The latest statistics on the cannabis industry are truly thrilling. Coming off a banner year—this despite a global pandemic—and with some 12% of Americans self-reporting as being active users, cannabis sales are truly booming. And thousands of entrepreneurs are taking note, applying for cultivation and retail licenses, and taking advantage of a “Green Wave” that doesn’t appear to be cresting any time soon.
All that said, cannabis doesn’t sell itself. Even the best-run dispensaries still need to plan and execute enticing cannabis sales to draw new consumers through the door, share exciting new products with their existing customer base, and sometimes—let’s face it—clear out products that for one reason or another just weren’t a hit.
What are the different types of cannabis sales you should be running to maximize your inventory flowthrough? Let’s run through them one by one.
Cannabis Sales: “Percentage Off” Sales
Simple to implement and simple to understand, the “xx% off” sale is considered by many analysts to be overall the most popular type of retail sale. Quoted in an interview on vendhq.com, Mike Catania, CTO of PromotionCode.org puts it simply:
“Storewide percentage discounts typically work best. A 5% off storewide, with few exceptions, will garner more attention and generate more sales than even a 60% off clearance, the next-best option.”
Of course, as with any sale, you’ll need to keep careful watch over net profit numbers. Is your sale actually sustainable? Still, some retail experts believe that even those promotions offering a lower percentage discount can still outperform our next option, the “$xx Off” sale.
Sales: “X Dollars” Off Sales
As the counterpart to the “percentage off” sale, whether or not you choose to try the “$xx Off” discount is largely a matter of personal preference. Writing in entrepreneur.com, businessman Craig Simpson writes: “What matters is [your customers’] initial impression of what is a good deal.”
Simpson goes on to cite a 2008 study in which marketers sent out two otherwise identical email campaigns offering either 15% off a total sale or a flat $50 off. While the open and clickthrough rates for both campaigns were more or less the same, the “$50 off” email generated 170% more revenue than the 15% off one, with a conversion rate some 72% higher.
Why should this be so? In this case, an instant $50 off just sounded like a better deal, even if it wasn’t. What’s more, it didn’t require anyone to do much math. $50 off? BOOM.
What this should tell you is that as a savvy retailer, you need to get into the consumer’s mindset and approach any sale offer from their perspective. And if you’re planning a big cannabis sale, try a more limited email or SMS campaign first to see which discount your customer base responds better to. The numbers, as they say, don’t lie.
The “Buy One Get One Free (or “Buy One Get 50% Off”) are two of the most popular types of cannabis sales there are, and for good reason: They’re great ways to blow through inventory items that, for one reason or another, your customers just didn’t connect with. If your state doesn’t allow you to give away cannabis products for promotion, obviously, you can charge a nominal amount (like $.01) for the second item.
But there’s a potential downside, too. Retail analyst Krista Fabregas of FitSmallBusiness.com cautions that—especially in the online sales realm—“BOGO-half-off” sales tend not to convert as well as straight-up BOGO sales. Why? Simple: Those percentage sales discount the cheaper product, leading to the perception of lesser overall value.
Cannabis Sales: Multi-Buys
These types of promotion—typically phrased as “Buy 2, Get 1 Free” or similar—are another great way to clear out backstock. But that doesn’t mean you should expect them to succeed automatically. Again, it’s a question of getting into the consumer’s mindset and seeing if the perception of value aligns with that of the products you’re actually offering.
Put another way: If the free product you’re offering with the more highly valued ones is clearly an effort to get rid of a valueless item, you may end up with more backstock then when you began. In this case, it may be wiser to bundle the poorer-performing product into a standard “BOGO” deal on its own to see if you can spark some interest on its own.
This category of cannabis sale also has two close cousins, the “Multi-Save” and “Conditional Buys” types. The former might take the form of an offer to take a set discount off the entire total with purchase of a specific item. The latter is more often used to leverage the perceived value of a non-goods offering: “Spend $50 and get 50 Loyalty Points,” to give one example.
These promotions can be effective, but—as always—there’s a catch. If the promotion rules of conditions are simply too complex, they may have the opposite effect: Turning customers off. Try running a limited test case, and seeing what the response and feedback are like before going all-in.
Early Bird / Happy Hour
Do you find that some hours are naturally a bit dead? Some dispensaries combat this with “Early Bird” specials, offering storewide or more targeted discounts in the first hour of business (or, conversely, during a “Happy Hour,” such as 2pm – 4pm).
These sales can have a twofold effect. In addition to just propagating a steadier customer flow into your dispensary and eating up those early-morning or midday slumps, all those interactions are opportunities. With fewer shoppers in your dispensary, budtenders can deepen the relationship with customers, engaging them on their personal preferences, suggesting new products or those they might have overlooked. For this reason alone, designating these “special hours” is a great way to broaden your reach.
Cannabis Sales: Daily Deals
As one of the most common types of cannabis sales, this one should be a no-brainer. We regularly advise all our clients to run these recurring calendar-style cannabis sales—“Wax Wednesday, Preroll Friday, etc.”—to build anticipation and predictability into their routines. Will your most loyal customers actually add your daily specials to their personal calendars? They will.
Cannabis Sales: Golden Ticket
Taking a page from the truly unhinged Roald Dahl book “Charlie and the Chocolate Factory” (or either of the two big-screen adaptations), some enterprising dispensaries have run “Golden Ticket” promotions, hiding a certificate for a truly exceptional and high-value prize in a single packet of prerolls.
Obviously, you’ll need to do some careful math to determine whether this type of cannabis sale is right for your bottom line. But if you’ve got a large stock of a particular product you’d like to see fly off your shelf, there are few ways to get it done more efficiently.
Gift With Purchase
This type of promotion entices potential buyers with the promise of an item of swag they actually want. Here’s the catch: It needs to be an item of swag they actually want.
As always, do your math first to figure out what type of free gift you can afford to—and are legally allowed to—give away. Might it be an accessory such as a vape battery, or an article of branded clothing? That can work well, especially if it’s tied into the next type of cannabis sale….
Cannabis Sales: Wear Our Swag
We talk about branding a lot here at Foottraffik, and for good reason: Being thoughtful and intentional about your brand identity is one of the most important investments you can possibly make in your business. And few things can build your brand better than incentivizing your customers to wear your branded apparel.
That’s the idea behind this particular type of promotion: Rewarding people who visit your dispensary wearing your branded clothing items. is it possible they’ll put it on outside the door and take it off immediately afterwards? Sure. But by welcoming and thanking them—with a discount off that day’s purchase, for instance—you’ll draw them into your dispensary family and let them know they’re part of a community. And that’s pretty much the essence of good salesmanship.
Cannabis Sales: First-Time Buyers
On a related note, generating that first visit from a potential customer is a hurdle you should be doing everything to reduce. Offering first-time buyers a handsome discount is a time-honored—and often effective—way to begin the crucial retailer-customer relationship. Demonstrate the great service and selection you’ve worked so hard to cultivate, and chances are they may not need a discount to drive the second, third, and ongoing visits.
Cannabis Sales: Senior Days
If you’ve done your market research, you know that there are consumer demographics that feel underserved by the current retail offerings. In the cannabis realm, one of the most common is senior citizens, who make up an ever-growing proportion of the consumer landscape. Make sure you let them know that appreciate their specific needs and goals by running cannabis sales targeting customers 65 and up, and offering products suited to address the concerns of the aging body.
Cannabis Sales: The Power of Digital Marketing
Here’s one thing about cannabis sales: Just as cannabis won’t sell itself, cannabis sales won’t promote themselves. For any promotional effort you run to be productive, you need to, well, promote it.
How? Start with the devices in your digital marketing toolkits: Email campaigns to spread the word to current customers, highly targeted mobile display ads that reach consumers when and where they’re most likely to buy, and powerful PPC campaigns that can help spread the word to consumers who weren’t even looking for you in the first place.
There’s more. You can even broaden your reach with dispensary mailer campaigns that make use of age-old techniques to target specific households, or leverage the growing clout of social media to launch innovative influencer campaigns that turn the very notion of traditional advertising on its head.
Whichever way you choose to reach out, be sure that you’re letting your customer base know about all the great promotions you’re running. Because a sale without consumers, well…isn’t much of a sale at all.