the freedom to advertise like companies such as Nike or Starbucks, finding new customers can prove cumbersome. That is why when a new customer walks through a dispensary’s doors, the company needs to do everything to retain them.
There are four primary ways to do this:
- Personalize the Experience.
Let’s face it. Even the most open-minded person might still feel uncomfortable buying medical marijuana for the first time. A personalized experience will go a long way to attract and reassure these hesitant customers. A more focused, exclusive experience can also net the business more cash. Research shows that a full 8 out of 10 consumers are willing to pay more to enjoy a customer-centric shopping experience. Customers crave a more intimate, individualized experience in all facets of consumerism, even the cannabis industry. Obviously, an inviting physical space with clear signs and appropriate decor is a plus, but the human element is critical. Stores have the opportunity to take customer service beyond the basics by embracing extra details like commiserating with a customer’s specific needs, remembering names, initiating cheerful interactions, and guiding a customer throughout the entire process. These personal touches elevate the entire experience
- Give Customers Ample Opportunities to be Loyal to YOU.
Forbes Magazine outlines the 80/20 rule, which states that 20% of customers account for 80% of your business. The more your company focuses on that 20%, the more revenue will boost your bottom line. There are many ways to do this.
Consider the following:
– Introduce a points-per-purchase standard, where clients receive incentive points for every purchase. Points are then transferred into specific and clearly communicated benefits.
– Adopt a flat fee program, made popular by Amazon Prime’s delivery charges.
– Provide consumers with access to new products and other perks as members of your gold, silver, or bronze club.
– Award customers with points for advertising your business on social media by posting selfies at your store, etc.
According to research, it costs five times more to acquire a new customer than to keep the ones you have, so even the money you spend to support perks and rewards will save you money in the long run.
- Focus on Being Loyal TO Your Customers.
Value your customers more than they value you. Embrace and express your business’ value and mission so that your customers always know where they stand and what to expect. Furthermore, commit to high-quality products and avoid cutting corners with goods and services, even if you feel that doing so will bring in more revenue. Your customers want the best possible quality.
In any business, problems arise. Be willing to solve these problems immediately and cheerfully, so your clients feel they are valuable to you. Of course, you can’t know a problem exists if you’re not told. Take the time to ask your customers how you’re doing. A vast majority will keep coming back even after experiencing a problem depending on how it is handled, which often simply means assuring them their voice has been heard.
Finally, consider the age of your customers and their specific needs to demonstrate your reliability. For example, Baby Boomers, especially value loyalty and would like to build that relationship over time. However, the current COVID-19 crisis is challenging those opportunities. Customers aged 70 and over are the most vulnerable, which presents both a challenge and an opportunity for cannabis retailers. How will budtenders reach out to assist those who are reticent to use online and digital tools? How will they help bridge the gap to share best practices on how to use an app safely and effectively, digital tool, or drive up service?
- Increase Sales with Cross-Marketing.
If a dispensary is located near bars and restaurants, a punch card system could be created where money spent at one business gives you a discount at another. Additionally, you could cross-market with other businesses frequented by potential customers, such as yoga studios, doctors’ offices, or spas. The most effective way to do this is to conduct market research on your consumers to access their lifestyle accurately. Working with other business owners can invigorate both businesses and help publicize your company without paying for advertising. This will also help normalize the cannabis experience for your customers and keep them coming back. There are currently 34 states that have legalized medical marijuana and 11 of those states that have said yes to adult recreational use. As the nation changes its view, thinking outside of the box in pairing industries for perks and connections will help both consumers and businesses thrive.
ath Power Consulting is an all-in-one resource for multi-modality survey and mystery shop research, competitive intelligence, compliance auditing, market analyses, employee training, and strategic consulting. Since 1997, we have helped our clients improve customer retention, build brand loyalty and advocacy, deepen employee engagement, measure compliance, maximize performance, and increase profitability – distinguishing them from their competition and giving them a commanding edge in the marketplace.