Pricing Compression: Budtender Bias

Episode 2: Price Compression Series

This week in our Price Compression Series we’re taking a look at the Budtender Bias.

Here's the rub. Budtenders’ personal bias impacts sales. It's not their fault, it's called pricing sensitivity. People have a tendency to project their own wants and needs onto others. The cannabis store as an environment is not immune to this.

We can see the impact across the industry with a quick pull of Canada’s Average EQ Price of Flower - which has dropped by $3.13 per unit in just under 2 years. Headset Data

 

Budtenders and sales staff intuitively recommend what they would feel comfortable spending on a product while selling to a customer. This recently happened to me when I was on an out-of-town work trip. The keyboard on my laptop all of a sudden wasn’t working so I took it to a repair store. I was told they were going to need to keep it for 3-5 days. Immediately I thought, how can I solve this problem faster? The person helping me said there wasn’t a way.

Then, a second rep who was in training walked over and said for $100 you skip the line and have it done in 24 hours. SOLD!

What the first rep didn’t realize is that I had a very important report I needed to finish, and was traveling and didn’t have 3-5 days to wait - so at that moment it was an excellent use of $100.

The first rep asked, “Are you sure?”. Her own bias, because she didn’t see the value in the service, stopped her from recommending it to me. The training rep, whether it was top of mind to ask because it was fresh from their training or because they hadn’t been exposed to enough customers saying no to the charge offered my lifeline (yes, I’m too attached to my laptop).

In either instance, the option should have been for me to make.

This becomes a problem for our industry because (due to a laundry list of reasons) we've had to place the dominant responsibility on the shoulders of budtenders - without the support of education nor adequate compensation to back the task. Fundamentally, we are not setting budtenders up with the opportunity to experience a product that lives outside of their personal pricing sensitivity, which directly impacts the options presented to a customer.

The beauty and fashion industry has been combatting this for years. How do you have someone sell a product, that they themselves feel uncomfortable spending that amount of money on? In beauty, the solution has been gratis. Free samples of products, so sales reps have an experience with the product and this is not dependent on their ability or willingness to spend the money.

The role of the Budtender is here to stay, at least for the foreseeable future, as will their critical role in the consumer journey and builder of brand and retailer loyalty. The confusion around product categorization, restrictive packaging, and continued stigmas means we will all need to put more time, money, and effort into nurturing authentic relationships ensuring your brand is able to thrive.

Retailers

• Assess your employee discount program. When are budtenders buying, how does this relate to the sales of your products? Is there an opportunity to enable discounts on particular products?
• Create a feedback loop for your LP partners direct from budtender and guest with a critical analytical eye; recording ALL questions from shift-end by every budtender and then analyzing actual pricing questions vs. other key product attributes/purchase drivers
• Lean into extra training for new employees to help battle the ‘price-focused’ customer inquiries, instead focusing on personas and offering a range of products that will fit their needs

Brands

• Arming Budtenders with unique brand story, easy-to-digest product highlights, PK sessions around new categories, and support to the retailer overall (that doesn’t eat into their margin)
• Regular store visits to develop and maintain those authentic relationships with buyers and budtenders will remain key; which is challenging from a time management POV but allows time for top doors and opportunity stores
• Cheerful SWAG and product sampling (where legal) around product launches and in the early development stages of the relationship
• Working with a budtender membership club such as High Buds Club
• Make sure your brand is well represented in instore visual Merchandising