It’s important to think consciously about the brands you stock on your dispensary shelves.
Sure hallmark names, like STIIIZY or Jeeter in California, are no-brainers for your store, but what will you do with the rest of your shelf space?
Do you know what your customers want to buy? Check out this guide to figure out which brands you should stock.
Most Brand Loyalty Measurements Don’t Work
There are a ton of conventional ways to measure brand loyalty.
For example, you could qualitatively estimate word-of-mouth; how many customers ask for it. You could also look at their marketing and see how people engage with them.
Maybe you have data on what customers across your region prefer. However, none of these is the best way to determine which brands your customers want.
The best way is to start looking at order retention on the brand and product level because it involves your first-party customer data.
Essentially, you’ll be able to see brand engagement from customers that already buy from you and exclude data from areas you don't serve.
Let’s get into it.
What We Consider a Loyal Cannabis Brand
A brand with loyal consumers should be purchased by 20% or more customers after seven orders. This metric accounts for anyone who has bought a brand or product once and then orders again after six more orders.
It’s great to use for a few reasons.
Retention after seven orders indicates loyalty more than the proportion of sales because the second metric doesn't clarify repeat orders.
For example, many people might try Jeeter pre-rolls once, which can influence its proportion of gross sales, but it doesn’t tell you whether there’s an audience for this brand at your store. But its gross sales won't indicate if there's an audience that keeps buying this specific product.
Order retention reveals loyalty after seven orders because it accounts for everyone who orders Jeeter pre-rolls repeatedly.
Only customers that like Jeeter pre-rolls will order it again and again, unless you're running a promotion that would otherwise influence it.
You can also calculate this for specific products if you wonder whether some products under a brand perform better than others at your store.
Measuring Cannabis Brand Loyalty in Sirius
Our platform Sirius includes a Product Analysis feature where you can easily measure customer loyalty to brands. Here is the step-by-step guide:
Step 1: Select Products & Brands
Go to the Product Analysis feature and choose the brand or product you want to analyze. If you're only measuring brands, select the Brand Name and keep All Products selected.
Step 2: Run The Report
This is straightforward. Product Analysis automatically runs itself once you're ready to go. Select Run Analysis, and it will start.
Step 3: View Order Retention
Scroll to the section that says How Loyal Are These Customers and view the results.
You'll see how often customers order this brand or product after seven orders. If the number is greater than 20%, excellent! Keep it on. Otherwise, keep reading for the next steps.
What to Do with Cannabis Brand Loyalty Data
Remember, the goal of looking at brand loyalty is to have you rethink what you’re putting on your shelves. If you discover a brand that isn’t repeatedly ordered, there are two common ways to proceed.
The first is to check that this brand is not generating substantial revenue for your dispensary. If this is true, it's probably best to get rid of the product entirely.
At this point, you’ve learned that customers do not care whether this brand is at your store or not, so why spend extra money on it?
However, if the brand maintains some loyalty and generates revenue for your business, take these findings to your next meeting with your brand's account representative.
- Try to underwrite its cost so that purchasing it is less of a pain point
- Collaborate with the brand to market locally
These are just a few ways to use data to ensure that brands perform at your store and more proactively collaborate with partners.
Like this post? Book a demo for our Sirius analytics solution. Sirius helps retailers understand brand, product, budtender, and delivery performance in just a few clicks – so you can drive more revenue with your data.