Cultivating Cannabis Customers

NEWS & PRESS

Cultivating Cannabis Customers

September 7, 2021 | Education

If you have an amazing, thoughtfully produced product, it can be baffling when people aren’t knocking down the door to buy from you. 

This spring, we posted about how to keep the customers you have, but what if you’re struggling to find them in the first place? 

The cost of turning people who know your brand into loyal customers is slowly rising as competition heats up, and lots of previously underutilized online channels are becoming over-saturated. 

And as we snowball towards federal legalization, more brands, dispensaries, and farms are opening up each day. The people who do consume cannabis have a lot of choice, including continuing to support their black market dealer, and there’s work to do convincing the uninitiated that using cannabis isn’t wrong or dangerous. 

To break through, we need to create a thoughtful roadmap that will help us to find, engage and convert prospective customers. 

Sadly, like everything else that falls under the umbrella of branding, marketing, or advertising, it’s a little harder than average to execute and test in the cannabis space. 

What is customer acquisition?

Customer acquisition is how you gain new customers or persuade them to buy your products. It’s a marketing strategy used to get people from being aware that you exist to making the decision to buy from you. 

Customer acquisition costs (or CACs) refer to the cost of bringing in a new customer.

Why is it a challenge in the cannabis space? 

Some of the platforms marketers use in other industries to promote their businesses are shutting out cannabis or cannabis adjacent brands. Facebook, Instagram, and Google ads have the most in-depth data opportunities across the cost of finding new customers, tracking their behavior across platforms, and knowing whether and how they come back for more. 

Another roadblock is that the rate that consumers are being educated about cannabis isn’t keeping up with the rate of market expansion in this area. People are more concerned about their health than ever and might be scared to embrace cannabis if they’ve only ever heard war-on-drugs rhetoric, so cannabis brands need to also do the heavy lift of educating and promoting at the same time.

What does a customer acquisition strategy look like? 

A customer acquisition strategy is your plan for how you’ll lower the cost of acquiring new customers and leverage your most loyal patrons. 

Using data, your plan will game the process of bringing in people into your business until you optimise the amount of new customers you get for your marketing and advertising dollars. Once you determine the most effective methods, it’s easier to scale up your marketing because you can be confident that you’ll gain around X amount of customers from your activities. 

To find out where to test your resources first, you might consider techniques like:

  1. Customer segmentation and targeting
    As always, it’s good to begin with a deep understanding of your target audience. If you have more than one type, you may want to segment your activities accordingly.
  2. Lead generation
    Lead generation is the first step of customer acquisition. It’s how people who have never heard of your brand are made aware that you exist, through flyers, digital ads, events, or content.
  3. Digital strategy development
    A digital strategy entails using technology to reimagine your current processes in order to enhance your business performance.
  4. Inbound marketing strategy
    Using digital marketing tools like content, search, social and email, inbound marketing helps attract visits to the site through quality content and reputation building. This is a more nurturing approach to lead generation. 
  5. Customer conversion strategy
    A good conversion strategy adds value, creates a good customer experience, and turns browsers into repeat buyers.

And incorporate activities like: 

  • Digital Advertising
  • SEO optimization
  • Content marketing
  • Affiliate Marketing
  • Traditional advertising
  • Trade shows
  • Direct mail 
  • Email & organic social media 

Any ideas for a good customer acquisition strategy?

Cultivate your brand
Building your activities on the base of a strong brand will make your tests more effective. If you’re clear about who you are and who you want to be in the minds of your customers, your messaging will be more effective, and you’ll be appealing to the right people.

Know your marketing costs inside out
Your CAC can be calculated by dividing all the costs spent on acquiring more customers, which includes the cost of staff time, advertising, creative, and technical costs, by the number of customers acquired in the period the money was spent. Make sure you take everything into account before you commit yourself to one marketing strategy.

Try an affiliate program in lieu of social media advertising
When they close a door, we must open a window. Affiliate marketing is when you pay third-party publishers to generate traffic or leads to your website. It’s good for the cannabis space, because it’s a relatively low-risk way of expanding your online presence. Just make sure that when you set it up, you’re very clear about the parameters of your brand and that publishers aren’t advocating overuse, or misrepresenting your products. Herbalize Store, Bloomgrove, and AirVape all use affiliate marketing to bring people to their sites.

Lean into SEO
With Google Ads off the table (although some companies do experiment with them and get away with it), good SEO is vital to getting your content up the rankings and seen by the over 90% of people who use Google as their primary search engine. Search Engine Journal shares some useful tips.

Tweak your activities to find out more
After you’ve gathered data on how people are responding to your content, you can optimize and tweak as necessary. Get granular with the different demographics in your target audience(s) to test why some are converting better than others.

Work with other local businesses
As a cannabis brand, you’re likely confined to one state. Join together with local businesses to test offers. Offering free or discounted yoga classes, pizzas, or vinyls will not only delight potential customers, but will also show them that you’re an integral part of the community.

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