Executive Summary

• Loyal users are largely older, with higher levels of education but evenly split between income groups, showing loyalty is not reserved for the rich
• They work long hours and strongly value convenience, a luxury they are willing to pay more for
• They consume frequently, spend more than $100/week and enjoy flower, concentrates and edibles almost evenly
• Most concerned with dosage, lab testing and a consistent experience, price and discretion are secondary concerns
• Are somewhat hesitant to try new products, but can be convinced by friend's recommendation or attractive promotions

Most business owners depend on loyal customers – buyers who consistently purchase product, usually make up a significant portion of sales, and in many cases also draw additional friends and family to products and brands through “word of mouth” marketing.

Amongst California cannabis patients, the most loyal consumers are in their majority working-class people who are settled and stable, well-informed, and use cannabis with great frequency - over 70% of them use at least 5 days per week, most of those every day. Though it may seem daunting to win over these particular customers from competitors (given their loyalty), there are myriad opportunities to do so. Furthermore, the challenges may be less significant when targeting the many cannabis users with a tendency to be loyal, and who are still purchasing unbranded products.

Using the data from over 1,200 medical marijuana patients surveyed throughout California in 2016, Brightfield Group has created the Consumer Profile below to characterize the “loyal customer”: who this person is, how they behave, and what they are looking for in their product. Marijuana businesses may leverage this information to gain and maintain the valuable loyalty of this demographic.

Loyal Customers: Who are they?

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The most loyal of medical marijuana patients tend to be on the older side than the average, with Gen Xers making up nearly 40% of loyal users. Younger consumers have a tendency of always searching for free products or a great deal, and have more time to research new products and brands so it is not surprising that this mid-career demographic is more loyal than their younger counterparts.  Loyal users are more educated as well, with 44% having completed a higher degree. 

Approximately 55% of loyal users are male, which is similar to the profile of the average medical marijuana patient. 

Loyal cannabis patients have very different home lives, with a near even split between married (39%) and single (35%) users.  A full sixty percent consider their religion to be important to them. 

Loyal users come from all walks of life as well, a quarter being low income, 40% being middle income and 30% being high income.  This is an important designation as it shows that brand loyalty is not directly correlated with how much disposable income a person has.  Low income patients are almost equally loyal as high income patients, though the current landscape of cannabis products offers far fewer products targeted at this highly underserved demographic.

Loyal Customers: How do they live their lives?

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• Devoted to what they know, but open-minded

 Naturally, loyal cannabis users profess themselves highly likely to stick to their favorite brands, willing to travel greater distances to get the products they enjoy, and even pay a premium for products from a trusted brand. Not surprisingly, when compared to their less loyal counterparts, loyal users tend to be more hesitant to try new brands, indicating that they are usually disappointed by them. This initial reluctance on the part of loyal consumers should not be viewed as an insurmountable challenge, but rather as an initial barrier to entry that may be breached by vendors and manufacturers with effective marketing strategies.

For example, despite these tendencies to stick to known products and brands, the vast majority of loyal consumers express a willingness to try a new brand if tempted by a sale or promotion, meaning that the door is certainly not closed to those looking to capture new customers in this market. Furthermore, many loyal users are driven to try new brands by the recommendations of friends and family. To bring customers in the door, dispensaries or manufacturers might offer a discount to repeat clients who make referrals, or create first-time customer promotions.

• Savvy Consumers [9]

While discounts may be one option, another alternative is to draw in this well-informed consumer group by simply offering quality, reputable products and ensuring that information about them – including online reviews – is made easily available. In order to increase consumer awareness, cannabis community outreach initiatives (promoted by social media) and brand promotion at local industry events are encouraged.  This helps to promote awareness of brands, which, when coupled with pricing promotions at point of sale locations, may help encourage these loyal users to test new products. For these reasons, the massive Millennials market will be more allured by active and creative social media marketing campaigns that tie in innovative ideas and approaches, than it will by personal knowledge and trust of a brand, product or store.

This strategy will also encourage positive word-of-mouth marketing, an extremely important piece of the puzzle for an effective marketing campaign targeting loyal consumers, who are first drawn to products through friends’ and family’s recommendations – a factor they consider even more important than price.

Given this demographic’s tendency to research products before purchasing - either online or through their personal network - a good reputation has great value in attracting new loyal users to a brand or product. 

This demographic offers an excellent opportunity for well-prepared dispensaries or manufacturers to capitalize on. Those who can get past initial barriers and effectively capture loyal cannabis users, will have [in many cases exclusive] access to customers who will likely become faithful and frequent customers in the future.

• Convenience-Driven Homebodies [10] [11] [12] [13]

Loyal marijuana users are busy people; the majority of them work at least full-time while balancing personal and family commitments. After a hectic workweek, when they have free time available, two-thirds of loyal customers elect a night in. Rather than go out with friends or meet strangers, they prefer the familiarity and convenience of the comforts offered by home life.

These users seek convenience and time-savings through various other avenues as well; Many often purchase and consume fast food throughout the week – in fact, about a fourth of them eat out daily, or multiple times daily.

Loyal marijuana consumers are also more likely to use apps designed for convenience, such as Foursquare, Grubhub and Amazon Prime, than are less loyal customers. 

Furthermore, on the whole, they are quite willing to use credit cards to make online purchases – further evidence that loyal users hold easy access in high regard.

Given the high priority that loyal cannabis users put on convenience, and their willingness to spend more for said convenience, dispensaries or manufacturers looking to appeal to this market might see great gains simply by making products more easily accessible. Methods of doing so might include increasing the number and variety of products and brands they make available online, as well as making most or all of these available via delivery.

Longer-term strategies might also involve shortening delivery turnaround time, or creating/using an app specific to brand, product, or dispensary through which dispensaries or manufacturers could showcase products, draw in committed clients, and increase their loyal customer base. Along with good user reviews, apps targeted at loyal users should prioritize security and confidentiality as well as ease of use.

Loyal Customers: What marijuana products are they buying?

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Loyal customers favor flower above all other categories, with edibles and concentrates almost tied in second place. However, edibles have much higher popularity that concentrates and flower amongst many other consumer groups so it is interesting to note their only moderate popularity amongst this group. The likely reason for this is that edibles often offer an inconsistent experience, with some goods more concentrated in THC than others, within and across brands and products (even in many cases when looking at identical products).

Loyal users do not want to be disappointed in their cannabis products, and thus prioritize consistency and reliability, which is what makes them loyal to a brand or product to begin with. This demographic trusts marijuana products that they are certain they will enjoy or will help them feel better.

Loyal Customers: How much are they purchasing and consuming?

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A whopping 54% of loyal users are everyday users, and another third use between three and six days per week – thus the vast majority are frequent users.

Hand-in-hand with being frequent users, loyal customers are also frequent shoppers. The vast majority of them indicated having purchased at least two cannabis products over two weeks.

With so many purchases, loyal customers are spending a good deal on marijuana products – nearly $100 per person per week – making each client’s loyalty highly valuable.

Loyal Customers: What are they looking for when buying weed?

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When compared to less loyal cannabis users, loyal customers more highly value brand trust, the recommendations of friends, and lab certification when it comes to making purchase decisions. In line with our analysis of this demographic’s behaviors and tendencies, their motives appear to be more focused on consistent dosage and reliable product, than discreet product packaging or cost.

Loyal Customers: How can companies reach them?

Product Development

Because families’ and friends’ recommendations and brand trust are highly valued by loyal cannabis patients, the best way to ensure products break into these networks and users share recommendations is to generate a quality product in any category: edibles, flower or concentrates, as well as going great lengths to avoid offering the user a poor experience.

• Packaging and Product Positioning

Packaging should be memorable and attention-grabbing to help capture initial interest from this consumer group and help loyal cannabis users recognize product from the brand in the future. Dosage and ingredients should be placed prominently on all packaging, as these are priorities for loyal users. Lab certification is much more important to loyal users than the average medical patient and as such, companies should make sure that lab tested products are designated as such on the packaging.  While most major manufacturers now conduct lab testing, many do not have this prominently featured on their packaging and consumers are not aware.  For example, 14% of Venice Cookie Company consumers say they liked the product but wish it was lab-tested.  The products actually are lab tested, so this begs the question of how many consumers are they losing because this is not effectively communicated on their packaging?  Given that Hispanic consumers make up nearly one-fourth of loyal users in California, companies in the state should also consider designing product packaging with this substantial demographic in mind – for example, providing labeling or POS advertising in Spanish as well as English.

• Marketing and Distribution

As many loyal customers are still looking to unbranded products and haven’t committed to a brand or product in particular, this is a huge opportunity for manufacturers to encourage these consumers to try and engage with their brand in the hopes of winning over their continued loyalty. The most straightforward way to overcome the initial hurdle of lack of familiarity is to temporarily undercut the competition with a promotion or giveaway, and over the medium-term, to be sure product is widely available, authentic and consistent so users begin to better recognize and trust the brand. Along with creating quality products across the board to gain customer loyalty, promote positive “word-of-mouth” marketing and user reviews, budtender education and vendors should also encourage regular clients to draw in their own contacts by offering them discounts or bonuses for doing so.