In this article, you’ll learn why segmentation is a crucial element to distribute content on your marketing channels. Not only because of the usual “it helps you understand your target audience better”. But also because segmenting your customers can help you build loyalty at your dispensary.
According to our data, one of the greatest challenges for cannabis dispensaries is customer outreach. So it’s no secret that once you get these new clients, your priority should be to retain them.
But how are customer loyalty and segmentation related? And how can you segment your customers at your dispensary? Is there a correct way?
Let’s find out!
What Is Customer Segmentation and Why It’s Important
Customer segmentation is when you group your customers in different segments because they share similar characteristics with the purpose of understanding them better. This is important because it gives you the opportunity to create personalized content to target each segment and achieve more sales, engagement, or brand awareness.
Segmentation is a much better approach compared to the old one-size-fits-all approach some businesses still cling to.
Think of it this way:
When you get a text message, there’s a 99% chance you’re going to open it and read it. You read it and see it’s a discount. There’s nothing wrong with that until you keep reading and realize it’s a 10% off discount for seniors (65+).
Also, nothing wrong with that except that you’re in your 30s, and the other 20% off for veterans doesn’t apply to you either. It feels like this dispensary is blasting out discounts or coupons to see who bites. So you consider opting out as you sense amounts of spam filling up your inbox in the near future.
The other side of the story can be that you get a Buy 1, Get 1 free offer on pre-rolls, a product you have bought before at your favorite dispensary. Not only that, but you were thinking a few days ago that you should buy more. So, you got the right offer at the right time, which prompts you to buy.
How Are Customer Segmentation and Customer Loyalty Related?
The relationship between customer segmentation and customer loyalty comes down to the customer experience. When you differentiate your customer into their segments, it’s easier for you to send personalized messages. These personalized messages make your customers feel valued because of the exclusivity of the offers, which increases your customer lifetime value.
As you may already know, the customer lifetime value works great in measuring customer loyalty and it’s a revenue metric you should track at your dispensary. Increasing your customer lifetime value means you’re building a relationship with your customers because they feel you care about them.
Customers are more likely to do business with you when they feel like they’re not just a number from a long list of contacts that you send emails or texts to every day. So, the more personalized the message, the better.
Benefits of Segmentation for Your Cannabis Dispensary
Still not convinced of the importance of customer segmentation and how it can boost your customer loyalty?
Here are some other benefits of using segmentation for your dispensary.
Effective Use of Your Marketing Budget
It’s true that you should personalize your content to resonate with your customers. But you don’t have the budget to track every single individual characteristic from your contact list.
Also, when you create content to send out on your email or SMS marketing campaigns, you could say it’s impossible to create personalized content for every customer. That’s where segmentation comes in.
You can create one text message for each customer segment. If you have five different segments, you can create five types of text messages and send them to their corresponding customer segment. This way, you could send hundreds of texts by just investing in creating five.
Informed Marketing Decisions
You can segment your customer base according to the category of products they usually buy, their purchasing frequency, brands they love, or even the money they spend on every visit.
Then all the data you collect from these segments can determine new strategies for your marketing campaign, how to make better use of your resources according to the results you get, and even help you plan your inventory.
A Competitive Advantage
Studying each one of your segments can give you information about new products or services you can offer. For example, you can try stocking from new brands, or test services like delivery and loyalty programs for your dispensary.
Not only that, but you can analyze the products your segment of customers buy together so you can cross-sell.
Prioritize Your Customer Segments
When you segment down your customers, you can identify which ones you should value the most and the ones that are expensive to keep.
You could have loyal customers that regularly buy from you, customers that only visit you when you offer discounts, or new customers that need more nurturing before becoming regulars.
Key Strategies for Customer Segmentation at Your Dispensary
Is there a correct way of segmenting customers at your dispensary?
The answer is no.
There are multiple ways in which you can segment your customer base. It all depends on what your goals are and the type of information you want to get.
But knowing that you came here for guidance, here are some data-wise strategies you can use to segment customers at your dispensary.
Brand-Based Audiences or Product Category
Brand-based audiences are a thing nowadays.
Even if you have a variety of products at your dispensary, some customers prefer to stick to the same brand.
Customers value the brands they repeatedly buy from. So, if you have various segments of customers that only buy from a brand, you can do a partnership to offer better prices or discounts.
This can also help you attract customers to your cannabis dispensary just because they care about the brand you’re partnering with.
Purchase Frequency and Value per Purchase
Purchase frequency and value per purchase are two interesting ways of segmenting your customers.
- When your customer last purchased from you
- How often your customer buys from you
- And how much your customers spend on every purchase
You have enough information to send the right content at the right time.
Our data suggests that consumers buy from your dispensary every 19 days and spend an average of $89.71.
Of course, this information can vary according to your segment. But once you have it, you can send a simple text message with an exclusive offer of 14g for $100 for body and mind strains if you notice your customer hasn’t visited lately.
This is a customer segment that buys based on the occasion (like holidays).
Here are some important dates to offer discounts to these customers and boost your sales:
- April 20th or more popularly known as 420
- July 10th – Oils and concentrates day
- August 8th—CBD day
Or any other holiday like Christmas, Halloween, and Valentine’s Day.
If you have a loyalty program, it would be smart to segment your customers according to their “level of loyalty”. This is a great way of knowing what kind of content you should send having in mind the relationship you already have with them.
Usually, loyalty categories fall into these three:
- Your most loyal customers frequently buy from you, even if you have a marketing strategy in place or not. It may look like you don’t have to monitor them. But it’s important to offer them exclusive offers or early access to new products to show them your appreciation.
- Regular customers who have infrequent purchases but still come to you every time. These are the type of customers you want to engage with more often so they can become loyal. You can offer them discounts, coupons, or cross-selling options.
- “Disloyal” customers are the ones who are already loyal to your competition, buy on rare occasions, or visit you when you have good deals. The strategy for these customers is to nurture them or have a marketing campaign in place, so they can consider your dispensary every time they buy.
Remember to identify your most valued customer and to create new strategies to provide great customer experiences. We’re at a time when customers have options. So, if they don’t feel happy at your dispensary they can leave.