Eight Key KPIs for Cannabis Dispensaries Performance Measurement
The cannabis industry in the United States is a lucrative opportunity for entrepreneurs and investors. Suppose you are a member of the minority groups negatively affected by the illegalization of marijuana in the past. In that case, you have an advantage in being part of the cannabis business community. Cannabis entrepreneurial journey can be exciting but also very challenging.
Cannabis entrepreneurs who want to thrive in the cannabis industry need to strategically use data and technology in measuring their performance. There are various Key Performance Indicators (KPIs) that track business operations' performance and success. Most cannabis dispensary POS system monitor and track various key dispensary metrics. The collected information is presented systematically to provide professional insight and evidence-based decision-making.
Below are the critical key performance indicators that cannabis dispensary owners need to track in measuring the performance of their businesses.
Daily Transactions in their POS system
You need to know the daily total number of transactions in your POS system, then determine the average transaction time. Thus directly impacting the overall customer experience of your clients. Cannabis businesses with ineffective POS systems or untrained staff tend to lose plenty of customers due to long lines and slow customer service. The transaction time spent with each customer helps in staff scheduling; you will require more staff in sections with more customers and delays. Implementing an effective POS system will reduce the overall transaction times, giving budtenders more time to spend with customers, ensuring timely inventory updates and elevating the overall customer experience.
Average Purchase Value and Basket Size
Keeping track of the average purchase value and basket size collects detailed data about your consumer’s purchasing habits and the ideal market price points. Thus you can create relevant and practical upsell opportunities and promotional and marketing content. These strategies will increase the overall sales of the products in your cannabis dispensary. As a cannabis entrepreneur, you should tailor your promotional and sales offerings to suit the customer’s buying behavior, maximizing sales and profits.
Stock inventory and Cash Flow
When it comes to tracking the stock inventory, various specific factors determine the effectiveness of cannabis stock inventory. Tracking how cash flow is tied to the inventory stock, how fast the products are being sold, additional product procurement and inventory shrinkage are just some of the few aspects of effective inventory management. As a cannabis entrepreneur, you must ensure the POS system can effectively track and monitor every aspect of stock inventory. The POS system will provide you with enough data to forecast inventory and ensure that all fats moving products are always available.
Cannabis Products Sale by Categories
When creating your product catalog, it's essential to create various product categories. Tracking the sales performance of every product will determine which products are bestselling and which are low performing. Hence, you must have a detailed understanding of the cannabis product categories' performance. The information will come in handy when making critical inventory planning decisions. You will plan the products based on the category and season, ensuring the best-selling products of a particular season are well stocked.
Traffic Flow Patterns and Trends
The modern, robust POS systems for cannabis-based businesses offer more than inventory management; they can also track and monitor the traffic in your cannabis store. The sales report provided by the POS system can provide data and information on the peak hours, days and seasons when the store is most busy. You can collect more information on customer patterns and traffic trends in your cannabis dispensary and make intelligent decisions to improve overall customer experience and business operations. The marketing team will also know the strategic marketing tactics based on the traffic flow, trends and customer patterns.
Customer Retention and Demographics
Customer retention is one of the most critical aspects of brand awareness and marketing. Loyal customers are the best brand ambassadors for your cannabis business. The best way to build customer loyalty is by offering exceptional customer experience tailored to the customer’s needs. A customized customer experience is designed based on the various demographics of the customer, ranging from age and location to values and buying behaviors. You can track this information using a modern and effective POS system, giving you a detailed insight into your customers' individual preferences. You should also track new customers and returning buyers and observe their purchasing habits. The average transactions conducted by a customer will determine the overall lifetime value of the customer. Thus tailor strategic upselling strategies and product promotions via targeted market campaigns. You can also curate an improved shopping experience and promote customer retention.
Employee Productivity and Performance
The staff at your cannabis dispensary are the backbone of your business, and they can either cripple or promote the business. Most cannabis entrepreneurs make the mistake of recruiting staff members who lack the required expertise. However, failing to track employee productivity and performance is a grave mistake, costing business owners a lot of money. Effectively tracking staff performance on the POS system will identify the top performers and when employees are most productive. The information can also be used in staff scheduling, tasking the most effective employers to work during peak hours. You can increase staff performance by introducing incentives to the top-performing staff members. These KPIs can track the overall productivity and performance of employees. They will also show the critical areas of improvement in staff performance, implementing strategies like training and additional support.
Marketing Promotions and Product Discounts
Cannabis dispensaries make sales when they implement marketing promotions and product discounts. However, this marketing tactic only works when the discounts and promotions are strategically offered at the most primal time. More reason why cannabis dispensaries make many sales on discounts during the 420 celebrations. You can offer product discounts and promotions on days when you have low sales and during public holidays. When creating discounts and product promotions, ensure they come from a healthy percentage of the total transactions. Have a decent range so you can still profit from the sales, even after offering product discounts and promotions.
As you have read in this article it is not as straightforward as other industries. Operating a cannabis business is extremely difficult, and not having the know how can really affect your bottom line. Vende POS is made to help its clients run the business they have always wanted. Providing you with all the necessary tools for your business to succeed is our goal. Schedule a demo with us today and see how running your business on the Vende platform can help.