Cannabis Business Metrics (Getting Started)
Any cannabis business can establish a data-centric culture and use metrics to support growth, promote team members, discover new opportunities, and more. This article helps you begin to explore the use of data in your cannabis business.
GETTING STARTED WITH DATA CAN BE EASY
Any cannabis business can establish a data-centric culture. Data is simply the recording of real-life behavior. It’s nothing to be afraid of and anyone can understand and use it if they want to. You just need to know what to record, have a method or process to record data, and a process to measure the data daily, weekly, and monthly.
The data needed to grow a successful dispensary will vary vastly from that of a manufacturer, cultivator, distributor, etc. In our Thursday articles we’re going to focus on the use of data by dispensaries and cannabis brands (though I could be persuaded to diverge if someone asked for something specific).
I <3 DATA
I’m a strong believer and advocate for an open data culture. To me, an open data culture means that every team member has access to Key Performance Indicator (KPI) data on a daily basis. KPI’s are the metrics that drive a business. KPI’s shift over time but they are the core growth/ success drivers the business is focused on.
Any business that intends to be around for a long-time will need to measure company KPIs over time. Universal business metrics/ KPIs include:
The use of a marketing channel to gain the attention of a potential customer and bring them to your business (online or offline)
Methods by which the potential customer interacts with the company and its value offering
When a potential customer converts into a paying customer (not a trial customer)
Continued engagement and transactions from an activated customer overtime
The acquisition of a potential new customer from a potential customer or activated customer
There are funnels that determine the success or failure of each of the business KPI’s above. Understanding these funnels, where they are strong, where they suck, and how they perform over time are vital to the success of any business.
DATA FACILITATES PROACTIVE COMMUNICATION
Pairing access to data with a process to review and measure it daily, weekly, and monthly is essential to reaching company milestones. Daily Reports are a great tool to help with proactive communication. Missed milestones are never a surprise if there is transparency via the data on a daily basis. When things are not going as well as hoped the data allows the team to see how ‘a part is meaningful to the whole’. It’s been my experience that the team comes together to support one another if numbers aren’t looking good in one area.
METRICS THAT MATTER ARE EVER CHANGING
The development of KPI’s and their corresponding activities is ever evolving. The more you review company data, the more you learn. Learning causes you to iterate on strategies which results in new KPI’s and new activities to measure. And, so goes the growth process on into infinity (or until you realize the business model is flawed, no one wants what you’re selling, or have an exit).
DATA CREATES A UNIFIED TEAM CULTURE
I believe it’s important to involve the team in the development of KPIs. There’s a huge difference in being told you have to achieve a certain goal versus having a hand in the conversation of what drives the company’s goals and what you are responsible for. Openness and conversation results in ownership. Ownership creates a team that’s aligned on what goals look like and what strategies to implement to ensure milestones are hit. Every person within the company will have their own KPIs that directly influence the company’s “north star” KPI. This means every team member has a direct hand in the success of the company and should be an active participant in the conversation. When goals are hit celebrate. At my first company we had a gong that we would ring. You’d be quietly working then gong. For people working remotely we’d chat the gong so they weren’t left out. It was fun to hear why someone rang the gong and to celebrate, as a team, the “mini” success. When goals are exceeded don’t forget to praise and reward your team(s). The business would be squat without them.
MAKE ME HAPPY. ASK A DATA QUESTION.
This sub-header might be a little silly but it’s honest. I love talking about and playing with data. If your cannabis business is ready to create a data-centric culture but you’re not sure where to start leave a comment or question. Otherwise, next Thursday we’ll start to break down the KPIs for team roles based on dispensary and cannabis brand north star metrics.
Until then be well!