In the cannabis and hemp industry there are only a few tried and true truths: First, cannabis is medicine. Second, legalization needs to happen. And third, April 20 is THE cannabis holiday.
With the spring season budding and Willie Nelson’s birthday on the horizon, 420 is the apex of what has come to be known as the “high holiday season” for cannabis. Sales surge, discounts abound, and consumers line up to see what products to taste and experience next.
So what does this mean for cannabis and hemp businesses? Well, the industry can expect an influx of traditional customers looking to take advantage of deals and stock up, in addition to a wave of new consumers emboldened by the 420 buzz. Either way, it means more awareness of, and traffic to, these businesses. The challenge is to capitalize on the holiday while making decisions that positively position your business for long-term success.
Three things come to mind when looking at how to maximize the holiday return:
- Establishing stronger payment solutions
- Building loyalty programs
- Establishing a unique value add
Payment processing is a headache whether you work in cannabis or hemp. But there are reliable solutions for both sides that every business should be aware of that will enable strong April sales and catapult you to year-long success.
On the dispensary side, groups have developed Cashless payments which allow consumers to pay with debit cards transactions. The business gets the total value of the sale and the customer gets change back. These transactions allow for less physical cash to be exchanged and keeps the cannabis transaction in an electronic format. This increases consumer spend by an average of 25 percent simply by enabling the consumer to make their spending decision at the same time they make their product purchase decision. Meanwhile, in cash transactions, consumers are limited by the physical cash they have on hand. Additionally, Cashless payments decrease the businesses’ costs and transaction time by limiting the cost of cash counting and cash storage. In our experience we’ve seen a 38 percent decrease in cash handling and an overall eight percent bump in revenue due to offering the customer a preferred payment method.
On the hemp side of this industry we have merchant solutions that enable debit and credit transactions. These merchant processing solutions usually come with a rate-based fee structure normally ranging from 3.9% + 10-25 cents to upward of 5% + 10-25 cents per transaction. With more and more CBD companies popping up every day, brands need to be available for purchase at every opportunity, in store and online. So while brands can build a strong following in their local communities by a retail presence, an online presence is critical to make the next step to a regional or nationally recognized brand.
Once you’ve empowered your customer to pay with a card, the next step is to look at how you can maintain them as a customer. Loyalty programs are among the best ways to keep consumers coming back. When consumers buy products they love, they’re likely to come back, but when they buy products they love and they get discounts or special offers, it makes them feel like part of the brand and the brand’s community. This “special” treatment turns loyal customers into brand champions. One of the more common loyalty programs these days for hemp companies is monthly subscription services that offer larger discounts the longer you sign up. This is a great way to secure longer term revenue while keeping your loyal customers happy. Another common loyalty practice in the cannabis space is giving “points” for purchases that are redeemable through the brand website – normally redeemable for company merchandise or brand art. A great way to kick these programs off strong is to incentivize customers with a 420 holiday discount or points bonus, showing that if they sign up today they get a special benefit that won’t be around forever. Once they’re in your loyalty program you have a hook in that consumer and a reason for them to come back.
Unique Value Add
You have your way to collect funds, you have your loyalty program, how else do you turn 420 into a year-round benefit for your team? Develop a unique value proposition and differentiation that keeps consumers invested in your brand. Strive to be more than another CBD company, don’t just be a dispensary that sells cannabis. Position yourself as a CBD company that is eco friendly and donates to local land restoration, be a dispensary that works with local musicians to curate their favorite products. Just being a company is not good enough for long-term success, be more than a for-profit company. Engage with the local community, engage in causes and, most importantly, develop an identity outside your focus on making money. With a holiday that drives so much awareness toward your business, now is the time to tell customers why you’re unique and why they should buy from you for the long haul. This larger value allows businesses to outlast price changes or delivery deals. People will always buy a CBD or cannabis product, but telling people why you sell the product encourages consumers to buy with meaning rather than just buying to consume.
While all these ideas are important concepts for businesses no matter the time of year, they only become more important around 420 due to the added awareness the industry receives. So capitalize on the buzz and prepare for the holiday and your business can reap the benefits all year long.
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