Kirk’s role at Diem has been to partner with dispensaries and walk them through brand assessment and promotion with vendors. Finding reliable, high-quality cannabis vendors to supply licensed dispensaries is a crucial step for MSOs to prepare their retail stores for success. In meetings, each vendor is asked the same series of questions pertaining to if and how much they would be willing to underwrite a discount on their brand.
Developing well-thought out promotions and absorbing the net with merchandise credits, Kirk found that negotiating good promotions was key to keeping customer happy and inventory moving. Promotions like this really make the difference, especially for smaller businesses who might not be aware of how much they can negotiate with more well-known brands. Crafting product promotions with SMS proved to be easier with Polaris- understanding how the business works, what sells well. networking with vendors, and promoting to consumers requires rich, intuitive data tooling, and Diem seized the opportunity.
“Nobody else in Oregon other than the big MSOs were asking the questions Diem was asking of vendors. Smaller stores with just an owner or manager don’t know what they don’t know. With a well-rounded promotional campaign calendar and high-conversion SMS messaging, MSOs are using the best modes to promote inventory.”
When they met Happy Cabbage, Diem defined the need for strong product metrics and a powerful targeted messaging tool to ensure product velocity for their dispensaries, and they used Polaris and Sirius to help them with the job.
When looking at different dispensaries in a given state, it’s really important to work with your head buyers to understand product selection and mix. Even though they’re only 50 miles apart, Diem’s store locations in Salem and Portland were very different markets with their own sets of unique behavioral purchase patterns.
By looking at POS data and past promotions to selected customer segments, Kirk was able to run a hypothesis about what products resonated with buyers in each unique market, and tested his hypothesis with more nuanced targeting in more promotional campaigns. The conversion and purchasing captured in the marketing studio then informed product and mix, particularly top performing brand SKU and detailed product sales.
After testing all types of SMS promotions, Diem found that best ones ran from Monday to Sunday, not any specific day. They also learned how to craft the right message and present it in the most impactful way. Thanks to Kirk’s hypothesis and testing with Polaris, he sent an MMS (SMS message with an image) to roughly 1300 customers from his two Oregon locations, and generated about $10,000 for those campaigns.
“We learned that we should and could move away from daily deals. We were training our customers to wait to make purchases on certain days. People tend to shop throughout the entire week- why not target all those customers, instead of those who just tend to shop on Wednesday?”
Unlike wine, inventory does not get better with age. If certain products in dispensary inventory are 30-90 days old, that inventory starts to lose value. Kirk found that retailers who understand the need to move inventory are the ones who win the battle. Some retailers are wary of undervaluing their inventory, but if product has been sitting on the shelf for 65 days, the cost is carried by the dispensary.
To combat stale inventory, vendors can create velocity of sell-through for products that are aging or newly launched. By measuring velocity of sell-through, businesses can accurately forecast when they’ll hit quota, and optimize stronger performance, taking into account new sales opportunities, deal value, win rate, and subsequent marketing strategy.
How can dispensaries create velocity of sell-through? By getting product in the hands of interested customers, adding a discount, and rewarding loyalty with new offers.
To position themselves as product experts, Kirk sent MMS campaigns to customers outside of that product preference segment. Instead of narrowly targeting customers, he would send promotions for products adjacent to their first choice of cannabis, letting them explore new products they hadn’t purchased before, but that still resonated with their preferences.
After running a few promotions in this way, he saw people who typically tried only one category of cannabis move to more than one. The focus here is to lead a wider adoption of product types. Launching new products, introducing new brands, making the most out of times of year, and promoting across the broad category-wise.
Kirk remembers how his promotions have evolved over time- "Automated SMS marketing doesn’t work because it’s not nuanced enough. For a company to do well on the marketing side, they need to evaluate, understand, create, and execute based on nuances of their customer, they will perform better than using generic SMS blast platforms. If there’s one element in your system that’s important to understand, it’s customer recapture analytics. The longer they’ve been absent, the more difficult it can be to get them back."
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After negotiating brand discounts, crafting MMS and SMS campaigns, targeting customers throughout the week for products they love or could love, and measuring conversion and purchasing from said campaigns, Kirk noticed a boost in customer retention and campaign performance:
If there's anything Kirk has found with Polaris, it's that customer retention does so much more for your business than customer retention- current customers already love you, so keep them happy! Over the past 5 months, Diem has recaptured 116 lost customers, and growing.
With Advanced Targeting, Kirk was able to market to the perfect segment and boost customer conversion with an MMS campaign. After 24 hours, the campaign generated $10,467 in sales.
Diem's latest campaigns have shown how much they've made the tool their own. In November, a single campaign generated $28,109 over 7 days, speaking to Kirk's point about allowing customers to take advantage of deals throughout the week, instead of training them to reserve purchasing for one day a week.