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It might seem appealing to always offer low prices at your dispensary. But beware! Over-discounting can create more problems than sales.
Many dispensaries resort to discounts to attract customers. But if you compete on price alone with your competitors, this is effectively a race-to-the-bottom.
You'd spend too much on inventory and then sell it off at too low a discount to customers that know there’s a better deal around the corner, and ultimately lose out on profits.
Luckily, you can shift this to a more value-based approach. In this post, we’ll go through 3 dispensary marketing strategies used by industry experts to get customers and retain them — without risking profits.
Let’s roll this up!
#1. Be Smart About Your Discounts
Here’s an ugly truth that you need to understand.
Discounts on cannabis are, most of the time, ridiculous. The average discount is 20% off the MSRP (manufacturer suggested retail price). Which means stores tend to shave 20% off potential profits.
This incorrect focus on discounts makes dispensaries struggle financially and risks customer loyalty. If all you have to offer is a cheaper product, once the price of one of your competitors goes down, your "customers" will follow.
Do you know what that means? Less cash in the bank for you.
Now, we’re not saying you shouldn’t discount at all. You just have to be strategic about it. Here are 3 tips to consider before making your next discount.
Discounts Cannabis Products That Expire Soon
Most forms of cannabis are perishable. So, when you see expiration dates closing in, and you have a shelf full of flower, it’s a good time to offer discounts. This tactic allows you to make sure your products don't go to waste.
However, it's equally important to stock inventory you know will sell fast. Otherwise, you're always going to try to move it out of the dispensary via discounting and lose out on profits.
Learn The Cannabis Harvesting Cycle
On harvesting cycles, you can negotiate with your provider and get a deal. This gives you the chance to offer discounts to your customers while not incurring profit losses.
Create Bundles & Cross-Sell
You can pair products together to drive more sales and attract new customers. Remember to look at historical trends to see what bundles customers have bought in the past!
Don't do discounts as a last resort to increase sales. This is a data-driven decision, so you should see how it's going to affect your business before making a move. Look for ways in which this benefits not just your customers, but also your business.
#2. Prioritize Cannabis Customer Marketing
Many dispensaries pick coupons and discounts as their dominant strategy to grow their customer base. But after these first-time buyers get a sample of your products, they move on to the next dispensary.
And the cycle repeats.
However, it pays to prioritize getting the most out of your current customers' lifetime value than growing your customer base.
The first step forward is by creating a frictionless buying process for your customer. Here’s how to incorporate it into your dispensary marketing strategy.
Look for a banking solution: 80% of people prefer card payments over cash. Although there are limited banking solutions in the cannabis industry, you can partner with a POS like Treez that offers cashless payments as check out.
Implement a menu solution: Digital menus reduce waiting time as customers can order online or select the products they want from your digital menu via kiosk.
Digital menus are helpful for customers that want to skip the rush and order delivery instead.
Train your budtenders: Although budtenders aren’t part of your digital marketing efforts, their service impacts your customers' decision to return to your store.
It’s important to train your budtenders so they give customers the best advice on products and provide a better experience.
When it comes to the customer experience, you should analyze the steps in your buying process and ask yourself:
- Are there any unnecessary steps?
- Is there a specific step where customers fall out of your funnel?
- How can you make the buying process easier for your customer?
#3. Send Personalized Promotions via SMS Marketing
One of the best ways to enhance brand loyalty, educate or grow awareness — and recapture customers — is text messages. But there’s a very thin line between sending useful offers to customers and spamming.
You don’t want to cross that line.
But then, how do you incorporate text messaging as a dispensary marketing strategy without being annoying?… or blocked? Here are some ways you can provide value with your messages and drive more sales:
Send Messages Before Holidays
Doing this within the week or month before can help your customer plan their buying expenses and have you as the first buying option.
Not only that, but on the holiday, your customers will get bombarded with a ton of messages from your competitors. So, yours can be easily lost in all that noise
Segment Your Audience
This helps you send more personalized messages according to your customer preferences and key purchasing behaviors. Which in turn betters your customers’ loyalty, as you’re focusing on targeting what’s important to them
Text messaging is a solid first step to building a relationship with your customers. But it’s still important to identify how you are going to opt-in customers to your text marketing strategy.
After all, not all your customers are going to give you the chance to communicate with them. Once you get that chance, make sure to communicate something valuable!
Price continues to be a challenge for the cannabis industry. But with these dispensary marketing strategies, you're playing the long-term game: building customer loyalty on great experiences - not discounts.
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