Why Customer Service is Important for Your Cannabusiness

Updated: Jan 14, 2019

In this day and age, it’s no secret that customer service is important in whether a business succeeds or fails. Thanks to the internet and rise of social media, customers today are savvier, more connected, more demanding than ever, but fundamentally, they still have wants, needs and expectations like before. With anyone able to leave an online review these days, it's more important than ever to make every customer experience a positive one, so any cannabis business prioritizing that is making a wise choice. Collecting data from your customers can help you create a better customer experience that is unique and engaging enough to drive your sales, increase your bottom line and create a loyal customer base.

A great customer experience has a direct effect on retention and revenue and helps a cannabis dispensary stand out in a crowded field. Research done by Bain and Company, a global management consulting firm, shows that increasing customer retention rates by 5% increases profits by 25% to 95%. In the cannabis industry, the most successful dispensaries are not just the ones who compete on price, but ones who go above and beyond with their customer experience. As legalization accelerates, more and more dispensaries are able to offer products at a comparable level of quality as their competitors, effectively forcing them to compete in the arena of service and experience to stand out in the minds of consumers.

An excellent customer experience often seems intangible, something which appears as if by magic; however, a great customer experience does not require any spellwork or magical incantations. Just like any traditional business, a cannabis business needs to start with a thorough understanding of the journey your customers take with your business and brand and understanding how they feel at each touch-point throughout the journey. Simply put, the customer experience is the impression you leave with your customer, resulting in how they think of your brand, across every stage of the customer journey. Thinking of the customer journey allows you to use it as a road map to detail the full experience of being your customer, the sum of encounters with your business and brand from the initial seed of awareness to the repeat sale.

Unfortunately, there are inefficiencies during the typical customer journey, which often cover multiple touch-points managed by different parts of your organization (website, social media, administration, sales team, etc.), and with the creation of new technologies, laws, regulations and compliance protocols, the journey becomes more complex and the opportunities for inefficiencies increase. For example, a dispensary structuring its customers' path through the store as a physical queue may have some customers who enjoy looking over all the various products, but may also have customers who feel a sense of being "pushed forward" from behind and are unable to make product comparisons and considerations before purchasing. This may leave the customer feeling dissatisfied with their in-store experience, leave without expressing their dissatisfaction and choose another dispensary the next time they make a purchase.

According to Harvard Business Review, acquiring a new customer can be anywhere from five to 25 times more expensive than retaining an existing one. Furthermore, the Pareto Principle, when applied to business, tells us that 80 percent of your revenue comes from 20 percent of your customers. Knowing what satisfies them can lead to considerable boosts to profit, but how do you know what your customers really want? Customer feedback is the surest way to gain insights into what drives your customers to buy (and keep buying) from you. Taking the time to find out invites customers to express their opinions, allows you to gauge their loyalty and satisfaction, and creates opportunities to communicate new information such as innovations, changes or new product offerings.

Another Bain & Company study also reported that 60-80% of customers who describe themselves as satisfied do not go back for more business with the company that initially satisfied them. Unfortunately, that’s often due to a lack of connection. Customer satisfaction and loyalty mean little if you can’t remember exactly who provided that excellent service or product, highlighting the need to form positive and memorable connections with your consumers. In order to keep up (especially in the Amazon era), retailers need to offer a customer experience that goes beyond a brick and mortar store, like investing in their online presence by keeping in touch with their customers and building brand loyalty through communication.

Social media has made the voice of the customer matter more than ever, especially when poor experiences are immortalized in online reviews. Not only does increased customer satisfaction help you stand out from all the options available at our fingertips, but loyal customers are also retained for longer. During a visit, one dispensary's budtender made such a strong impression that I easily remembered his name the second time I visited, and the third time, and the fourth. He was clearly passionate about cannabis, just as knowledgeable, and warm and friendly; all of which helped form an unforgettable experience that I continue to associate with that dispensary. The loyalty program turned into a happy bonus, instead of a reason, to keep returning. The experience alone kept me visiting them instead of its competitors, even after I had learned that some offered cheaper prices. Similar to how people form personal connections to their favorite stores, bars, and restaurants, your dispensary can become "my dispensary" for someone else.

"Until you understand your customers — deeply and genuinely — you cannot truly serve them." - Rasheed Ogunlaru, Author of Soul Trader

Connecting with your customers is paramount, but that entails listening to the voice of your customers as well. The common business advice of “think like a customer” is archaic, because your customers are as diverse as your products and their preferences tend to vary just as widely. Don’t assume you know what every customer wants, ask instead! Collecting data from your customers can help you create a better customer experience that is unique and engaging enough to drive your sales, but more importantly create a loyal customer base, and The J. Whitney Group makes it easy to collect and interpret that data with our Customer Experience Survey designed to get you the insights you need to manage and measure your customer experience at every touch-point.

When your company invests in nurturing and managing the customer experience, it benefits your business both externally and internally. From positive word-of-mouth that generates customers loyalty and retention, to analyzing your sales processes, creating a more effective product offering and identifying opportunities to decreasing costs – the benefits extend all the way to increasing your bottom line. Because your customer experience efforts span across every department and team in your organization, using our Customer Experience Survey encourages company-wide collaboration, alignment on company objectives and provides your business with standard metrics you can use to benchmark your progress. Contact us today to see how we can help elevate your customer experience!

© 2019 by The J. Whitney Group.

All Regional Laws Apply to The JWG Services

Cannabis Business Consulting
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The J.Whitney Group, LLC

8565 S. Eastern Ave. 

Las Vegas, NV 89123

Bldg. 150 | Ste.172

P: 702.623.5543

E: cannabusiness@jwhitneygroup.com