The countdown to 420 is on, and dispensaries from coast to coast should be gearing up by creating enticing 420 deals. With the 420 holiday landing on a Saturday this year, it’s expected to be the new biggest cannabis sales day in legal history. Incorporating promotional pricing to celebrate this beloved holiday allows your dispensary to tap into the 420 sales boom all while keeping your customers happy. Not only will these 420 deals drive sales on the day of, but if implemented correctly, this could likely lead to returning customers well beyond April 20th.
In this article, we’ll be covering 11 different promotional pricing strategies that you can use to boost your dispensary’s 420 sales.
What is Promotional Pricing?
Promotional pricing is a strategic pricing tactic that refers to temporary discounts or special offers to stimulate sales and attract customers. It creates a sense of urgency, which encourages customers to make purchasing decisions quickly. Ultimately, the main goal of promotional pricing is to boost short-term sales volume, but it can come with additional benefits such as attracting new customers, retaining existing ones, clearing out excess inventory, and increasing brand awareness.
How Does Promotional Pricing Affect Demand?
Promotional pricing plays a significant role in affecting consumer demand. When businesses lower their prices, they create a perceived value increase, meaning that consumers feel like they’re getting a better deal. This triggers two key effects:
- The Income Effect: Consumers can now buy more of the product with the same amount of money, which effectively increases their purchasing power. This effect is particularly powerful for price-sensitive consumers.
- The Substitution Effect: Lower prices make a certain product more attractive in comparison to similar products, leading more consumers to switch from their usual brand or product.
Another factor that can affect both pricing and demand is price elasticity of demand. According to a research paper written at the California State University, Northridge, the price elasticity of demand for cannabis is estimated to be about -0.418. A negative price elasticity value indicates an inverse relation, which means when prices decrease, demand increases, and vice versa. In this case, the value of -0.418 for cannabis implies that demand would increase by 4.18% for every 10% decrease in price. So overall, promotional pricing in the cannabis industry can likely lead to an increase in demand depending on the discount amount.
11 Promotional Pricing Strategies to Boost Your 420 Sales
Now that we’ve covered the basics of promotional pricing and how it can affect demand and sales, let’s take a look at some strategies you can use to boost your dispensary’s 420 sales.
1. Bundle Deals
Bundle deals offer multiple related products together at a discounted price compared to purchasing them individually. This strategy encourages customers to purchase more than they initially intended while still feeling like they’re getting a good deal.
A simple way to incorporate this strategy for 420 is by bundling popular strains of cannabis with complementary products like rolling papers, lighters, or edibles. If you feel like getting more creative with it, themed bundles like “Wake & Bake” (coffee and edibles) or “Relax & Recharge” (topicals and bath salts) bundles can add a fun twist to bundle deals.
2. Tiered Discounts
Tiered discounts offer increasing discounts based on the amount spent or quantity purchased, incentivizing larger purchases. Customers end up buying more to unlock greater savings, which increases the average transaction value and drives up sales.
For 420, you can implement spending tiers such as “10% off $50+”, “15% off $100+”, and “20% off $200+”. Not only does this strategy work for the day of 420, but offering these discounts the week leading up to the holiday can also encourage customers to stock up before the rush.
3. Limited-Time Offers
Limited-time offers create a sense of urgency by only offering discounts or deals for a short period of time. Since these promotions are only valid for a limited time, customers are prompted to make a quick purchase decision to take advantage of the discounted prices. Additionally, these “flash sales” or “hot deals” can create buzz amongst cannabis enthusiasts, which can further increase brand awareness.
During the week leading up to 420, you can introduce limited-time offers on select products or strains. On the day of 420, offer “420-only flash sales” throughout the day and “hourly specials” that feature steep and impressive discounts only available at certain times on 420 to keep customers engaged.
4. Loyalty Rewards
Loyalty reward programs reward repeat customers with points, discounts, and exclusive offers. Incorporating an enticing loyalty reward program can go far beyond April 20th. Promoting additional discounts and promotions using your loyalty reward program throughout the year encourages customers to keep coming back.
For 420, you can offer double points during the week leading up to or on the day of. Another option is to offer a coupon for a discount at a later date, giving customers a reason to come back and shop at your dispensary again.
5. Early Bird Specials
Early bird specials are promotions that reward early shoppers with exclusive discounts or limited-edition products. Offering these deals for early shoppers will help your dispensary attract a steady stream of customers leading up to the big day, allowing you to kick off 420 on a high note.
Throughout the week leading up to 420, offer a “pre-sale” with special deals for customers who place orders in advance. On the day of, you can offer early bird specials for the first few hours of the day to get customers into the door early.
6. 420-Themed Discounts
420-themed discounts incorporate the spirit of the beloved cannabis holiday. Cannabis enthusiasts who visit dispensaries on 420 are likely to be feeling festive, and themed discounts can appeal to their celebratory mood. Tying a promotion to the holiday will also create a unique and memorable experience for your customers.
One way to incorporate 420-themed discounts is by using creative pricing tied to the number 420, such as 42% off select items or $4.20 pre-rolls. Another way is to offer special deals on products with strains named after popular 420 references.
7. Volume Discounts
Volume discounts incentivize customers to buy a larger amount of products by offering discounts for bulk purchases. Similarly to the tiered discount strategy, volume discounts create perceived value with more savings as the quantity purchased increases. However, the difference between tiered discounts and volume discounts is the variety of products eligible for the discount. Tiered discounts allow customers to save on their entire purchase no matter which types of products they choose, whereas volume discounts focus on specific products or product categories.
A popular volume discount tactic is the “buy one get one” (BOGO) promotion that offers a steep discount on a second item. A simpler way to implement this discount is by offering volume discounts on specific product categories, like flower by the ounce or edibles by the pack.
8. Cross-Promotions
Cross-promotions involve partnering with other businesses to offer combined discounts or deals. Using cross-promotions can create additional value for customers, ultimately driving traffic to both businesses. Additionally, cross-promotions can help boost your dispensary’s brand visibility by having other reputable businesses put it on the map.
Consider partnering with a local restaurant to offer a “munchies” discount or bundle meals with cannabis products. If there are any 420 events in your area, partner up with the host to offer discounted tickets for customers.
9. Social Media Promotions
Social media promotions utilize platforms like Instagram, Facebook, and X (formerly Twitter) to announce exclusive deals and generate 420 buzz. While using social media can be a great way to expand your customer base, it’s important to be mindful of each platform’s terms of use surrounding illicit substances. Since cannabis is still illegal at the federal level, it’s recommended to familiarize yourself with the guidelines of each platform before posting anything cannabis-related.
The good news is that most platforms still allow cannabis businesses to post content as long as it doesn’t actively promote cannabis consumption. Leading up to 420, try to create content that positions your company as a lifestyle brand and share discounts that don’t reference cannabis specifically, such as 15% off your purchase on April 20th only.
10. Free Gifts With Purchase
Free gifts with purchase motivates customers to make a purchase by offering free items, usually when a spending threshold is exceeded. These free items are typically small accessories or branded merchandise. This strategy not only enhances the customer’s shopping experience but also encourages them to spend more to get the free gift, which drives sales and generates a sense of goodwill among customers.
For 420, you can choose a specific spending threshold and once a customer exceeds that, offer a free gift such as rolling papers, lighters, or branded merchandise. Keep in mind that giving away free cannabis samples may be illegal in some states, so be sure to double-check the regulations in your state before offering it as a free gift.
11. Events and Giveaways
Hosting in-store events and giveaways allows you to create excitement and draw attention to your dispensary during the 420 holiday. This unique and engaging experience allows your dispensary to capitalize on the festive atmosphere of 420 all while increasing brand awareness. Being at a fun cannabis community event also tends to put customers in a better mood, increasing their chances of making a larger purchase.
To bring people into your dispensary on 420, you can organize live music, educational workshops, or vendor demonstrations. During the event, incorporate giveaways such as raffles, prizes, or coupons.
Final Thoughts on Creating Cost-Effective Promotions
Crafting an effective promotional pricing strategy is an essential factor for success during the bustling 420 season. Promotional pricing techniques not only capture the attention of new customers but also motivate existing ones to return. It’s important to keep in mind your target audience’s needs and develop unique offers that cater to them. Take advantage of the 420 celebratory spirit by crafting deals that your customers will love and leave them coming back for more.
With so much to prepare before 420, people management just adds another task to your never-ending to-do list. Consider streamlining your dispensary’s people management before the 420 rush by using KayaPush. KayaPush is a cloud-based software specifically designed for cannabis that covers time tracking, scheduling, payroll, and more. Explore the possibilities of strain free HR and book a demo with us today.
