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.
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 of the business. When you know your average order size you can better forecast your sales and plan your inventory needs.
The average order size can be variable and is the easiest metric that you can impact to increase your dispensary revenue. 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. According to Influencer Marketing Hub, in 2021 alone, the number of online shoppers has risen to a whopping 2.14 billion, or approximately 28% of the global population. This indicates a 4.4% increase per year, adding 900 million more buyers in 2021. 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.
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. For instance, A 5% increase in customer retention correlates with at least a 25% increase in profit. (Bain & Company) 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 an 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.
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 use a loyalty program and send targeted marketing campaigns to encourage customers to come back in and make a purchase.
While tracking metrics for offline customers is more difficult than online customers, the use of a loyalty program can also shed insights into offline customer shopping behaviors. On average, across medical and recreational dispensaries, the average check-in frequency is every 21 days.
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 the total number of sales to determine the rewards with the best ROI.
With Blackbird's actionable analytics, you can see which items contribute the most to your sales, your order average, and everything else you need to set and adjust your online sales strategy. Blackbird offers data and analytics that provide insights you can implement in your business immediately.