Navigating Economic Challenges: The Power of Marketing in Cannabis RetailJun 26, 2023
In today's economic climate, the impact of inflation and the looming recession has left businesses contemplating cost-cutting measures. Marketing budgets often become a target for reduction, but is that the right approach? But here's the thing: companies that keep investing in marketing during tough times tend to come out stronger.
Marketing: An Investment, Not Just an Expense
A study published by Harvard Business Review (check it out here) showed that maintaining or increasing your advertising budget can improve your share of voice. Let's take a look at Reckitt Benckiser as an example.
During the recession after the 2008 financial crash, while competitors were reducing their marketing efforts, Reckitt Benckiser decided to crank it up. They increased their marketing spend by 25%. The result? Their revenue went up by 8% and profits soared by a whopping 14%. Meanwhile, their competitors suffered revenue drops of 10% or more. See, marketing is an investment, not just an expense.
The Consequences of Cutting Back
Sure, cutting your marketing budget may bring temporary relief, but it can have serious long-term consequences. Here's why:
- Losing to Competitors: If your competitors keep marketing while you cut back, they might snatch your customers away. Staying visible and engaging with customers is key to staying ahead.
- Customer Experience Takes a Hit: Less marketing means less communication with customers. That's bad news for providing exceptional experiences and support. And guess what? Competitors will be quick to fill that void.
- Silencing Your Brand: Marketing shapes your brand's story and voice. When you cut back, you pause your brand's growth and weaken its position in the market. Not ideal.
Strategies for Cannabis Retailers and Brands
Discounting and promotions alone won't keep your cannabis business thriving. Try these simple strategies instead:
- Refine the Shopping Experience: Focus on creating an in-store journey that's all about exploring and finding value, rather than just relying on discounts. Show customers why your products are worth it.
- Empower Your Budtenders: Train your budtenders to address price concerns with customers. Set up your store to showcase products and provide talking points that highlight their value, not just their price.
- Leverage Online Channels: Utilize social media platforms, online advertising, and email marketing to connect with your target audience. Engage with customers, share valuable content, and stay top of mind.
- Build Customer Loyalty: Implement loyalty programs, offer exclusive discounts, and provide personalized experiences to foster strong relationships with your customers. Repeat business and positive word-of-mouth can be powerful drivers of growth.
- Highlight Value, Not Just Price: Instead of cutting back on your high-end products, highlight their unique value and benefits in your marketing materials. Let customers know why they should choose quality over cheap alternatives.
- Support Your Store Teams: Provide hands-on training to your in-store teams, alongside your marketing materials. This helps them effectively communicate your brand's message and deliver a consistent customer experience.
- Invest in Digital Presence: Enhance your online presence by optimizing your website, creating informative blog posts, and engaging with customers through social media. Provide educational content that positions your brand as an industry authority.
And for both brands and retailers, you can explore partnerships. Collaborate with complementary businesses to create joint marketing campaigns or cross-promotions. By joining forces, you can expand your reach and attract new customers.
When times get tough, cutting your marketing budget may seem like an easy fix. However, the potential outcomes and effects on your business can be substantial. Maintain your momentum and growth during challenging times by continuing to invest in marketing. By implementing strategic approaches, refining the customer experience, and staying engaged with your audience, you can build a resilient and successful cannabis business.
If this blog has you revisiting your marketing spend or strategy, make sure to subscribe to our newsletter. We help our subscribers tap into industry insights and recognize the signs of success to drive your business into higher profitability.
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