Five Things All Producers/Processors Should Know
By John Serrantino, Sales Director at PipelineDeals
Let’s face facts, there is a significant void in the literature about the finer points of selling cannabis into retail shops. Sure, there are a ton of tips out there, but most focus on the production side, and rightfully so-if you can’t grow, you can’t deliver the goods.
The cannabis industry is incredibly competitive, and all signs point to only more growth and competition. For those producers and processors who are working hard to create sound business processes to drive future growth, we’ve created this list of five actionable steps anyone can take to get ahead of the curve.
1. Communicating with shops? Take notes, schedule follow ups.
This is standard practice in almost any “traditional” industry. Most sales teams utilize CRM software to facilitate this process. Unfortunately, that technology has not yet been embraced within the cannabis industry. Unsurprisingly, the dramatic growth that many have experienced has left many of the industries top participants struggling the put in place fundamental tools and process.
All communications with shops should have a plan. Here’s a sample of the information salespeople should be collecting during their regular check in.
- What’s selling? Any noticeable market shifts?
- What products are getting the most traction? Competitors or otherwise.
- How are budtenders positioning your offerings?
- Inventory status
If we are operating on a 4-week reorder cycle, best practice should include a 2-week check-in via phone. The power of a CRM is in automating the reminders to complete these mundane tasks. This will enable your team to focus on exponentially growing the business through making more connections.
If you are selling into a new shop, it’s critical that all interactions are logged. No one likes a forgetful sales rep. It’s just as important to follow up in a consistent manner. That’s, again, where a CRM comes into play.
The recommended cadence for calling into a new shop will, admittedly, vary a bit. However, via a CRM we can automate how we schedule our outreach. Here is a recommended sequence:
In this example, you will see “Value Email.” This topic is addressed in our previous blog. The key here is consistency, which you cannot achieve without a strong software platform to provide visibility and structure to your efforts.
2. Sending samples? Have a clear process.
Samples are a fundamental tool for producer/processors to gain traction with new products and new retailers. This isn’t changing anytime soon. When to send a sample and how to follow up are areas that the industry sorely needs to improve.
Depending on the delivery method for your samples, it may be easier to follow up than in other situations.
That said, putting in place formal stages for tracking samples (not on the regulatory side, but on the sales side). This type of organization provides clear visibility and helps your team navigate potential opportunities in an efficient and orderly manner.
3. Know your metrics! No, not those metrics.
Ask a grow site manager what their yield was for a harvest 6 months ago; they’ll probably know down to the gram. They’ll also know their yield per square foot or per watt.
Ask a cannabis sales manager about their metrics, and the story is often very different.
Raise your hand if you have a clearly documented process for logging sales calls. Keep your hand raised if you know the Average Sample to Order Rate. How about the Average Sales Cycle Length? Average Sale Value?
If you do not know these metrics, you should. They, along with a number of others, are key performance indicators (KPI) within your industry. Building these reports into the fabric of your business early will play a big role in sustaining revenue growth.
In order to properly track these metrics, it is important to find a partner that can set up a system of KPIs to keep you informed on the health of the business. This can be a daunting task. Thankfully, there are resources that can help. Partners, like PipelineDeals, regularly work with cannabis businesses to help them understand which KPIs are most important and to develop the reporting that allows them to be tracked.
4. Constantly define your brand.
This is a competitive space. What makes your product noteworthy? This is where the marker meets the whiteboard. Your sales team should have a clear directive on how to position your product line. What is the story you want to tell? Make sure it’s the same throughout all interactions when selling your product(s).
A fully differentiated product offering will resonant with the consumer, but first and foremost, it must do so with the dispensary whose shelf space you are after.
It is a good idea to reaffirm your brand value quarterly throughout the organization. Your brand will evolve over time, it is important that the evolution is visible and understood by everyone throughout the organization.
5. Account Managers are your future, embrace it.
Relationships are and will continue to be the key in the cannabis industry. This is true at every level of the business, from Executives all the way through to the trimmers.
Account Management refers the management of sales and relationships with particular customers. An account manager maintains the company’s existing relationships with a client or group of clients, in order to remain a preferred supplier.
If current market trends develop as expected, dominant brands will begin to emerge in the industry. To effectively harness your brand, you must convey it and reinforce it with your relationships on a regular basis. This is precisely where Account Managers come into play. An effective approach will feature one Account Manager per 25-35 retail stores. This number can fluctuate based on order volume and frequency and can also be sliced on a revenue basis but starting with a simple rule is likely best as you scale your efforts.
Account Management is a hybrid of sales and support skills. It requires in-depth knowledge of all areas of production, packaging, and fulfillment so that they can filter and translate that to their key accounts.
Tying it all together.
There’s a ton that goes into developing a business so that it can sustain growth over any significant period of time. This is doubly true in the cannabis industry, where a dynamic marketplace and high competition are the norm.
Business leaders in the cannabis industry have every reason to be bullish, however.
The market is here to stay and demand grows by the month. To thrive in the face of this opportunity, and its inevitable challenges, companies need to double down on proven strategies for business growth.
Create a process to get new sales in the door. Manage those relationships so they last. Build a recognizable brand. And monitor KPIs to understand the health of your business. For any business looking to grow in this new market, these foundational pieces can’t be considered optional.