Maximize your Cannabis SMS ROI & Delivery Rates with 3 Essential Practices
Earlier this week, SMS communications platforms (e.g. Twilio), widely used by cannabis retailers for text marketing, began flagging businesses that send cannabis-related messages from their applications.
The crackdown, prompted by federal oversight under the 2003 CAN-SPAM Act, poses a risk for retailers and cannabis SMS marketing platforms that engage or encourage mass texting of customers.
Furthermore, this latest regulatory pressure indicates that dispensaries must take on a much more targeted approach to their text marketing in order to survive the rapidly evolving cannabis SMS landscape.
Read below to learn how cannabis retailers can maintain their marketing efforts while further maximizing results with cannabis SMS.
Compliance in Cannabis Marketing
SMS compliance controls aim at preventing two types of communications:
- Cannabis communications; the federal government considers it explicit content.
- Spam message blasts; CAN-Spam Act prevents unwarranted spamming.
Cannabis SMS marketing is prone to both spam and compliance flags because marijuana-related SMS content is technically still illegal under federal legislation and therefore barred from commercial promotion.
With regards to campaigns, these controls are already beginning to restrict retailers from deploying mass text blasts, a format that already produces minimal impact according to Happy Cabbage data.
Polaris, Happy Cabbage’s data-centric SMS marketing platform, has proven immensely valuable to cannabis retailers in terms of attributed revenue from text campaigns deployed to smaller customer segments with explicit focus on product and brand preferences.
Essentially, we’ve found that sending higher volumes of individual campaigns to lower volumes of customers per campaign results in greater revenue impact, now in a considerably more compliant capacity.
Now that dispensaries must adhere to SMS compliance protocol, it's imperative to rely on data-driven campaign strategies as an alternative to mass-texting general promotions to every customer in a retailer’s database.
Happy Cabbage recommends three best practices for maximizing revenue impact via targeted SMS marketing.
Limit SMS Campaign Size
The number of customers per text campaign is a crucial component of effective cannabis SMS marketing since the latest text marketing compliance controls are poised to block mass text blasts that are now more frequently flagged as spam.
Instead, dispensaries should send niche, personalized messages to smaller target customer segments based on customers’ purchasing preferences and behavior, identifiable from on Point-of-Sale (POS) data.
This format is less likely to be flagged as spam and – as our data continues to prove – performs on average 3x more profitably than mass text blasts.
Establish Customer Segments
What’s the best way for cannabis retailers to reduce the number of customers per SMS campaign? Target personalized campaigns to unique segments (target audiences) based on each target audience’s specific preferences and purchasing behaviors.
Every cannabis consumer prefers different products and brands , which lends again to why cannabis retailers should avoid mass text blasts that send the same message to every customer in their database.
Here are a few ideas of unique customer segments for cannabis retailers to generate based on their POS data:
- Product-type affinity – ; flower, vape, edible, etc.
- Brand affinity – brand purchased from the retailer
- Order frequency – how often purchasing occurs
- Average ticket size – amount purchased per order
Establishing customer segments based on customers’ purchasing affinities and behaviors will inevitably reduce the number of customers per campaign, further enabling the retailer to personalize text marketing as opposed to mass blasts.
- Target flower, vape, or edible promos specifically to customer segments who prefer flower, vape, or edible.
- Target brand promos to customers who prefer those brands.
- Identify and recapture lost customers by analyzing their purchasing history in POS data, and avoid offering promos to customers who just ordered yesterday.
After executing targeted SMS campaigns, cannabis retailers should evaluate the impact of those campaigns to continue maximizing marketing success moving forward. Retailers can measure this impact directly from their POS data..
TLDR? Check Our Key Takeaways:
- Cannabis retailers should avoid mass-text campaigns at all costs. This format puts them at risk of being flagged and shut down by SMS providers.
- Limiting the number of targeted customers per campaign reduces the likelihood of being penalized for spamming.
- Instead, cannabis retailers should send campaigns to smaller customer segments identified by their order history in POS data.
Happy Cabbage empowers cannabis retailers to maximize their campaign deliverability and ROI via data-driven SMS marketing technology. Ready to learn more? Schedule a demo today.