Boosting sales by knowing your customer and your market
Customers are the cornerstone of retail success, and cannabis businesses rely on their customer base to buy their products and share their experiences. Therefore, knowing your customers — what they want, what they experience and what they share — is important for all cannabis businesses. Additionally, understanding the cannabis market and the competitors within that market is also critical to a company’s continued success.
This type of information is generally obtained through proper research. For businesses that are really interested in learning about their customers and the market, there are many companies that can conduct this research at a reasonable cost.
There are several different types of research that are useful for businesses, because knowledge in different areas can inform business plans and strategic development.
Here are three types of research that can benefit cannabis businesses:
User Experience Research
User experience research, usually referred to as UX research, involves a range of research methods to gather data about the end users of a product. For cannabis customers, it includes their positive and negative experiences in purchasing and using different cannabis products, insights that are critical for cannabis retailers.
For instance, interviews with a group of customers can help inform an owner/manager about solutions to potential problems that may emerge from a new cannabis form or brand. Directly observing consumers navigating your website or your app allows you to engage in usability testing that can provide helpful information about the app or website so that needed changes can be identified and implemented.
UX research may be conducted at almost any time. For example, research can be gathered prior to introducing a new product or implementing a new promotion, or after new products are introduced to the marketplace.
Regardless of when it is implemented, UX research is best done regularly and continuously by gathering information from end users, because there is always new information to uncover. Focused UX research is imperative in developing desired products that consumers really want and how they can identify them.
Because market analysis investigates the attractiveness, dynamics and opportunities of a particular industry, it is especially useful within cannabis, especially considering the continuous changes seen by the industry. Through a market analysis, the strengths, weaknesses, opportunities and threats (SWOT) of a company and its environment are identified and incorporated into the company’s business plan.
Because of the regulatory issues facing the cannabis industry, market research is needed regularly, as laws may change and election cycles may influence the regulatory environment.
Although competitor analysis might be included in the market analysis, it is worth identifying as a distinct type of research. A competitive analysis in marketing includes recognizing the strengths and weaknesses of both current and potential competitors. This type of analysis allows a company to develop both offensive and defensive strategies as a means to exploit other companies’ weaknesses, creating opportunities while also defending against competitor strengths.
For example, if one company does not provide particularly tasty edibles, your own company can exploit this weakness by providing especially tasty treats the customers crave. This can become a point of differentiation for your company, but it is something that might only be uncovered through detailed competitor research.
Put Research to Work
Information is power, and information is generally gathered through research. Cannabis businesses can gain considerable information and power through appropriate, carefully developed, focused research. Therefore, it is important for members of this industry to take the time to learn about their customers, the market and their competitors to best create appropriate business and marketing plans that have the best chance of success in this evolving industry.