Originally written for NewJerseyCannabusiness.com
When opening a cannabis dispensary, most owners understandably focus on pressing issues such as funding, product, logistics and regulations. But take a look at states where recreational cannabis has long been legal and you’ll find another important trend, as well. The dispensaries that succeed tend to pay special attention to one other essential aspect of their business: smart marketing.
Like with any retail category, cannabis is a highly competitive business that gets more crowded with every license issued. To be successful you need to distinguish your dispensary with a unique brand, create a plan to reach valuable customers, and understand how to turn them into loyal fans.
The good news: there are ways to achieve this. Many dispensaries discover that it’s a good idea to get help from experienced marketers. In those cases, it pays to work with a team that understands the state-by-state rules and other challenges of cannabis marketing. But whatever direction you decide to take your marketing efforts, a good place to begin is by asking yourself these five questions:
Do I have a vibrant, coherent brand?
Sure, your dispensary has a name. But that’s not a brand – not until you infuse it with a specific set of characteristics that you want your business to stand for. To be effective, your brand should be authentic – something you truly believe in. Ideally, it should also be distinctive. This means learning all you can about your competition’s strengths and weaknesses, to find a niche or brand personality that you can own. But once you settle on your brand characteristics, it’s not enough to simply state them. You need a smart marketing effort to communicate the brand values in a consistent, coherent way.
There can be various aspects to your dispensary, of course, but which stand above the rest? Do you stand for wellness? The community? A good time? Social justice? Sustainability? Customer service? Product quality? There are many different types of brands that can be effective, but you have to choose one that is meaningful to you and live it every day.
Who are my best potential customers?
Part of a smart marketing plan is understanding your geographic market and identifying the segments that offer the best opportunity for you. It’s important to know your zip code demographics. Is your area young, old, wealthy, poor, conservative or progressive? The more you know, the better you can plan. In addition to demographics, it’s common to target two or three distinct audience segments. The target audience that you decide to pursue will influence your messaging, advertising, product mix, pricing, sales training — just about everything.
One target might be daily dosers who favor flower with high THC content and low prices. Another might be weekend dabblers who favor edibles and vape pens (and are less price sensitive). Another might be wellness seekers who experiment with topicals and tinctures. A good marketing plan identifies the targets that are right for your business, and comes up with effective ways to reach the audiences you want. You can’t engage with the entire community at once, and you shouldn’t try. Your marketing dollars are precious. Spend them only to reach your desired customers
How can I provide customers with a special brand experience both online and in-store?
Your brand should be consistent and clearly conveyed at every customer touchpoint – your website, social media accounts, advertising, and the in-store experience.
Consumers almost always start their shopping process online. Does your website make a good first impression? Does it embody your brand? Does it provide practical information to various levels of cannabis consumers? Is it intuitive and easy-to-use? A good dispensary web site needs a content strategy. If you have a minimal, generic website that is primarily a link to your ecommerce partner, you’re missing the opportunity to convey your brand to a prospective customer. And, of course, whatever you do, it’s important optimize your site for search engine optimization (SEO) to help your target customers find you.
Social media can be challenging for cannabis companies because of its many restrictions. But an active social media presence does need to be part of how you engage with your audience and build your brand. Even more critical: your in-store shopping experience, which should be the ultimate embodiment of the brand. Each of your target customer types should feel welcome and comfortable in your store. If you’re targeting weekend dabblers, your environment and communications can’t be intimidating. If you’re going after cannabis veterans, the in-store messaging that you provide them shouldn’t be too elementary.
Is my business focused on customer loyalty and advocacy?
After you’ve done all the work to earn a new customer, it’s crucial to keep them coming back. The cost to attract a new customer is often more than the revenue earned from their first purchase. Your true target is the lifetime value of that customer, which can be substantial. Loyal customers lead to a profitable, enduring business.
Customer loyalty starts with a good shopping experience but is nurtured with timely, targeted ongoing communication via text or email. A loyalty program is part of this, but it’s also important to provide messaging that is relevant to your customer. A cannabis connoisseur may want to know about a new strain or the effects of various terpenes, while a new cannabis user seeks more basic information. When possible, you should segment your customer lists and target your communication to their unique interests and needs.
Am I encouraging (and using) customer feedback?
Many consumers decide which brands or retailers to consider based on peer reviews. You need to actively encourage your customers to write online reviews on Google, Leafly, Weedmaps and elsewhere. Some dispensaries offer a discount to customers who leave an online review within 24 hours. It’s often worth it. Sharing positive customer reviews can be an effective advertising and promotional tool.
You also need to manage the sites where your online reviews appear. You’ll want to thank customers for good reviews and respond to those who may have negative feedback. The users of those sites will appreciate that you care about what your customers have to say. And being open to customer feedback can also lead you to make improvements to your business.
Inexperienced dispensary owners sometimes take a “Field of Dreams” approach to finding customers, guessing that “if you build it, they will come.” But in this highly competitive field, attracting and keeping an audience isn’t quite that simple. To establish a lasting, successful dispensary, you need to create a distinctive brand, target the right customers with the right messages, and pay attention to building customer loyalty. It’s smart marketing and smart business, and an essential part of making your dispensary dreams real.
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