Optimizing Current Customers without Engaging New Ones is an Unsustainable Model
Cannabis dispensaries make a significant marketing investment in engaging and optimizing current customers. Afterall, repeat customers are the lifeblood of a dispensary … right? Well, yes and no. Yes, in the sense that repeat customers provide higher lifetime value to the dispensary as they rack up purchases. No, in the sense that their reason for returning might not be brand loyalty but the discounts the dispensary offers, diminishing that lifetime value. Looking at the top-performing flower brands week over week in New Frontier Data’s Equio Retail Suite , the average discount offered for each bestseller leaps off the page. Common Citizen, for example, was discounted more than half of its typical retail cost. While that level of discount is certainly an outlier, the average discount for the week’s top performing brands was about 18 percent. For dispensaries, giving up nearly 20 percent of their revenue to keep customers engaged is a double-edged sword: In a market like Calif...