As saturated legal cannabis markets become more competitive, incentivizing customers to choose your dispensary over others is key to attracting, retaining, and growing revenue. Out of all the strategies available to help meet those goals, some of the most dynamic and effective strategies use specials, deals, or discounts.
Why you should offer cannabis deals or specials
According to a survey from RetailMeNot, 74%, or nearly 3 out of 4 Americans claim that promotional offers are a factor when deciding where and what to buy online. From a biological and psychological perspective, science tells us that deals or coupons can actually create more happiness.
A study led by Dr. Paul J. Zak, professor of Neuroeconomics at Claremont Graduate University in 2012 revealed that participants that were coupon recipients, experienced a 38 percent rise in oxytocin levels (the love hormone) and were 11 percent happier than those who did not receive a coupon.
Cannabis deals are no different. Flowhub data found that 18% of all cannabis retail transactions include at least one discount.
18% of cannabis transactions include at least one discount.Source: Flowhub dataTweet
In this post, you’ll learn the most common types of cannabis retail specials, how they can help you meet your goals, and for Flowhub customers, how to create these deals in your dispensary point of sale system.
Identify the objectives of your cannabis deals
When considering which kind of cannabis special, discount, or promotion you want to build, your focus should be on answering one question: What is my goal with this deal?
To get the wheels turning, here are some example objectives to consider:
- Increase brand loyalty
- Increase the average cart size
- Increase foot traffic during slow hours
- Sell slow-moving inventory
- Sell soon to be expired inventory
- Promote a new product, brand, or partner
- Boost sales on a specific holiday or during a social event
- Create urgency with a limited time offer
- Increase word of mouth promotion
- Increase your online or digital presence
Identifying your goal first is important because the objective of your special will help you determine the best way to create targeted specials as a tactic to support those goals.
Next, we will review three types of dispensary special, and how they support different goals, so you can determine the most appropriate strategy for your store.
3 common types of dispensary deals
Most dispensary specials fit into three categories: Simple product discount, Buy something, get rewarded, or Cart subtotal discounts. The following sections will break down each different type of deal and give examples.
Simple product discount
This deal applies to a specific product. For example, 10% off cannabis-infused beverages on Thursdays. The discount would be on their beverage purchases, but nothing else.
This type of discount is common to help move specific products (like if you over-ordered, or have products getting close to expiration) or as a way to bring more customers into your store at certain days/times (like Munchie Monday).
Buy something, get rewarded
The buy something, get rewarded dispensary special is just what it sounds like — when a customer buys a specified item, they get another specified item for a discounted price. For example, if you buy one thing, say a 1/8th of top shelf flower, or CBD gummies, or shatter, or tincture at shelf price, you get another thing (maybe the same thing, or maybe a specific different thing) for a discounted price.
Specials can be strategically focused on the goal of upselling and promoting specific inventory items. The overarching idea behind these specials is “buy something, get rewarded”. The most common promotions using this discounting strategy are buy-one-get-one (BOGO) discounts, vendor coupons from pop-up events, and conditional purchase deals, such as mix and match bargains, multi-buy deals, or giveaways and sweepstakes.
If the goal is to sell slow moving inventory quickly, consider a BOGO, multi-buy, or mix and match special, where customers are incentivized to buy more of a specific item or items in order to reap the rewards. If using this discount to move product nearing expiration, you can increase the discount amount as the expiration date gets closer.
Cart subtotal discounts
Cart discounts are the most common and simplistic type of special. They allow you to apply a discount on the total purchase of all items in your cart.
Cart discounts can be used as a long term loyalty strategy to attract and retain a customer group, for example, offering a 10% veterans or senior discount. Or it can be used to expand your customer base and attract new customers, i.e. Northeast Alternatives’ first-time patient special or industry discount. Alternatively, cart discounts can be used to incentivize a behavior, like discounts on online orders or curbside pickup.
If your shop is in a high tourist area, one great way to encourage consistent traffic during off-seasons and beyond is to offer a “locals” discount that incentivizes residents in your area to call your marijuana dispensary their own.
Watch how The Green Joint utilizes the Nug check in app to add local customers to their loyalty program to then automatically offer a 10% discount every time they return.
Cart discounts can also be effective in drawing in customers during slow times of day. Two great examples of this strategy in action are outlined in our related blog post, Dispensary Marketing Ideas: 10 Creative Cannabis Specials: Cannabaska offers a 15% off “Early Bird Special” in the first hour that they are open, bringing in more customers before they head to work and Airfield Supply Company offers a happy hour special from 2-4 p.m. on Mondays and Wednesdays to catch customers as they leave work.
Dispensary Marketing Ideas: 10 Creative Cannabis Specials
Best practices for creating effective dispensary specials
For all three types of deals, you can further convert more customers with a limited time offer. When time limitations are in play, you’re taking advantage of scarcity marketing which uses the psychological condition called fear of missing out (FOMO).
Some of the biggest retail chains in the nation use this tactic to boost sales (Macy’s One Day Sale, or Amazon Prime Day) — and it works because it creates a sense of urgency for customers to take action and buy now, lest they miss out on a great deal.
We see sales spike significantly on cannabis holidays like 4/20, 7/10, Green Wednesday, or really any blanket holiday like Valentine's Day. These days are ideal opportune times for flash sales, further incentivizing customers to choose your shop during times they already plan on buying weed. As we all know, timing is everything. When creating your specials, keep this factor in mind.
It may be tempting to create tons of different types of specials, but these become more difficult to manage. Not only is it time consuming to enter dozens of specials and keep it current over time, but it makes it more challenging to determine which discount is the best deal for customers.
Your dispensary point of sale system will track your deals and determine the best option (with the ability to override which deal is selected), but if you have 100s of deals, you’re creating more complexity than is beneficial.
Instead, we suggest creating a handful of everyday deals as cart-level discounts, maybe for locals and veterans, and use Buy something, get rewarded and simple product discounts as appropriate to your strategic marketing efforts, like Shatterday or Thirsty Thursday.
Having simplified deals means your staff and customers are never confused about what specials are currently available and managers have far less to manage. You can delight customers with smart specials, not necessarily more specials.
11 Surprising Facts About Dispensary Discounts
Specials are most powerful when they save customers money, but also when they are current and fresh. Consider changing your daily specials quarterly to keep them fresh. But make sure you communicate this to regular customers so they don’t expect a discount when it’s not available.
Also consider auditing your specials regularly, at least quarterly, to make sure they are effective. If Flower Fridays are successful (i.e. the discount is used at a high volume, which is viewable in your POS reporting), but if Munchie Mondays are a bust, you may want to adjust to another discount that will drive businesses.
As you’re thinking up specials, make sure you find the balance between being profitable for your dispensary, while being meaningful for customers.
As consumers, we’ve all seen specials that prompt us to buy, and others that leave us disappointed. Put yourself in the shoes of customers as you’re planning your specials. Even if the discount doesn’t have large monetary value, the sheer surprise of getting a discount can please shoppers.
You can also employ a pricing strategy like price anchoring to lean on the psychology of consumers at your dispensary.
A special like buy one pre-roll, get one for a dollar is a good value for someone already interested in joints. And a simple 10% discount for seniors is enough to prompt that cannabis consumer demographic to visit your store (and tell their friends that you give them discounts).
Beware of blanket store deals (like 20% off of everything, every day) because unless you're marking your products up really high, this will have a negative effect on your margins and profits.
Always complete a few test transactions to ensure a seamless customer experience when launching a new special.
Try several variations in your tests to make sure the customer gets the right special, and that the special performs as expected. Make any applicable edits and test again until it’s correct.
Want more tips? Download the Deals Do's and Don'ts for advice on creating effective specials.