Cannabis Sellers: Are You Leveraging Neuromarketing?
Neuromarketing (also known as behavioral economics) is a powerful lever to boost retail revenue & profit, enhance the customer experience and improve B2B selling rates.
These methods can nudge buyers through architected product choices, leveraging sub conscious biases and capitalizing on a person’s heuristics (i.e. mental short cuts).
The key idea behind Neuromarketing has been proven through lots of research and case studies...
People are often irrational when it comes to evaluating and making purchase decisions.
Neuromarketing strategies have been proven effective in the retail (online & physical), wealth management, business services, CPG, and healthcare sectors.
Here are 6 of my favorite precepts:
1️⃣ The Paradox of Choice
➡️ Give consumers too many options and they’ll choose nothing. You want to limit your product assortment and recommend good, better and best.
2️⃣ The Framing Effect
➡️ Communicate the same thing two ways, and you can get two completely different reactions.
For example, marketing a product as 99% fat free will be more appealing than saying it only has 1% fat.
3️⃣ Anchoring Bias
➡️ That first number a buyer sees creates a cost (and value) expectation. Show the expensive item first. Subsequent products will look like a deal
4️⃣ The Power of ‘Free’
➡️ Consumers will often go for a “free” offer even when they don't need it. Bonus packs and ‘gift with purchase’ signal compelling value.
5️⃣ Present Bias
➡️ Humans tend to want rewards or value sooner. In the case of loyalty programs, members are more likely to forego a greater payoff in the future in favour of receiving a smaller reward sooner.
6️⃣ The Rule of 3
➡️ When given 3 options, most consumer will opt for the middle one. This is a subconscious Goldilocks principle: “Not too hot, not too cold just right.”
The above are general concepts. There are many more to choose from.
How Neuromarkting is best employed will depend on things like you business goals, competitive & environmental context, and ease of implementation.
Before employing Neuromarketing, marketers should undertake consumer and product analysis.
Consider the pre-roll category. Some stores carry up to 100 different SKUs.
This selection creates a Paradox of Choice. Your assortment should be culled.
To recommend the right product for your consumer (and the store), the budtender, menu and self-serve kiosk should leverage the Rule of 3 bias.
Sellers must recognize that humans are irrational and will make decisions that go against their best interest. The best way to influence consumers is to work with (and not fight) their biases and heuristics.
Call me. I help cannabis and hemp firms solve difficult strategic, cost & organizational problems and capitalize on growth opportunities.
#marketing #CX #neuromarketing #retail #behavioraleconomics #productassortment