Knowing which marketing metrics to track as a retailer is critical. At times it can be overwhelming to know which metrics you should be watching and what your results mean. In this blog post, we'll look at four key marketing metrics for dispensaries and takeaways from their results.
1) Average Order Size
Average order size is the most fundamental metric all dispensaries should be looking at when evaluating sale performance. It is the heartbeat to the business. When you know your average order size you can better forecast your sales and plan your inventory needs.
The average order size is also something that can be variable and is the easiest metric that you can impact to increase your dispensary revenue. A dispensary should focus on different tactics to increase the average order cycle over time as it directly correlates to revenue generation.
For reference, let’s look at an example:
In this example, if you can increase your average order just by 20% you can generate an additional $1.2M a year. Not too bad, right?
Compared to brick-and-mortar purchases, online purchases provide more data on customers and better-targeted marketing. Online sales are still a small part of overall retail sales but they are growing every year. A 2015 study by retailnext.com found that 94% of retail sales are still generated in brick-and-mortar stores. By 2016, the Commerce Department found that online retail sales accounted for 8.1%, a 15.6% jump in growth. One thing is clear, online purchases continue to increase every year. Do you have online ordering available for your dispensary? If not, learn more about how online ordering can boost your revenue.
2) Number of Repeat Customers
Now that you know how much customers are buying, you need to look at how many of those customers keep coming back. Why? Repeat customers are the lifeline of your dispensary business. Having loyal customers allows you to more effectively build your business and establish a stronger hold on the local market versus competing dispensaries.
Plus, increasing your number of repeat customers is much easier and cheaper than trying to find new customers. From a ROI perspective, you can’t get any better.
One way to build your repeat customer base is through a loyalty program. A loyalty program allows you to better track customer shopping behavior by providing value to your customers and relevant, targeted messages.
3) Purchase Frequency of Repeat Customers
The third metric you should be consistently looking at is purchase frequency. How often are customers coming into your dispensary? You can easily boost revenue if you are able to increase the frequency of customer visits. If your frequency is low, there is an opportunity to utilize a loyalty program to drive traffic back to your store.
While tracking metrics for offline customers is more difficult than online customers, use of a loyalty program can also shed insights into offline customer shopping behaviors. Dispensaries can easily track and monitor purchase frequency in-store through a check-in tool, such as Baker’s Checkin. On average, across medical and recreational dispensaries, the average checkin frequency is every 21 days.
4) Number of Rewards Redeemed
For a loyalty program to be effective and get customers to continue purchasing, it needs to provide a high-quality experience. Meaning, targeted and timely offers. If you are simply blasting your customers with worthless text messages or emails, the program will likely fail.
To measure the effectiveness of your loyalty program, the fourth metric to track is the number of rewards being redeemed. Knowing which offers are being redeemed the most can provide guidance on which offers or discounts to promote in the future. To take it another level deeper, you can also cross reference the number of rewards redeemed and total number of sales to determine the rewards with best ROI.
In this blog post, we’ve looked at four different marketing metrics including average order size, number of repeat customers, purchase frequency, and rewards redeemed. If you're a dispensary, start with these four to help build your business.