Marijuana Dispensary Marketing: Segmenting Your Customers

Where's Weed

Published on 12/23/20

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Not every person is the same, and dispensaries need to make sure they don’t treat every customer with the same approach. Using market segmentation is one of the best tools a dispensary has at its disposal to divide a customer base into manageable groups so that each customer feels specifically catered to. In this article, we’ll go over the basics of market segmentation and how to best apply it to your dispensary. 

What is Segmentation?

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Segmentation is the process of categorizing your target market(s) into manageable groups based on identifiers, such as needs, demographics, experience levels, etc. Having a variety of smaller customer segments can help you learn how to market your dispensary on a more individual level, appealing more directly to a specific group of people. There are a variety of benefits to this:

  • Effective Customer Acquisition – Market segments help define what type of customers you have or want to have, to which you can then directly create content and market.
  • Increased Brand Loyalty and Trust – Content that specific customers can directly relate to, as opposed to content that generically relates to the average customer, increases the chances of a customer feeling loyal and trustworthy toward your brand.
  • Increased Brand Differentiation – More specific messaging will set your dispensary apart from the competition, increasing your brand image and social relevance. It also gives you more content to work with, making it easier to be creative and genuine in your brand creation and representation. 
  • Refined Product Development – Knowing what type of products specific market segments need or are looking for can help you tailor your stock to fit the exact needs of your customers.

You may have heard of “persona segmentation” – please note that we are talking about market segmentation.  While there is a common misconception that these two are interchangeable, the difference between a persona and a market segment is quite important. While segments look at categorical groups of customers to better anticipate market trends and consumer needs, personas are developed to deep-dive into what specific customers are looking for and emotionally need in a consumer experience. For a basic marketing strategy, segmentation is the better place to start.

How to Utilize POS Information to Segment Customers

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Your Point of Sale software is a great place to start creating market segments. Depending on what POS you use, there are several trends you can easily track:

  • New vs returning customer trends 
  • Product trends
  • Customer purchasing frequency trends

By analyzing these trends, you can make marketing decisions on which customers to target with certain emails and promotions. Let’s say you notice certain brands of edibles have been performing well over the last month – you can go through your POS data and pull out which customers frequently buy edibles to then create a market segment surrounding the frequent purchase of that product. Then, you send out an email to those customers (if you have that info) with a promotion for certain edible brands. 

Different Potential Dispensary Market Segments

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The most common market segment categories are age, gender, income levels, education levels and other similar identifiers. When talking about marijuana consumer segments for dispensaries, we can get a little more cannabis-specific. Consider what defines the different types of customers your dispensary caters to, then try to identify how unique aspects of those types can translate into a marketing strategy. For example:

New Marijuana Consumers

Monitor which customers have made a purchase at your store for the first time. You can create a market segment that targets individuals that have made a few purchases or only visited your website. Create content that educates on cannabis culture and highlights products that might be useful for newer cannabis users

Cannabis Connoisseurs

Like with new smokers, you can also monitor which customers frequent your store to create a market segment that targets people that know what they like. More specifically, this type of market segment can further narrow down to which type of product they prefer (i.e. vapes, concentrates, edibles).

Age Demographics

Cannabis has an eclectic audience, and it’s good to acknowledge that. Create content based on age demographics and cater to specific generations of customers. How you reach out to a younger generation of smokers will likely be very different than how you reach out to older cannabis community members

Ways to Reach Out to Market Segments

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Once you’ve identified what your marijuana consumer segments are, you’ll want to create effective ways to market to them. We suggest giving your customers the option to enter some personal information (i.e. phone number, email address, home address) upon making a purchase  or visiting your website. If they provide any information, you can then reach out with relevant marketing material. Here are a few popular examples:

Loyalty Programs

There are dozens of different types of loyalty programs, all with potential benefits. As a whole, they promote customer retention and purchasing frequency. One of the most popular loyalty programs is the points program, where customers earn points every time they make a purchase – eventually redeeming those points toward certain products. 

Text Message Marketing

Set up a text message marketing system that customers can opt into. Once customers choose to join a text message list, you can send out sales and promotional news via text. It’s direct, effective and easy for customers to subscribe or unsubscribe. 

Email Blasts & Newsletters

Tried and true, email blasts are an excellent way to get relevant information to your customers. Very similar to text message marketing, email blasts and newsletter makes it easy for customers to subscribe. You can then tailor the content you send each customer based on the segments to which they belong. 

Weekly Sales

If you make customer segments based on  product types, you can create a rotating list of weekly sales-relevant  items. Having weekly sales incentivizes customers (especially if they are discount-driven) to come to your store and make a purchase.

There are many different ways to reach out to different market segments and relate to specific customers. Let us know if you have any marketing tips or segmenting tricks to share by commenting below!