How Weedmaps Could Be Hurting Your Business

What’s going on everyone? Brandon, back at it again with another video. And this video I’m gonna walk you through why Weedmaps could actually be hurting your business, especially in the long run. So in today’s digital, digital age, retailers are looking for ways to increase their online presence and to get more sales.

One of the most popular methods of achieving this is by running paid advertising campaigns via Weedmaps. There’s a lot of retailers that come to me and they, and when I talk to them about their existing marketing strategy, they are already using Weedmaps or they’re looking to use Weedmaps. So this video applies to most other paid advertising strategies and not just Weedmaps, this is just,the most common example that I see.

I’m gonna walk through some of the benefits and some of the disadvantages of using paid advertising strategies for retailers, at least in the long run. Now, the benefits of paid first things first. With any paid advertising strategy, you get faster visibility. So retailers can gain more visibility at the beginning and at a much faster rate because you just go ahead, you pay the company X amount of dollars and you bid for a specific amount of clicks or awareness or impression, and then you get the automatic placement, right? So unlike with word of mouth and, and with SEO that can take a long time to work, you immediately pay to get seen on multiple platforms.

This can help businesses reach more potential customers and improve their online presence. So where this is actually super useful is that if you just launch a new location, it makes sense for you to pay for Weedmaps or other paid advertising strategies because you get the immediate benefits of getting the awareness and showcasing where you are immediately, right? But as we’ll see, there are some disadvantages of using this for the long run because what you’ll typically see is that, okay, you run a paid advertising campaign, you’re receiving the ROI that you’re looking for, for every dollar that you get in, you’re getting X amount of dollars out that you’re happy with.

But then after that, the advertising continually gets more and more and more expensive and you haven’t started building up your brand. And if you don’t do that, then you’re gonna be at the mercy of these paid a of these,advertisers or of these advertising platforms because you won’t be able to make as much money for the amount of money that you’re putting in, right? The second one is that you’ll be able to have targeted reach based on what you’re searching for.

So paid advertising allows retailers to target their ideal customers based on demographics, interests, and behavior. And this targeting can result in a higher conversion rate and a better ROI for the business. So again, with the paid advertising, depending on what platform you are interested in using, typically they will have some sort of customer data set that says, Hey, our customers are of this age, this gender, they’re this interest, they are high buyer intent, they have high buyer intent, you know, whatever it is.

And you can typically target for these specific,modules or nodes of people based on the types of services that you offer. The third one is that you’re able to get measurable results. So paid advertising provides retailers with measure measurable results including impressions, clicks, and conversions.

And then this data can be used to optimize the ad campaign and improve overall performance. So I’m not gonna get into the whole like,funnel and analytics and all that stuff. I’m just gonna give you an overview in, in, in terms of how you would go about calculating if you’re receiving a positive ROI based on the numbers that you’re receiving.

So what you do, if you do and you run paid ads, let’s say weed match for example, when you spend $10,000 and the cost per click is a dollar 50, then you know that the shop page is then gonna end up getting 6,666 visitors. Then from there, if you know that you have a 5% conversion rate, you can then get 333 customers at, and then at a $50 card size, it’s going to be about $16,500, right? So by reverse engineering the process, you know that if you spend $10,000, you’re going to get $16,500 back or a little bit more than that, right? So you then know that if you want to make X amount dollars of sales, you then need to pay x amount in Weedmaps.

Now the thing is, is that while this is relatively straightforward, the colder and colder the audience that you’re trying to push to, the lower your conversion rate is going to be. So the example is that if you have a retail location and you want to target within a five mile radius, right, you’re gonna have a higher conversion rate because those customers are closer to your dispensary than everybody else.

But the problem is, is that within those five miles, you only have a certain number of people that you can reach. You’re gonna cap out at a certain number of people no matter how much money you spend. So what ends up happening is that you then need to spend more money to reach what would be referred to as a colder audience, meaning an audience that is less,relevant towards the service that you’re offering.

So what happens is that, okay, yes, you know, I can make,an extra $6,000 for every $10,000 that I spent $6,000 profit, right? If you want to then double this budget to $20,000, you are now spending money to reach a colder audience, meaning that the conversion rate of the people who would then be interested in your products are actually going to decrease.

So you’re not gonna make the same amount of money based on what you’re spending, right? So the thing is, is that while this makes sense, and this is measurable, you need to make sure, or you need to be aware of the scalability of the existing campaign that you’re using. And this is something that a lot of people, well, a lot of people don’t even take a look at the conversions in the first place, but this is something that you need to consider.

Cuz you can’t just say, Hey, I spent $10,000 and I made X amount back and I’m gonna spend a hundred thousand dollars and make the same amount back. Typically, the amount you’re gonna make, you’re gonna make back is a lot less. The nextpoint is that you have a lot of flexibility though. So paid advertising allows retailers to be relatively flexible with your advertising strategy.

Then you can adjust your ad campaign based on the performance and the changing business needs, right? So if you do a grand opening launch, you probably wanna spend a little bit more money so you get as much awareness as possible of the people around your location, right? And then as you continue moving forward in the journey of trying to sell as much product as possible, you will then need to adjust your, your ad ad strategy based on the income that’s coming in, you know, moving forward, right? So now here’s some of the disadvantages to, to the paid ads.

Now, one of the biggest problems with paid ads is their cost. Running paid ads ad campaigns can quickly become expensive, especially if you’re targeting competitive keywords or high traffic websites. This can make things difficult for retailers or startups to compete with larger companies with bigger budgets.

So typically this is the trend in terms of traffic, in terms of cost, and in terms of the result for PPC versus seo. So PPC is,pay per click. This is typically used in the the Google ad sense, but again, this is just general paid ad strategy. Weedmaps is just one of the strategies. This could be relevant for anything else, right? So you get the quicker result here, right? Because you’re immediately paying for it, right? And, but over time it’s the exact same thing.

It’s linear, probably even decreases a little bit, right?it decreases because you know, your ads are just hitting the same people over and over and over again, right? But what we want to do for SEO or word of mouth growth is that the result, there’s minimal results at the beginning, right? But then over time, right? As your website gains authority, as your website gains credibility within Google and within the eyes of your actual customers, you’re gonna see an increase in traffic that compounds over time because you are now driving people to your website that are interested and that have a predisposition to buy from your company and not just from an ad that pops up, right?the second term, the second,, the second point is that,paid ads provide short term results, right? So along this same point, and in this same graph, it means that once you stop paying for the ads, the traffic to your website will decline.

This makes paid ads an unsustainable strategy for achieving long-term growth, right? Because again, paid ads will only get more and more expensive over time. If your competition stays sustained, you need to pay more for the exact same amount of reach because your capping out at the audience that you’re targeting, right? But we know in the dispensary space that retailers are, the retailer market is only going to get more and more competitive, right? Especially as things get more and more legal.

So with more competition, you’re gonna have more people bidding for these competitive keywords. When you have people bidding for the competitive keywords on these websites, then you’re gonna have to pay more money because it’s just a supply and demand thing, right? And the,ad companies are just going to request more and more money, right? The third thing is then customer data, right? So with more customers entering the space every day, customer data becomes even more crucial.

So whether it’s seeing how people interact with your website, driving them to your loyalty program, or even adding them to your email list, it’s incredibly important that you use your most important asset and that is your customer data. And by using Weedmaps or any other third party, it could be Leafly or whatever it is, you don’t get the same level level of customer data that you would if you would have your customers go directly to your website.

Therefore, you actually decrease customer lifetime value, reduce,resulting in you making less money. So when you get a customer, that customer isn’t, you know, isn’t just a one-time payment and then they leave unless you’re more so like in the tourist areas and even then they’re just gonna come back, you know, next year, right? So what you want to do is you want to ensure that whenever you get a purchase from your dispensary, you want to make sure that you can utilize your customer data to ensure that they either purchase more frequently or they purchase for a longer period of time.

At some point, you know, a customer will stop purchasing at your dispensary for whatever reason, right? But you want to ensure that you increase the lifetime value as best as possible. So when you drive people to loyalty, I just did a video on this about,customers going to your loyalty programs and how after 12 months,the loyalty customers actually make up like 70% of purchases or something like that, right? When you use paid ads and you just use these systems that drive people to these websites to make a purchase on that platform, you don’t get that customer data.

You don’t get which customers go to which,website. You don’t get,which pages on your website. You don’t get to then add them to your email list, which then allows you to then send them promotional emails at any given period of time. Again, increasing the lifetime value even more, you don’t get any of that stuff right? Because with paid advertising you do get this short term quick result, which I think is good.

Like you need some sort of traffic at the beginning to be able to,you know, provide proof of concept to say, okay, yes, this dispensary is like a good idea cuz you need money coming in, in the short term, but over time you want to ensure that you can either decrease the amount of money that you paid, that you paid for, paid, or even just eliminate it completely and then just use that into building your brand and becoming the, the best dispensary in your city.

I always call it, you wanna be city famous, that’s all you need to do. If you become the number one dispensary in your city, then you’re doing very, very well. The next one is competition. Just by looking here, I want you to see the difference between if you rank on Google and if you rank on weed maps, right? So you can see here that with weed maps, it is a dispensary or a retailer platform to showcase all retailers and everything that’s going on, right? So you have three areas where people are advertising where you should be.

You have this left side, you have this middle side, and then you have even discounts. So you have all of these businesses here trying to compete for the eyes of retailers and seeing what’s going on, right? Then you can see here, you can,organize by best of weed maps, medical, recreational, like this is a dispensary directory, right? And ultimately what’s going to happen is that the people who come from weed maps are looking for the best deals you can see here, get 20%, 26% off your first order.

So if my business is here and my customers are seeing all these other competitors and looking at all these different things, my eyeballs are just going everywhere, right? Versus on Google, you can see in the top listings there’s a lot less competition, right? So if you can crack the code to ranking higher on Google, you’re going to get a lot, lot more eyeballs based on the money that you’re putting in to build your brand and to build up your seo.

Versus with this, depending on what your location, you’re probably spending thousands of dollars a month. And what ends up happening is that when you stop spending that money, you immediately disappear. Right? And again, this is just gonna get more and more expensive for the same level of efficacy because more and more retailers are gonna pop up and start wanting to advertise on Weedmaps.

So you can see this is like a negative feedback loop for your business. And again, I’m not saying that you shouldn’t use Weedmaps at all. I’m saying that you need to ensure that you have other marketing strategies available or other marketing channels that you’re focusing on so that you can get people coming back into your door and ensuring that you can do things like driving them to loyalty or getting them to sign up for email programs or whatever it is.

Because if you go here and you’re going on Weedmaps, all I’m really doing is like, okay, where can I just find the best deal on whatever dispensary that I’m looking for, right? So you just need to be aware that this is the case and not just shoot yourself in the foot and next thing you know, four years later, you’ve only spent all of your money on we UMass, but haven’t built up a brand so that it can be sustainable without using paid advertising.

Now, to quickly summarize, right? Here are the benefits, here are the disadvantages. One, you have faster visibility. Two, you have targeted reach because these platforms allow you to target based on specific demographics, you’re allowed to also do different types of advertising, right? So you can pay for this, you can pay for this, you can pay for banner ads, you can pay for whichever one you think would be most effective for your business, right? The third one is measurable results.

So when going back up here, right? You could go and calculate, okay, I’m spending this amount with weed maps, I’m getting this amount of money because I’m spending this amount of money and I’m getting a positive return. I can continue spending money. But again, you have to ensure that you don’t fall into the trap of saying, okay, if I’m making a two x three x roi, I’m now gonna spend 10 times more money and still make that same roi.

That’s not how it works because with paid ads, you are now marketing to a colder and colder audience every single time, which gets more and more expensive. The fourth one then is also flexibility, right? You know, if you have changes in budget and whatever you need to do, you have the flexibility to change your ad spend depending on what you know on the different things, right? Whereas if you get like a, I don’t know, a billboard, you have to spend all that money all at once and then that’s it, right? So,these are the four benefits of using paid ads and with Weedmaps.

And then the disadvantages, again, it’s cost short term nature, you don’t get your customer data and there’s tons and tons of competition coming through the door. So,that’s it for me for today.as normal, if you want to double your dispensary sales and you want to talk about anything that I spoke about in this video one, you can either download our marketing checklist and guide the links below, or you can just schedule a free one-on-one for fast results and a more custom marketing strategy specific to, to your dispensary.

But like I said, that’s it for me today and I’ll talk to you guys later. Thanks.