Navigating the Green Line – How to Balance selling and profitability in Cannabis Retail | Where to order cannabis online

In the rapidly changing landscape of cannabis retailing, measuring a manager’s success goes beyond traditional metrics. It is important to strike a balance between maximizing profits and maintaining ethical sales practices. This is a complex dance that involves both business objectives and genuine care for customers. In this complex dance, data/metrics are a great way to focus on the right things while driving profits. To ensure the right focus and drive, you need to make sure that the data you collect and review is the right one. Right Data to support these goals

Redefining Key Performance Indicators for Cannabis Retail Managers

1. Sales Volume vs. ProfitabilityIn the past, the cannabis industry has focused on driving sales. This has often been done at the expense or profitability. Effective management is not only measured by the volume of sales, but also by their quality. Focusing on profitability, which includes costs, operating expenses and margins for products sold, is a sign of effective management.
2. Basket SizeThese metrics are essential for assessing a manager’s ability to increase sales, not only in terms of volume but also by upselling to ensure a larger basket.
3. Own Brand PromotionNot all dispensaries are vertically integrated, or have the ability to create their brands. Those who do can learn from the grocery industry. Retailers such as Kroger rely on their own brands to increase profits and maintain loyalty with their customers. Store brands are typically associated with higher margins, so the push to sell these products must be carefully balanced with customer preferences in order to maintain both profitability and satisfaction.
4. Strategic Discount ManagementManagers must find the right balance between offering discounts to attract new customers and maintaining perceived value. They must also ensure that discounts don’t undermine brand integrity or profitability. The race to bottom is real. As an industry we need to manage discounts appropriately. No more daily deals.

Data Analytics for Strategic Inventory Management
The industry has made great strides in data. It was difficult to get comprehensive market insights just a few short years ago. These tools are not perfect but they have improved dramatically. Headset Bridge and other market insight platforms, such as POS/e-commerce and advanced data analytics, are essential for optimizing demand planning and refining the product assortment. POS dashboards such as Dutchie, FlowHub, and Treez can be used to analyze and optimize the assortment. Other tools like Mosaic & Dispense and loyalty platforms such as SpringBig and Alpine IQ are also useful. These systems provide valuable insights that help businesses track sales trends and understand customer preferences. To enable:

• Optimizing Product AssortmentAnalytics tools can help managers identify which products are performing best and which ones are not, allowing them to tailor their inventory in order to meet the actual customer demand.
• Efficient OrderingYou can’t sell what you don’t have! You can’t make money if you don’t stock up!
• Continuous CommunicationCommunication is vital between store general managers, inventory management and budtenders. This dialogue ensures everyone is on the same page regarding inventory needs and that they can respond quickly to changes in consumer behavior or supply problems.

The Importance of Budtender Sales Techniques
Conscious sales practices are essential in the unique retail environment that is cannabis, where budtenders influence buying decisions directly.

• Aligning Incentives with IntegrityIncentives for budtenders have become increasingly popular in the cannabis industry. Brands are constantly looking for new ways to grab the attention of customers. It is important that budtender incentive programs promote products that meet customer needs, rather than just pushing brands. This approach ensures recommendations are made with honesty, increasing customer trust and loyalty.
• Comprehensive Budtender TrainingThe budtenders will be better equipped to match customers with products that meet their needs if they are educated about the benefits of the product and how to sell responsibly. The consumer path-to purchase model (a decision-tree that mirrors the way consumers shop for the category) can help budtenders guide customers to the right products.
• Balancing Metrics with EthicsPerformance evaluations should include both quantitative and qualitative feedback. This will ensure that budtenders receive rewards not only for sales volume but also for the satisfaction of the consumers.

Effective communication and team motivation
For a cannabis retail team to be successful, it is important to create a motivational and transparent environment.

• Goals and incentives for teamsIf the company has more than one dispensary it is important that the mission, values, and high-level goals of the company are communicated to all store staff. A general manager can then translate these goals into specific actionable targets for the location. Encourage collaboration by setting collective targets. This will improve team dynamics and boost achievement.
• Regular Feedback and RecognitionCommunication of constructive feedback and recognition of achievements should be done regularly, linking performance with broader business outcomes as well as responsible sales practices.

Tailoring KPIs to Marketing and Beyond
Aligning KPIs to broader business goals, such as profitability and customer satisfaction, is crucial for marketing teams and other departments.

• Marketing Spend ROIThis metric is crucial for evaluating the direct impact of marketing efforts on profitability and guiding budget optimization.
• Customer Lifetime ValueBusinesses can maximize their profitability and loyalty by focusing on building long-term relationships with customers.

Conclusion
The challenge for cannabis retail store managers is to not only meet sales targets, but also to do so while respecting the needs and wellbeing of their customers. This delicate balance of conscientious sales and profitability, enhanced through strategic use data analytics, is what separates successful businesses in this highly-competitive market.

Laurie Parfitt The CEO of LKP Impact Consulting, LLC, a leading fractional CMO firm, delivers comprehensive marketing solutions to the cannabis, CPG and other highly regulated sectors. Parfitt’s extensive experience allows her to guide brands, operators and technology providers through the complexities associated with digital marketing, social networking, consumer insights, brand activation and public relations. She is also a Partner with Avicenna – a restructuring firm that specializes in the cannabis industry. She is a highly sought-after speaker who regularly shares her insights at industry events across the cannabis spectrum.

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