Picture this: A loyal customer of yours named Sarah walks into your dispensary. She's been coming for months, always purchasing a similar product. She's part of your loyalty program and frequently opens your emails. Imagine you send her an offer on a product she's never interested in. It's like inviting a vegan to a steak dinner. This, my dear reader, results from adopting a generic marketing approach.
What is Audience Segmentation?
Audience segmentation is the meticulous process of dividing your loyalty program members into smaller, more defined categories based on particular characteristics. These can range from purchasing behaviors to how often they interact with your emails to specific events they attend. Think of it as tailoring your marketing attire to fit perfectly rather than opting for a one-size-fits-all approach. The result? A more profitable loyalty program.
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Why is Audience Segmentation Important?
- Personalization: Personalized marketing increases transaction rates six times more than non-personalized. Audience segmentation allows you to serve your dispensary loyalty program members with content relevant to their needs.
- Efficient Use of Resources: Targeting specific groups allows for a more efficient allocation of marketing resources. After all, why waste resources on marketing campaigns that don't resonate with your audience?
- Increased Engagement: A tailored message means more loyal members will feel understood and, as a result, more likely to engage with your brand. ## Types of Audience Segmentation Audience segmentation is about more than just dividing people by age or location. Here's where RFM Analysis comes into play:
Types of Audience Segmentation
Audience segmentation is about more than just dividing people by age or location. Here's where RFM Analysis comes into play:
Recency
When was the last time they made a purchase? Members who've recently made a purchase might be interested in complementary products. Here are two illustrative examples of how recency might drive different marketing approaches.
Just made a purchase
Customers who've just bought from your dispensary are prime candidates for complementary products. If Sarah recently purchased a cannabis oil, she might be interested in a high-quality vaporizer or even complementary edibles. It's about enhancing her overall experience.
Purchased a few weeks ago
This segment might appreciate a reminder to restock or try a new arrival. They may be almost out of their last purchase and would welcome a nudge.
Use your dispensary loyalty program to send out targeted emails based on the frequency of purchases. Offer "complementary product" discounts to those who've just purchased or "restock reminders" to those running low.
Frequency
How often do they buy? Regular buyers could benefit from special deals, while infrequent buyers might need a nudge with a unique offer. We'll look at an example of a customer who visits more frequently than someone who stumbles back to your store every so often.
Someone who buys regularly
These are your enthusiasts. They're familiar with your products and trust your brand. For them, exclusive access to new strains, events, or even 'members-only' hours can be a treat.
The infrequent buyer
They might be exploring their options or need clarification on what they like. This group could benefit from a sampler pack offer or a "curated product of the month" to reintroduce them to your offerings.
Segment your email list based on purchase frequency. Consider sending "VIP exclusive" deals to regular buyers and "discovery offers" to infrequent ones to boost their engagement.
Monetary
How much do they spend on average? Higher spenders could be enticed with premium products, while lower spenders might be more interested in discounts. Here’s how you might view the two differently.
Higher Spenders or VIPs
These customers might seek premium, artisanal, or limited-edition cannabis products. They value quality and exclusivity. For them, a first look at premium product releases or even an invitation to a tasting event can be enticing.
Budget-Conscious Buyers or "Ballers on a Budget."
lookout for value. They are price-sensitive; these individuals appreciate a good deal and respond to bulk purchase discounts or "happy hour" sales.
Categorize your dispensary loyalty program members based on their average spend. Craft exclusive "premium member events" for the high spenders while rolling out "value deals" or "bundle offers" for those more budget-conscious.
Beyond RFM, consider other factors:
Behavioral Segmentation
Understanding the behavior of your dispensary loyalty program members is akin to having a cheat code for improved engagement. Let's delve deeper into the nuances:
Product Usage
How and when do your members use your products? They may prefer edibles over vapes or lean towards CBD products for medicinal purposes. Segmenting based on product usage can help you target members with promotions or information on products they're likely to consume.
Benefits Sought
Why do your members buy cannabis products? Is it for relaxation, pain relief, or recreational use? Recognizing the underlying reasons behind a purchase can provide valuable insights. For instance, if a segment of your loyalty program members seeks pain relief, you could target them with products or strains known for their analgesic properties.
Loyalty Levels
Not all dispensary loyalty program members are equal. Some might be frequent visitors, while others might only drop by occasionally. Segmenting based on loyalty can help tailor specific offers. For example, you might offer exclusive discounts to your most loyal members or introduce a referral program to incentivize less frequent visitors to introduce friends.
Demographic Segmentation
While behavioral segmentation gives insights into the 'why' and 'how,' demographic segmentation offers a window into the 'who.' Here's how demographic factors come into play:
Age
Different age groups may have varying product preferences. For instance, younger adults might be drawn to trendy products like vape pens or artisanal edibles, while older adults might prioritize medicinal oils or tinctures. Segmenting by age can help you market age-relevant products more effectively.
Gender
Men and women might have different purchasing habits or product preferences. By segmenting based on gender, you can craft gender-specific promotions. Perhaps you've noticed that many of your female members lean towards skincare-infused cannabis products, while male members might prefer a particular strain or edible. Knowing these preferences can refine your marketing approach.
Income
Higher-income members might not flinch at premium products, while those with a moderate or lower income might be on the lookout for deals or value packs. Segmenting based on income can guide you in offering suitable promotions. For example, introduce luxury cannabis products to the higher-income segment and value bundles to those with a tighter budget.
Occupation
A person's job can offer insights into their consumption habits. Professionals in high-stress positions seek relaxation products, while creatives might look for strains that boost creativity. By segmenting based on occupation, you can send tailored newsletters or offers that appeal directly to their professional lives and needs.
The devil is in the details when it comes to dispensary loyalty programs. By recognizing and acting upon these behavioral and demographic patterns, dispensaries can craft promotions and messages that resonate deeply, turning casual buyers into loyal enthusiasts.
The Downside of Poor Audience Segmentation
Without proper audience segmentation, you risk
Lower Engagement
Generic content might result in fewer clicks, leading to lower conversion rates.
Decreased Trust
Bombarding your dispensary loyalty program members with irrelevant content could make them question your understanding of their needs.
Resource Drain
Without a targeted approach, you're essentially shooting in the dark, wasting precious resources.
Improving Your Loyalty Program's Marketing Through Segmentation
Start by gathering data about your loyalty members. Survey them, observe their buying behaviors, and interact with them to gain deeper insights. Then, apply your findings. Create specialized campaigns for each segment, testing and refining as you go.
Partner With CAA To Market With More Effectiveness
Understanding the nuances of your audience isn't just a 'good-to-have'; it's essential for the growth of your dispensary. At CAA, we're not just experts in cannabis marketing. We're your partners in ensuring your messages hit the mark every time. Let's create a strategy that resonates with your members, ensuring they feel seen, heard, and valued.
The world of dispensary loyalty programs is vast and varied. To truly make a mark, it's essential to tailor your marketing approach. Audience segmentation isn't just a buzzword; it's a tool that, when used correctly, can drive great foot traffic and a fatter bottom line. So, use the insights provided, segment wisely, and watch as your dispensary loyalty program evolves into an engagement powerhouse.
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