Dispensary tips

5 ways dispensary owners can fight inflation and boost retail revenue

By
Dutchie
October 6, 2022

With the recent rise in inflation, optimizing the dispensary sales process is more important than ever. Having the right strategy in place is often the most critical factor in determining the overall success of any business—cannabis dispensaries included.

In this article, we’ve identified five of the most important revenue-boosting plans and organized them into a simple list to boost your sales during slow sale periods. They include:

  1. Putting your dispensary on the map
  2. Implementing a loyalty program
  3. Leveraging social media
  4. Investing in email and SMS marketing
  5. Offering customers a better way to pay

5 ways to boost sales at your dispensary

While you can't control inflation or the economy, you can control serendipitous discovery of your dispensary on the internet, loyalty programs, your social media marketing, and alternative payment methods. Continue reading below to learn the role each of these play in boosting dispensary revenue.

1. Get your dispensary on the map—literally

If you haven't claimed your business on Google Maps or Apple’s Maps app, you're losing out. Between the two, Google Maps is the crowd favorite, with 67% of the market cornered, but every pin counts. Adding a business listing to Google Maps is easy, and it pays off significantly in the cannabis industry. Many customers and patients value location above every other consideration when choosing a dispensary, so make sure they know where you are.

Even in our sophisticated digital world, maximizing your location will always provide shopping incentives. Make yourself known to locals so they're aware your store and your delivery routes are conveniently located.

Plus, as an added bonus, your map listing will gradually become an informal testimonial gold mine as happy customers leave positive reviews. If you get any negative reviews, you'll know what you have to work on to improve sales in the future.

2. Implement a loyalty program

A loyalty program consists of perks or points offered to frequent retail customers. With the strict rules and regulations of cannabis marketing, loyalty programs can increase basket sizes and turn occasional shoppers into lifelong customers.

Patient and customer loyalty programs have a history of increasing revenue in U.S. markets. Happy customers have every reason to come back to the place that delighted them with high-quality cannabis products. Many dispensaries give up on loyalty programs before they have a chance to deliver, while many others cripple their attempts by making avoidable mistakes.

Make sure your loyalty program is easy to sign up for (and opt out of) and simple enough to describe in a single sentence. Providing your budtenders with the right talking points can help drive loyalty plan adoption and increase return customers in ways no other single revenue-boosting strategy can.

Known as member programs in Canada, the market has different rules regarding creating incentives for your store. To adhere to this regulation, you can use other tactics like ​​retail value propositions, curated customer experiences, and long-term value outlined in How to drive customer loyalty for cannabis retailers in Canada. You can’t offer points that translate to a direct dollar amount, but you can connect membership points with creative ways to widen your audience.

Note: Like most things in cannabis, these rules may vary based on your area. Make sure to check your state laws regarding loyalty programs, especially in regards to privacy and data-sharing.

3. Get smart on social media

Social media remains one of the most powerful ways to connect with customers in any industry, and it is especially effective for driving sales in cannabis dispensaries. Knowing your customers is key to succeeding on social media—the better you can identify them, the more engaging and compelling your content can be.

Not surprisingly, there are many social media marketing tools and techniques at the disposal of most businesses in other industries. But once again, cannabis falls in a gray area, and directly promoting sales of cannabis products is a no-go in most channels.

Social media can be more than a place to promote your dispensary’s products, though. Instead, you can use it to promote your store’s brand ethos, understand your customers, and connect on the topics that they care about to build brand love and loyalty. Consider including them in the process of developing organic content, like UGC (user-generated content), staff stories, and customer testimonials. Customers like to see real-life examples and results.

Organic content is always best and lends a hand to our friends in the Canadian market. They can be straightforward and show their product, but Canadian cannabis retailers can’t advertise that the product is for sale in any way, or show any advocacy for the use of the plant (the law even states by real or fictional characters.) If you're a Canadian retailer, consider creating a marketing campaign that doesn’t focus on consumption. Again, educational materials work well and you can share your business’s blog on social channels. You can also set up an in-store display background for photos with branded props to get your business noticed by social media users.

No matter the market, social media companies will reserve the right to take a profile down if they deem it necessary—so be prepared to back up your favorite content. In the meantime, focus on carefully building brand recognition and add an age disclaimer to your cannabis business’s profile.

4. Invest in email and SMS marketing

Email marketing might sound like a relic of a bygone era, but it’s not. In fact, email marketing earns some of the highest returns of any single marketing channel available today. According to the latest data from Litmus, every $1 spent on an email marketing campaign averages a return of $36.

Did you know that Dutchie can help with win-back campaigns and other digital marketing strategies through our Dutchie Ecommerce integration partner options? Alpine IQ is one of our partners who has demonstrated success in driving interest and loyalty through omni-channel marketing, including text messaging.

In the U.S. market, dispensaries can use this feature to announce new product drops and stir up excitement from their shoppers. SMS has among the highest open and engagement rates of all messaging channels. According to a report by Harvard Business Review, 99% of all marketing text messages are opened and often, opened quickly.

5. Offer your customers a better way to pay

Adding Dutchie Pay to your dispensary's tech stack is a powerful way to increase sales and AOV. On average, dispensaries that utilize Dutchie Pay see a 19% increase in average order value (AOV), and 72% of shoppers who pay with Dutchie Pay return to that dispensary within 90 days. Despite current inflation rates, shoppers who use Dutchie Pay also purchase 60% more frequently than non-Dutchie Pay shoppers.

As a dispensary owner, it's important to recognize that today's consumers are ready to move away from the all-cash operational model. In fact, recent data from Pew Research indicates that more Americans than ever are joining the cashless economy, with nearly half of U.S. residents reporting they don't use cash at all for any purchases on an average week.

The portion of Americans who say that all or almost all of their purchases are paid for using cash in a typical week has steadily decreased, from 24% in 2015 to 18% in 2018 to 14% today. Still, roughly six-in-ten Americans (59%) say that in a typical week, at least some of their purchases are paid for using cash. — Pew Research Center

The bottom line

Customers and patients who have now experienced more convenient purchase options may never return to previous shopping behaviors. The push for curbside service and home delivery was already pronounced prior to COVID-19, and it now shows every sign of picking up more speed, like the delivery option that recently became permanent in private Canadian provinces (BC, AB, SK, MB, ON).

Cannabis dispensary owners that pay attention to these trends and position themselves appropriately—digitizing the retail experience, enabling order-ahead service, and emphasizing convenience—are going to have the best results moving into a post-crisis world. But, as most of us in the industry know, the times—they are (always) a-changin’.

About the author
Dutchie
The Dutchie Squad