Choosing a Dispensary: How Customers Choose a Favorite Store
Marketing in the cannabis industry is a notoriously complex challenge. All legal cannabis states have different laws regulating dispensary messaging and channels, most of which are highly restrictive. At the same time, dispensaries have to compete with black market operators and a federal-level ban on cannabis products.
But even without the ability to advertise in most public spaces or promote products using mass media unless it’s verifiably adult-oriented (like in California), legitimate dispensaries do have options.
Cannabis consumers are clear about the factors they consider the most important when it comes to choosing one dispensary over another. Our team ran a comprehensive set of market surveys asking cannabis consumers this exact question and we uncovered these insights.
Top 4 Factors Cannabis Consumers Consider
We surveyed hundreds of cannabis consumers across the United States and were surprised to discover that the primary factors cannabis consumers pay attention to when choosing a dispensary are mostly the same between both recreational and medical users. This means that both medical and adult use dispensaries can improve sales figures by meeting customer expectations in the following areas:
- Product Quality
Let’s look into the specifics of each factor and how it affects consumers’ dispensary choices.
Location is cannabis users’ number one concern when choosing a dispensary.
In this way, cannabis dispensaries are similar to fast food and casual restaurants – convenience trumps most other considerations for the majority of patients and customers. Convenience, proximity, and parking availability all play a role in choosing the perfect location for a dispensary.
In practice, this means that a cannabis consumer is likely to regularly visit multiple dispensaries. A single consumer may have a favorite dispensary to go to from home, another to visit on the way back from work, and a completely different one nearby a friend or family member’s house.
For current dispensary owners, this presents an opportunity to improve sales through customer categorization. A dispensary located in a busy commercial district may want to highlight offers that will appeal to potential consumers nearby e.g. people leaving work.
With that, state regulations often get in the way of finding the perfect location. Dispensaries typically can’t be located within 500-1,000 feet of schools and similar institutions, and local laws may impose other requirements. This is often troublesome in high-density urban areas. For those looking to open a dispensary or add new stores to their enterprise, be cognizant of the importance of location.
2. Product Quality
If a consumer has to choose between two dispensaries that are roughly an equal distance away, the one with better quality cannabis products will usually earn the sale. However, defining quality can be challenging – the cannabis industry is similar to the wine industry in this regard.
Neither the strongest cannabis concentrates nor the highest alcohol-by-volume wines are considered the best. Like wine consumers, cannabis consumers often struggle to explain what it is they like about their products of choice, and environmental factors can change their opinion.
However, cannabis enthusiasts have a clear conception of what makes a bad product. Dry, seedy flower (and relatively low levels of THC and CBD) is usually considered low-grade. Medicinal-grade cannabis is similarly easy to pick out, especially for patients who rely on cannabis products to ease various painful symptoms.
Just like wine, brand reputation often takes precedence over the functional characteristics of cannabis products. Stocking your shelves with recognizable brands generates a sense of social proof among customers, raising the respectability of the entire dispensary and sending a clear message to customers about product quality.
While stocking great cannabis bud is a sure-fire strategy for the dispensary owner, stocking variety is equally important. Although many cannabis consumers find their favorites and stick to those products, many will periodically test different strains and products that use those strains.
Newcomers to the world of legal cannabis typically take time to identify the strain and delivery method that best meets their needs. For a dispensary with a large variety of products and a convenient location, this means that a single consumer is likely to conduct dozens of transactions before finding the product they like best.
Having a wide selection encourages this behavior and gives budtenders ample opportunity to engage consumers on a regular basis. It is through this “testing phase” that budtenders can guide consumers to the ideal product and delivery method while capitalizing on the additional up-selling and cross-selling opportunities presented.
Dispensaries must keep track of what products their customers purchase in order to remain compliant with state regulations. But that data also gives dispensary owners unique insight into sales trends. By making this information available to budtenders, dispensary owners can leverage consumer behavior patterns to personalize their sales approach.
For most cannabis consumers, product price is a final – but important – consideration when choosing between different dispensaries. If a consumer already knows what cannabis product they would like to purchase and is aware that it is significantly cheaper at one dispensary than another, there is a good chance that the dispensary with the lower price will win in the long run.
Medical dispensaries have more to gain by lowering their margins to attract customers. Medical cannabis users spend an average of $136 every ten days on medicinal cannabis products, while recreational users spend an average of $49 every two weeks. It’s impossible to tell how much black market sales affect these numbers as unlicensed dispensaries don’t report their sales figures.
Legitimate dispensaries can earn greater customer loyalty by offering daily deals for their most popular products. Social media promotions are also effective, but some states limit how explicit dispensaries can be when promoting their products online.
Another tried-and-tested way to improve customer fidelity is through loyalty programs. Several vendors like Foottraffik and SpringBig have purpose-built applications for customer loyalty in the cannabis industry. Using one of these (or creating your own) can significantly improve sales figures per customer in the long run.
Know Your Patient – Know Your Customer
Both medical and recreational cannabis dispensaries have a lot to gain by implementing modern customer relationship management tools at the budtender level. An accessible cannabis dispensary with a variety of high-quality products can personalize the customer experience for patients and customers more effectively than its competitors.