Cannabis brand loyalty in 2022: does it exist?
By Kaitlin Domangue
Some maintain that cannabis brand loyalty is the industry’s biggest lie (this article used my content to support their opinion – & yes, I feel famous for that), while some high-performing brands do feel a sense of brand loyalty from their consumers.
Brand loyalty is how customers perceiveyour brand. What they feel and know about your brand based on what YOU tell them in marketing campaigns, through product quality & consistency, etc.
Price and money aren’t necessarily factors here, unlike customer loyalty – which focuses on transactional rewards and regularly offering the best prices, which attract the budget-conscious consumers.
The other cannabis brand loyalty camp says we are on the cusp of true cannabis brand loyalty, similar to what traditional CPG brands already see.
Perspectives on cannabis brand loyalty might look different depending on where you’re standing, but everyone can agree that cannabis brand loyalty doesn’t follow the same patterns as traditional CPG brand loyalty.
What does traditional CPG brand loyalty look like?
Brand loyalty has existed in the traditional CPG space for decades, y’all. You’re probably already familiar with it, especially if you moved from traditional Corporate America to cannabis.
Fenty Beauty is a prime example of a company with strong brand loyalty, in part because of its commitment to shade inclusivity and being one of the first brands to really feature makeup for all skin tones.
If it has a Fenty label attached to it: customers trust it and rush to purchase it upon launch. That’s brand loyalty.
Brand loyalty is something companies have come to rely on, but brand loyalty across traditional spaces has declined in the last several years.
This is partly due to the coronavirus shaking up our shopping habits, but increasing customer expectations and convenience are another reason for the decline.
How does this translate to cannabis?
Cannabis brands are already on a different playing field than traditional CPG brands. Where brand loyalty isn’t a question in traditional industries, some cannabis operators wonder if it even exists.
For one, a fragmented cannabis market makes it hard to test true brand loyalty. Everyone loves Jeeters in California, but the brand doesn’t exist in other markets. So how can we measure widespread cannabis brand loyalty?
Happy Cabbage Analytics has a clear metric for this.
They consider brands with 20% of customers purchasing more products after their first seven orders to have brand loyalty.
“Retention after seven orders indicates loyalty more than the proportion of sales because the second metric [gross sales] doesn’t clarify repeat orders,” says Happy Cabbage.
The fact that Happy Cabbage has a metric to explain cannabis brand loyalty means that it’s here in some form, though it might not hold the same weight it does in traditional CPG spaces.
Most cannabis consumers are experimental and trying new brandsall the time. Many consumers try a new product each time they visit the dispensary. BDSA found that customers don’t name “reputation of a brand” as even a top-10 influencer of their purchasing decision.
How cannabis can leverage declining brand loyalty
If traditional CPG brand loyalty is in decline, as many have stated, the cannabis industry is in a good spot.
Our means for obtaining customers are already different from traditional CPG brands. We can’t capture customers from anywhere in the country, forget attracting international customers. Our game is hyper-local.
Focusing on the needs and wants of your local market is one way cannabis brands can get ahead of declines in brand loyalty. Large CPG brands can’t as effectively leverage the hyper-local angle.
Additionally, most cannabis consumers are seeking three main things in their cannabis product: high THC, great flavor, and a good price.
Most traditional industries can’t summarize the needs & wants of most customersin the industry. That’s why demographic-specific and targeted brands exist to serve different needs.
But the cannabis industry can summarize the needs & wants of most consumers.
Most cannabis consumers areprimarily seeking those three factors – THC percentage, flavor, and price – which means you can attract most of the industry’s shoppers just by paying attention to those factors.
Of course, traditional CPG brands and cannabis aren’t in competition, but comparing ourselves to the traditional CPG space helps us prepare and respond to how consumers are changing.
At the end of the day: cannabis consumers are traditional consumers. They purchase cannabis, but they also buy makeup and clothes and household goods. Dispensary shoppers also hit the grocery store and mall.
Consumer trends in traditional CPG will likely influence the cannabis market to some degree, whether or not both spaces respond to those changes in the same way. Consumers are consistent, but the factors influencing each industry vary greatly.