Everyone is getting into cannabis. Those businesses which are able to deliver exactly what their customers needs and wants will thrive and flourish.
In years passed, it’s been better for dispensaries and growers to stay somewhat under the radar – not gathering too much attention for fear of cannabigotry and heightened scrutiny while the legal landscape continues to settle. With the growth in the industry, it has come time for cannabis professionalism to live up to the standards of other industries – both in business acumen and strategy.
Professionals in every industry have turned their sights to cannabis, and for those businesses already established in the market, there is a bit of trepidation as more money and bigger players begin to participate. How can cannabis businesses be confident they are making the best decisions that lead to their long term success?
Every day new customers flock to cannabis. The statistics for medicinal marijuana card holders are growing exponentially. The business is exploding with new startups.
Asking “how can I stand out” amongst the sea of green leaves on every surface, as business owners experiment with which social platform will be the most forgiving to cannabusiness and wonder how to reach future customers without the typical mediums of advertising available to them.
The unique opportunities of a “newly legitimate” industry means that there is little data to support educated business decisions. That being said, the entrepreneurs currently in the industry have a HUGE head start on every other company still in its infancy – they already have the customers, which give them access to a goldmine. This untapped potential gives them an unfair advantage over the competition. The question is are they using this data to make educated business decisions?
For clients who are asking these questions, my guidance for them is straightforward. Learn what your customers need.
“They need to get their hands on some weed” IS NOT why customers come to your business.
Why do they choose you over the others in a world full of choices? Is it your thoughtful product description? Is it the amazing service from your bud tenders? Do they feel more comfortable in your store than other locations?
In mainstream industries, the saying “investing in a repeat customer is a better than spending to get a new customer” holds true in cannabis. With average purchases ranging from $60-$100 per visit, continuing to provide what your customers love will do the work for you. But if you don’t know why they love you, you can’t find more customers just like them.
Let’s get specific. I’m going to share a case study we conducted for a dispensary to help them with their customer research (names changed).
Jennifer was about to be a first time “legal cannabis” customer. She opened up WeedMaps to find out where she could go to make her first purchase. Overwhelmed with “first time visitors get a free gram” offers, and a series of businesses that didn’t have a noticeable online presence, she opted to try a delivery service. Jennifer describes the experience as “okay”. The ease of ordering is pretty remarkable, and the driver showed up in a timely fashion, but she is reluctant to purchase from this provider because everything is in pre-measured, sealed bags which made her feel like she wasn’t really making a choice about how much she wanted to purchase. The onboarding process (sending her recommendation and ID via email to an unknown entity) made her a bit nervous, so she was reluctant to explore other delivery services.
Additionally, she didn’t like that she felt forced to rely on a one time interaction with a delivery service to find the best strains for her. When he arrived, he pulled out two small bags (out of many) and said “these are the most popular”. She makes a “minimum purchase” and while the product she chose is of a good quality, she wonders what she missed out on. She decides to find a dispensary she can visit. Wading through the locations on WeedMaps she finds a couple shops she’d be willing to try.
The first location was great – the service for first time customers was amazing! The bud tender took his time explaining all the various products available. The overwhelming number of options left her head spinning, and she leaves with over a $100 in products and goes home to explore her treasures, but doesn’t feel like she was empowered to make choices that are ideal for her preferences.
Feeling braver, she heads to a second dispensary. Here, the bud tender starts with “what are you looking for today?” and for the first time in her shopping experience she has an answer. “I think I like sativas” gives the bud tender enough information to pull out a few jars for comparison. The bud tender walks through the pros and cons of each strain, asking questions of Jennifer to hone in on what would be the ideal choice for her. Jennifer is able to smell the different choices, and in addition to picking a couple options for purchase, she decides to try a new edible. The bud tender treats her as though it’s not her first time, acting like her good friend making product recommendations.
When I asked Jennifer why she chose her current dispensary (the second option) – her motivations became valuable insights to reaching new customers just like her. She felt a sense of personal association with the business, the ability to explore the products in an unhurried fashion, and because she feels most comfortable there despite her dispensary choice being several miles further than her other options. She goes out of her way to continue shopping there because she feels most comfortable there. She isn’t overwhelmed by the options, and feels empowered with her purchase choices.
What is important to note in this scenario was that Jennifer wasn’t picking the most convenient, the cheapest, or the even the dispensary where her friends go. These are not the reasons you can rely upon to ensure the longevity of your business. “They have the best weed” never left her lips. For Jennifer, her loyalty was defined by how she was treated which left her feeling confident and comfortable about her decisions.
When Jennifer shares her preferences for her dispensary she is in fact sharing important data which will help your business grow.… She was asked point blank what she liked and didn’t like. Her complaints were used to help the cannabusiness refine their offerings.
For example, Jennifer loathed having no idea what strains were in stock – the menus on the apps were never truly indicative of what was on the shelves at the shop save for a few popular strains always in rotation. Every time she arrived, her first question was “I wonder if today is the day they have my favorite strain”.
Other feedback was that Jennifer found the entrance and parking situations to be a bit of a deterrent. She felt that she was entering a seedy nightclub with the bouncer outside after having a difficult time finding parking.
Without speaking to Jennifer, no one would really know why she chose one shop over another, much less the valuable insights that helped drive her decision making process.
With this newfound information, the owner is able to make some pivotal business choices:
- Encouraging bud tenders to learn the preferences of their customers, and making measured suggestions to reduce overwhelming new customers.
- Allowing customers an opportunity to shop in an unhurried manner makes them feel special.
- Adding a sampler range of products for “uncommitted” customers means more diverse, and higher ticket sales when the customer returns.
- Learning customers favorite strains, and adding them to an SMS alert when their favorite strain is in stock resulted in a marked uptick in repeat purchase frequency.
- The owner added some plants and a welcoming sign outside, and had security in the parking lot to help ease traffic flow, as well as opening the door for customers, increasing the curb appeal of their business to new customers who might have been intimidated by the limitations of the location.
Jennifer’s story helped build the customer avatar for her dispensary. Her story is told to new employees who are encouraged to consider other opportunities to meet the needs of customers like Jennifer. In finding a shop where her needs are met, and where she feels supported, she has not only become a regular customer – bringing regular revenue – she has also become an evangelist for her dispensary.
When her friends talk about cannabis, she refers them to the place she is most comfortable – her passion spreads to new customers for the dispensary – and they continue returning because they, like Jennifer, find their needs met.
The process of learning about their customers needs has turned this dispensary into a magnet for customers just like their already passionate customer base.
Magnetic companies don’t fear cannabusiness saturation, because they are laser focused on exactly what brings them more customers just like their amazing current customers.“Magnetic companies don’t fear cannabusiness saturation” Click To Tweet
In order for your business to thrive – no matter WHAT aspect of cannabusiness you are in – you absolutely must know what your customers need, want and loathe. If you’ve got customers, you can start by asking them. I don’t mean ask your mom and friends who will be more reluctant to give you brutal feedback. If you don’t currently have customers, start by interviewing other customers. What problem do they have that current offerings are not solving for them? Perhaps that is the exact niche you want your business to serve.
You need to learn what your customers loathe about you as well. Strap on some grown up boots and take the criticism. Buried within are nuggets of gold you can leverage to improve your service, or to better target your customer.
Create an avatar for your business – who they are, demographics, what they need, desire and hate. This isn’t some creative writing exercise, or something you should fashion based on someone you know. You should do the legwork to find out exactly who your customer is – then share this avatar with everyone you work with. When business choices are made, your avatar belongs at the table and should inform your choices.
Companies that invest in this type of thoughtful research are the sorts that will find themselves successful in the long term. There are other aspects to business success, but remember this, no amount of funding, killer supply or amazing work force will have as much impact on your longevity as meeting your customers needs.
In the coming weeks, I will be talking more about how to learn from your customers. I’ll be sharing techniques you can use to research and define exactly who your customers are and what they need. In the meantime, start asking thoughtful questions of your customers.
Find out their story and what brought them to your business. What do they love? What do they hate? What do they need that you provide? What can you learn from their story that gives you a leading advantage over your competition?
The saturation of cannabusiness will be a real scenario. Not all of those businesses will be around for the long run. If you start now and spend time getting to know your customers, then you will be ahead of the game for everyone else who is just now throwing their hat in the ring with the hopes of striking it rich.