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​​Why Averages Don't Cut it When Measuring Budtender Performance

cannabis retail people profitable retail May 26, 2024

 Why do we even go shopping anymore? Why go to the store when we can order almost anything online and have it delivered?

Answer: the people. Dispensaries are no different. 


Cannabis retail is competitive, and budtenders are integral to your success. They're not just sales staff or cashiers; they're product educators, brand ambassadors, and the architects of an excellent customer experience. 

That's why measuring budtender performance is crucial. It allows you to identify top performers, gain valuable insights into customer preferences, and assess the effectiveness of your sales strategies.

However, many cannabis retailers rely on average metrics like average basket size, average units per transaction, and average discount rate. While these numbers offer a glimpse into performance, they can be deceiving. 

Averages paint an incomplete picture, potentially skewing the truth behind customer satisfaction and long-term success.

Do you think your budtenders are crushing it because they boast a high average basket size? Hold on. 

A high average ticket price might result from aggressive upselling tactics that prioritize a big sale over building customer loyalty. On the flip side, a lower average ticket price from a new budtender could indicate a focus on customer education, laying the groundwork for stronger relationships and future sales.

So, how do we move beyond averages and better understand budtender performance? 

Let's explore the pitfalls of relying solely on averages and check out alternative metrics for a more well-rounded approach.


The Pitfalls of Averages

Average Ticket Price: Bigger Isn't Always Better

On the surface, a high average ticket price seems like a slam dunk. It suggests your budtenders are skilled at upselling and driving revenue. However, this metric doesn't account for any nuances behind the sales. What's going on behind the statistics?

Do budtenders genuinely understand customer needs? Are they recommending the right products or pushing high-end options without connecting with the customer? 

Let's explore a couple of scenarios. 

The Newcomer
Imagine a new budtender focused on educating first-time customers. They might recommend smaller quantities or budget-friendly options to ensure a positive initial experience. This could result in a lower average ticket price, but it's a strategic approach that fosters trust and lays the foundation for future loyalty and potentially more significant purchases down the line.

Upselling at Any Cost
Now consider a budtender focused solely on maximizing the average ticket price. They might pressure customers into buying high-end products that don't align with their needs or budget. This tactic might inflate the average ticket price in the short term, but it could damage customer relationships and lead to negative reviews, ultimately hurting sales.

A better approach: Track overall sales growth with the average ticket price.
Tracking overall sales growth alongside the average ticket price lets you see if those high-priced tickets translate into sustained revenue increases or a one-time bump. This will allow you to see the trajectory of your business growth more clearly.


Average Units per Transaction: Let's Look Closer

High unit sales per transaction might seem like a win, but focusing solely on this average can be counterproductive. Budtenders prioritizing genuine customer service might recommend the perfect product, even if it's a single item. This personalized approach fosters trust and builds long-term loyalty, even if it doesn't inflate the unit count.

Let's check out two scenarios.

Quality Over Quantity
A budtender takes the time to understand a customer's specific needs and preferences. They identify the perfect product to address those needs, even if it's just one item. This personalized approach might result in a lower average unit count but leads to a satisfied customer who's more likely to return and recommend the dispensary.

Speed Over Service
On the other hand, a budtender focused on rushing customers through transactions might rack up high unit sales by recommending generic products or add-ons that aren't necessarily the best fit for the customer. While this approach might inflate the average units per transaction, it neglects the importance of building customer relationships in person. It can ultimately lead to negative experiences and lost long-term sales.

A Better Metric: Sales Efficiency
We understand sales efficiency when we track sales conversion rates alongside average units per transaction.

Sales conversion shows us the percentage of customers who walked through the door and made a purchase. How good are your budtenders at guiding people to the item that best fits their needs? 

Analyzing conversion and average units per transaction side by side equals sales efficiency. It's a more complete way to explore your business. 


Average Discount Rate: Discover What's Behind the Discount

In cannabis retail, discounts can be a powerful tool for closing high-value sales or attracting new customers. However, focusing solely on the average discount rate can be misleading. A higher average discount rate might indicate a budtender strategically using discounts to incentivize larger purchases, ultimately generating more revenue. 

On the other hand, a low average discount rate could suggest a missed opportunity to close a sale or attract new customers.


Two scenarios to consider:

Strategic Discounts Drive Sales
A budtender may offer a targeted discount on a high-value product to a customer who expresses strong interest. This strategic use of a discount allows them to close the sale while maintaining profitability. While it might inflate their average discount rate, it ultimately leads to a successful sale and a happy customer.

Discounts Can Erode Profits
A budtender indiscriminately offers discounts to every customer, regardless of purchase size or product interest. This approach might keep the average discount rate low but could significantly reduce overall profitability.

By only looking at averages, we see an incomplete picture. 


A Better Measure: Discount Effectiveness
We need to look at discount effectiveness to gain a truly comprehensive understanding of budtender performance. Don't just focus on the average discount rate. Instead, measure the impact of discounts on sales and customer satisfaction.  

Did the discount incentivize a larger purchase without compromising profitability? Did it lead to happy customers who are more likely to return?

By incorporating a well-rounded set of metrics, we can move beyond averages and gain a clearer view of budtender performance. 


A Comprehensive Approach

Get a global view of your business.
Consider these additional factors when measuring budtender's performance:

  • Customer satisfaction scores: Customer feedback reveals how well budtenders meet their needs and expectations. It's tough to beat this level of transparency from customers.
  • Sales conversion rates: Track the percentage of interactions that result in a sale. This indicates a budtender's ability to convert interest into sales. Making the transition from small talk into sales is essential. 
  • Inventory management: Effective budtenders understand stock levels and can recommend readily available or comparable products without overselling or getting pushy.
  • Product knowledge assessments: Leaders must conduct regular check-ins to ensure budtenders are up-to-date on product information and can answer customer questions accurately.
  • Mystery shopper evaluations: Secret shopping experiences provide valuable insights into a budtender's customer service skills, product knowledge, and overall sales approach. Mystery shopper reports often reveal information, both good and bad, that you may have yet to consider. 


Oh, Averages, You Sneaky Little Metric

Relying solely on averages can be misleading when measuring budtender performance. Averages only offer a surface-level starting point, not the depth necessary for strategic decision-making and business-building.

By incorporating metrics alongside qualitative factors like customer satisfaction or mystery shopper evaluations, we can comprehensively understand a budtender's impact on your business. 

This well-rounded approach empowers you to identify top performers and refine sales strategies. It also sets you up to cultivate a team that fosters customer loyalty and drives long-term success. 

We know staying ahead of the competition in cannabis retail takes focus. Understanding the comprehensive impact of budtenders on your business and looking beyond averages opens the door to continuous improvement and growth. 


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