Your Dispensary Promotion Last Month Looked Good. Did It Actually Make Money?

{Chapter: Stream Setup

Jake: Livestream. One second while we connect everything. Almost there. I usually joke about satellite uplink, but in fact, I am on Starlink right now, so it is an actual satellite uplink. Okay, great. We are live now.

Chapter: Welcome and Guest Introduction

Jake: Hello, everyone. Welcome to another episode of Cannabis Marketing Live. I am your host, Jake Litke, CEO at MediaJel, and today we have Dina Nagib with us. We are going to be talking about retail promotions and POS data, which is something that I spend a lot of time in on the digital side when we're doing activations programmatically. Welcome, Dina, thank you for taking the time. How are you today?

Dina Nagib: I'm good, Jake. Thank you so much for having me.

Jake: And I appreciate you joining on your cross-country. Adventure, you're mid, are you about midway through now?

Dina Nagib: Well, so I cheated. I started in Chicago, and I'm in St. Louis, so the first day was pretty short, but.

Jake: Oh, yeah.

Dina Nagib: Nice to.

Jake: Alright. Well, I'd like to start off the conversation always by asking how you found yourself in the cannabis space. I know you've got a background in pharmaceutical, and there's definitely some overlap in that VIN diagram. So, how did that… Transition happen for you.

Chapter: How Dina Got Into Cannabis

Dina Nagib: Yeah, it's, I mean, quite a story. I'll try to keep it short. So I worked in pharmaceuticals for 15 years, and when I started, I was running basically the dispensary for the company that I was working for. And then about halfway through my tenure, I started developing software for the operation. So, handling inventory management, quality control. highly regulated environment and the entire time I was a closeted cannabis consumer. I also held the DEA substance license. So there were a lot of. That's tricky. A lot of interesting things going on. Emphasis on the closeted cannabis consumer. But yeah, I was, you know, working for in pharmaceuticals, making medicines, and also really finding benefits from this amazing plant medicine. And I grew up in Chicago, and my brother was very involved with the legislation reform in Illinois. And so he did some work consulting when they opened various license applications and I worked with him a little bit during that time. Then in 2019, I left pharmaceuticals and biotech and I decided to come into cannabis to really bring the knowledge that I gained in pharmaceuticals and try to make the industry more reputable. Started working for some of the software companies, and then learned from there, some of the challenges in the industry, and what operators really need help with, and that's why I started Grass Goddess Consulting.

Chapter: Starting Grass Goddess Consulting

Jake: Yeah, so let's talk about that. Grass Goddess Consulting, that was… did you start that in 2019?

Dina Nagib: No, I, worked for a couple software companies, and then it was, like, 2022, 2023 that I really, started consulting.

Jake: That's great. And did you take those… it sounds like there's maybe a natural progression of working with those software systems and then trying to help people use them more effectively and efficiently, is that… Kind of how that went.

Dina Nagib: Absolutely. What I saw was that people that were operating dispensaries didn't really understand the things that were important when they were selecting the software first. And so that was causing them to make decisions that were not setting them up for success. And then also once they selected the software, implementing it in the right way, implementing data and analytics to grow their business. These were all things that I saw when I was working at the software companies that weren't really working well, and so I thought at that point I could better serve the industry by helping operators, with those things.

Jake: Yah. Yeah, I'm not, you know, I haven't been in the room with those decisions, but I have been building software for many decades now at this point.

Chapter: Choosing the Right POS Software

Jake: And it seems like a lot of, a lot of customers will get enamored with, really, a couple of features that they think that they like, and more specifically, maybe some fancy charts that are like, oh, those are really neat and pretty, so this is probably the right solution. But people don't really think about what they're gonna use it for, and some of the edge cases. Like, an example on the e-commerce side that we run into sometimes. Is that some e-commerce platforms, like, don't allow you to make the URL take you to a promotion. Right? That just doesn't exist. You can't have a deep link to, like, you want to run a campaign, oh, hey, it's 30% off new customer, but if you run an ad and someone clicks on it, you can't take them to somewhere where that is already applied to their cart. and then you're trying to get them to remember a discount code, and that whole… that just creates a lot of friction, right? I'm using that as an example. How do you… Well, I would assume that most people that you work with today already have something in place, right? So, people are going to come to you because they need help, or they want your, you know, expertise on executing programs. I'm kind of skipping ahead, but I imagine that must make your job difficult sometimes, because you have to work within the constraints of the system that they have. getting someone to switch systems can be very challenging, and sometimes isn't even worth it, right? Like, because the incremental gain on some additional feature you have is not worth the switching cost of not just the Numerical costs, but retraining and all of those other things. so… How do you deal with that?

Dina Nagib: Yeah, absolutely, Jake. It's much easier if I can start with an operator before they've opened, understand their needs, get them, you know, the best software for what they're looking to do. But it does not always happen that way. And you are completely correct that it doesn't always make sense to switch software. But that is one of the first things that I look at. Is that something will benefit the operator because if it is that's one of the things that you just have to rip the Band-Aid off and do it and because of my background in pharmaceuticals I handled millions of data points every single day and the thing that that I had to make sure in the operation was that if we had humans running the operation But a mistake could not go out the door because it takes 10 years for a drug to get to the market. And I was the first step in the process. So if we made a mistake, we could kill a drug from getting to the market. So what I learned is that data integrity is paramount and coming up with processes to make sure that the data is completely protected. So if somebody needs to switch software. then I come in and I make sure that I have an eye on their data through every step in the process so that we get as much of it into the new system as we possibly can and then once we get it in there we make sure that everything's set up properly. There are some other things that you can do as far as like historical data and setting it up with a dashboard to Make sure that you still have access to that as well. So that's one of the things that definitely I take a look at first. I do, I will say I have a number of clients that are on point of sale software that I don't necessarily recommend to people, but I also don't necessarily recommend that they switch off of it. It's working fine for them. We, you know, just keep them going. But I do want to make one other point just because I think it's really important that when people are thinking about the software, also think about the company, you know, the, the functionality and what the software can do and making sure it meets all of your needs if you're handling delivery or, you know, whatever it may be. But think about the company as well, because as you're growing your business, is this company going to grow with you? Are they going to continue to exist in this crazy changing cannabis space? So yeah, there's kind of a lot going on there.

Jake: There's a lot. I mean, we have a similar… we run into situations where… people have chosen web platforms that are not ideal for a variety of reasons, even… even simple performance issues. Like, you know, if… most WordPress sites are not fast. There are ways to optimize it, and you can always tweak the software, but… people don't really think about the fact that if your website takes more than 3 seconds to load, that's gonna dramatically impact both your organic and paid campaigns, like, all of those things, right? And you end up in a situation where We've worked with people where it's like, well Ideally, you would rebuild your website on a different platform, but this is what we have to work with, and we'll, you know, sort of make the best of it.

Chapter: Promotional Margin and the Cost Data Problem

Jake: Okay, so let's actually get into the premise here, which is talking about promotions and promotional margin, which is something that we deal with a lot at our company, because we're running advertising, and the easiest lever for people to reach for is offers right now. Whether you want it to be or not, it's gonna be some 20, 25, 30% off, whatever that offer is. And then we calculate on the advertising side, we calculate how much money did you spend on the campaign, and how much revenue did that generate. But that, in and of itself, is a little bit of a naive number, because you need to think about what was your discount? What was your cost of goods? What other marketing channels were involved? Did you send out a text blast? What did that cost? Did you send out emails? How much does that cost? So I know how I… how we tend to look at it, but I… I'd love to hear from your perspective how you think about promotional dollars and discounts and… and how people can really understand the efficacy of what they're doing.

Dina Nagib: Yeah it's challenging for sure and I think the first thing that I want to say about it is the importance of having cost information in your point of sale to begin with because that's something that I come across a lot of times that the cost information isn't in there or it's inaccurate and that really gets you to a starting point where you're not going to be able to do anything as far as figuring out your margins and how much money you're actually making. So, so that's the first thing. And then a lot of times the promotions that are being done right now at dispensaries are, are being handled between the dispensary and the brand with a vendor credit. So you know they get a credit on a future order and that is going to change the price of or the cost of ultimately those items coming in. So how are you indicating that in the point of sale system? Most people that I encounter are not indicating it in any way at all. So it's not being tracked and it's not you're then if you are putting the cost information in for the new products that are coming in with that vendor credit, are you doing it based on the credit being applied or not applied? So is it going to the new products? Is it not being accounted for at all? It's just really not handled at And that's the way that most people are doing these promotions right now. So that's honestly the biggest thing that I encounter and one of the things that I try to solve for with the clients that I'm working with.

Chapter: Building the Verdant Strategies Dashboard

Jake: So, how do you… how do you solve for that? Like, what is… what is a real-world example? Like, they obviously don't use anyone's names, but, like, can you give us a use case where you walked in, you looked at someone, what they were doing, and said, hey. you don't understand your numbers correctly, and you need to, first, understand the real numbers, and then, second, make some sort of pivot. Where do you turn the dial?

Dina Nagib: Yeah, so the way that I'm handling it right now is outside of the point of sale system, and I recently built a dashboard with Verdant Strategies that gives insights into the retailer's data, and it takes the point of sale data, sales transactions, inventory data into a custom database and dashboard, and then we can add in other data sources as well. So that promotional information, we can add in, financial information from QuickBooks, there's, you know, a variety of, a variety of things that we can do. I also think that that's, a prudent way for people to operate right now, because if you do switch point of sale systems, you can keep that dashboard and plug in the new point of sale data. And then you have some consistency in this industry where there is so much change. And I think ultimately everybody should expect that they are going to have to change their point of sale system at some point. So, right now, I don't know any software that is handling it well, none of the ones that I work with, and so it is, it's, it's handled in a bespoke manner.

Jake: Okay. And, just for… so everyone knows, what is Verdant Solutions?

Dina Nagib: Yeah, Verdant Strategies is a financial, it's a financial services CPA firm run by Rachel Wright, who's been in the industry for more than 15 years, and work with over 600 operators in the industry, brands, retailers, ancillary companies, and Really what we're doing with the retail insights dashboard is we're taking Rachel's experience, what she advises her clients, and we're building that into the metrics and KPIs in the dashboard so that we're taking the data that each client has and then using our experience to really give them the best insights into that data.

Jake: Okay. And that just requires, like, an API key into the POS or e-com platform to pull it in the dashboard?

Dina Nagib: Yes, it could be an API key. I will say that cannabis is fun and that's not always realistic. With the companies that I've worked with so far, it's really a wide variety if you can get an API key, if you can get good documentation, get to the data endpoints that you're looking for. It is one of the ways that we're doing it, but I have also implemented an automated file handling process so that we use the functionality that a lot of the software has to email reports to a bot that then takes the files and processes them into the database. It's not, like, a real-time data connection like an API, but, we can automate it, and… I very firmly believe in keeping it simple, and if we're not where we need to be yet, we just… we do what we can.

Jake: Yeah, we deal with the same thing. APIs are nice when they're available, and when they work, and when they, are documented, and don't change, and all of those lovely things. We do still have people that email us reports every week from whatever system they're using, and then those have to be ingested, whether it's… PDF, or the good old standby CSV files. Yeah, I always…

Dina Nagib: I'm on a CSV file.

Jake: CSV file. And, you know, you can do… You can do a lot with the CSV file with AI now, also. Things that would have been… Would have taken a bunch of technical people a bunch of time, can kick out some pretty interesting analytics quickly.

Dina Nagib: Absolutely.

Chapter: Identifying Negative Margin

Jake: Okay, so, Let's go back to the use case. We've identified that someone doesn't understand that they're losing money, maybe. I'm sure you run into that. You've got someone who's like, oh, yeah, I need help making more margin. And you come in and say, well, actually, you're making negative margin. You need to get to not losing money first. Is that a pretty frequent occurrence?

Dina Nagib: Absolutely. I was just looking at some of that data last week.

Jake: Okay. And, how do people react to that? I imagine the reactions are varied, but, Are people pretty, like… open to, like, okay, now I understand this, how do we fix it?

Dina Nagib: Yeah, absolutely. Reactions are mixed. Ego is going to come into play some of the time. But I do think that a lot of people in this industry are just trying to do their best, and they recognize that, you know, they don't maybe know exactly what to do. So, yeah, I do think a lot of people ultimately once they see it. And my favorite thing is that with data, you can prove everything. So, you know, you don't believe me, I'm going to prove it to you with the data that we're going to generate. So yeah, it's definitely get a lot of different sort of reactions. But overall, I think once people see it, the proof is in the pudding. They're on board.

Chapter: The Client Engagement Timeline

Jake: Yeah, that makes sense. Okay, so… Let's, walk me through… what an engagement looks like, from sort of… I kind of… I'm sorry, I jump around a lot, but I'll try to… I'll try to get some discipline here. We… you… you on… you start a new relationship with a retail operator. It could be an individual operator, it could be an MSO, right? I'm sure you deal with a variety of sizes. What is… what are the sequence of events? What does that timeline look like from day one to… where you get to, I guess, kind of success MVP of, like, you've done the analysis, you've made changes, we're now in a better state. What is that? Timeline and sequence look like.

Dina Nagib: Yeah so the first thing I do when I start working with someone is a free assessment. I take a look at their software, at their data, at you know people, their processes, workflows, and see just sort of holistically how everything's working. Definitely the first thing that we figure out is, do we need to switch the point of sale system? And if that's the case, then we go down that road and figure out which is the best one. I help people through that, and then we'll go from there.

Jake: You help them with the onboarding process of a new POS?

Dina Nagib: I do. Yeah. So it's. You know, it varies. Just like we were saying with API connections, onboarding really varies with a lot of the software companies, how much support they're going to give you. Some of them have some white glove options, but I, you know, will do that as well. And then protecting their data is, you know, the most important part of that. But one of my core operating principles is operating with grace. Change is hard. So, I do just. Support people through the human part of it as well. And. Yeah, so then once we get through that part, then it's taking a look at the data and the structure of the data. I think We're maybe going to talk about it some more, but naming conventions, making sure that those have been implemented. I will say.

Chapter: Naming Conventions and Data Structure

Jake: Let's just talk about naming conventions now, since you've brought it up. We have problems with naming conventions because people make up their own names for products, and then it's hard to understand when you're looking at a promotion, like, which brands are selling based on which brand was promoted, but how does it… How does it come into play in your world, the naming convention part?

Dina Nagib: Yeah, and I will say, I mean, I don't know what your experience is like, but from what I've found, it, It's so much better than when I entered the industry in 2019, 2020. At that point, it really, I would say the data was just all over the place. And I think at this point with the software companies and with the operators, they understand, most of them understand to a certain extent that the importance of naming conventions. And I think I think, you know, it makes sense for all of the products, but I think edibles is a really good example because having the package size, the dosage, all of that information so that, you know, because there's an edible that is very similar that has a slightly different dosage and maybe you have an image that shows you, you know, the difference on your menu, but it's important for your data, but also for your customer to be able to understand your inventory. So, I think that, you know. It's definitely a lot better, than it was before, but if there… if there's any operator that's listening to this, and they don't have a naming convention. Definitely figure one out and get that implemented because that's how you're going to keep your data usable and unfragmented as you move forward.

Jake: What's an example of a scenario that you run into where naming conventions were specifically creating a problem that resulted in loss of margin, loss of revenue. Some… I don't know what that scenario looks like, but obviously, just being able to do reporting, you wanted a good naming convention, but I'm curious if you've got a scenario which you can anonymize, where you looked at what someone was doing, and the fact that they didn't have naming convention set up, it was resulting in some sort of negative Like, identifiable outcome.

Dina Nagib: I'm not sure that I have one, an example of that exactly. I will say I am working with a client that is in a state that's not deli style and they don't have the exact like package information in the name and it's… It's causing an issue. All the information you need is still in the data. So it's something that we're able to handle. It's not a blocker in this case. But yeah, what does the menu look like? What is the customer experiencing? I think that's… That's the bigger issue from my perspective. But yeah, I'm always thinking about the long term and like, you know, years from now, am I going to be able to use the entire set of data that I have in my database or is there stuff in the past that is going to have issues that just is, you know.

Jake: Yeah, okay.

Dina Nagib: Yeah, sorry.

Jake: And some of those costs are, can be very non-obvious, right? So naming conventions is something that is important for our business. We run hundreds of marketing campaigns simultaneously, understanding which one is which, what it's trying to do. You really do need naming conventions for that and, and that cost. to the organization can come in some non-obvious ways. One is obviously just operating efficiency. do you have people spending time trying to cross-reference things, ask people questions, like, all of that costs time, right? You have staff, their, you know, their hours cost the company time, both in hard costs, and also when you have people who have valuable expertise, and they're spending time doing copy-paste work and validating stuff in spreadsheets, that's time they could be spending doing something else that would be better… better serving the business, right? So… That's, you know… like, that stuff's kind of difficult to measure. We've gone through some exercises like that in the past, and looking at Basically, program sizes and, like, budgets, and looking at, okay, well. it takes just X amount of time to run a campaign. Like, period. At a minimum. And… the… and that turns into an operational cost, and then if you're… if you have a campaign size, it's kind of like discounting or something, or unit costs inside of retail, where you're like, well, yeah, we can put this on the shelf, but the margin is so low that it doesn't actually make sense to carry this product in its current… the way it's priced currently.

Dina Nagib: Yeah, okay.

Jake: So, yeah. Alright, went on a tangent there about naming conventions. What we were talking about was, the engagement, the sequence, right? So, naming conventions, look at that. Look at the POS. is it… is it suitable enough? Can we make a switch? Okay, we've answered that question. Now we look at naming conventions, and we've all… we've also covered, like, the data, making sure you're maintaining it, keeping it in a safe place. Ideally, not, like. emailing customer lists out to people, which sometimes people do, and I said, please don't email us your customer list. We do not want the PII. Okay, what's… what's next in the… In the playbook.

Chapter: The Dashboard and Inventory Health Check

Dina Nagib: Yeah, so I think once you have the right systems in place, the data structured properly, then it's starting to try to get some insights out of your data, looking at those margins, seeing are you, you know, sort of around traditional margins or, you know, are you, negative or, you know, and then I think that's also one of the places where we implement the dashboard, the retail insights dashboard that I built with Verdant because then you can really look at everything. We have a full inventory health check, which will show you each of your SKUs, if it's healthy, if it's understocked, if it's overstocked, and then along with that show you the margins and the cogs and all of that information so you can see oh this skew isn't really moving very well and my margins aren't great and it's really overstocked maybe I need to do something and get this out of my inventory completely so it's really the inventory assortment is one of the most important things. I've worked with dispensaries that are not you know huge operations and have half a million dollars sitting on their shelves in inventory so it's you know looking at that are all of those skews moving do you have you know 10 different versions of blue dream vapes and you know people don't really need that many options so taking a look at at all of those Details of your inventory, and then your sales transactions as well.

Jake: Okay. And… Similar question as before, now that we're at that. Whatever that is, phase 5 or 4, what… This part, we're talking about inventory. And yeah, if you're holding half a million dollars in inventory, you're basically acting like a bank for the brands at that point. You're extending credit because you're holding that. And those, again, they're dollars that could be doing different things rather than sitting on the shelf. They could be used for promotions. They could be used for really a variety of things. What are some… highlight examples of… Companies you've worked with where you've gotten to that phase, and you've identified these, like, major inefficiencies, and… They were, let's say they were agreeable to change, which I know not everyone is, let's say in this instance they were agreeable to change. What are some outcomes for those companies that you are able to see to fruition? Like, their margin went up by some amount, or sales velo- like, just any sort of key business metric where you got to say, like, okay, look, look at how well that worked.

Dina Nagib: Yeah, so this one client actually that had half a million dollars sitting on his shelves. So we started to trim down the inventory and he used some promotions to get rid of some items. One of the things that he said was anecdotally sort of his gut feeling was that if his inventory got below a certain level, then his basket size started to go down. Which I believe him. I mean, I think there is, you know, a tipping point where maybe you don't have the right assortment to get people to, to fully buy what they would if you, if you had the proper inventory. But we've now cut his inventory amount in, I think it's more than half. I think he's under a quarter million now. And he's also in an interesting area, it's, like, kind of a college area, and so the summer, there tends to be a little bit of a dip, and I actually haven't talked to him yet, so I don't have, like, all of the, sort of, you know, qualitative information. But his revenue and his basket size has been going up in June and significantly. So I think that, you know, we think certain things and it's not necessarily that we're wrong, but it might be that when he, you know, cut his inventory before he didn't do it in the right way and so he didn't have the proper assortment and that was what it was. It isn't. you know, totally the amount. So, that was… That was pretty interesting.

Jake: Well, having the data that you provide can allow someone to do that effectively, right? Because if you don't really have a handle on, you know, product velocity and other things, and you just say, oh, I shouldn't be holding so much product, and you just be like, well, let's just have less of everything. that is gonna result in some, like, undesired outcomes. But if you actually have access to information, be like, well. these 20% of the SKUs really move slowly, and you've got a bunch of them, right? So, you can bring your overall dollars that you're banking down. in these areas without impacting. And then in theory. that frees up capital to do other things, like other promotions, or whatever, to hire another person to, you know, give better service. It could be… make improvements to the store. Could be anything, right? Which can all drive sales. Okay.

Chapter: Promotion Best Practices and Common Mistakes

Jake: Let's talk about promotions. we've done a whole series on this, we've talked to a bunch of different people, everything from discount by state, right, because that varies wildly. Missouri is the lowest in the country, Washington, you know, Oregon or Colorado are high, just because they're more mature markets. You've looked at a lot of data. If you were to go to a dispensary owner and say. here are some learnings and best practices and tips for how you should approach promotions based on the knowledge that you have. What would you What would be your, sort of, elevator, cliff notes, like, if, you know, some guidance.

Dina Nagib: Yes. So, I think the promotion that really drives me the most crazy, and we had Headset actually come out with some data recently, and my friend Sandra Bergman, posted about it, but… The first time customer discount is horrible. It just like, okay, maybe you do a little bit of a discount, but give them an additional discount when they come back for more visits to get that customer in your shop. I live in San Diego and the number of shops around that do a 50% off first time discount and then people are just teaching them to to hop around and get that discount from different stores, that is the one that drives me absolutely bonkers. I don't think there is any data that suggests that that is… you know, something that is helping anybody's bottom line. Umm. The other thing that I think people really need to try to stop doing is promotions just because the store down the street is doing something and you want to beat them. Because what they're doing and how they're running that promotion, you don't necessarily have the same situation or aren't doing the same things and it's just creating this race to the bottom, and it's… so those are kind of my, like, top two things when it comes to promotions.

Chapter: Escaping the Discount Death Spiral

Jake: Yeah, so, first-time offers, not a good idea. FOMO, also not a good idea. No, I mean, those are two crux issues, though, that are difficult. Like, we've had a lot of conversations about this in particular. It is hard as an operator to be like, you know, they're selling the same product down the street for a lower price. How do we get out of this, like, discount death spiral that everyone's in? You know, we talked to a… dispensary marketing person that was in, I think, Maryland. And they took an approach of they're just not going to do it. They're like, we're not going to discount. We're just going to be more expensive. And they really, really focused on customer experience and building a strong loyalty program and building an experience that people want to keep coming back to more than they want to save $5. That's easier said than done, because executing great customer service is… is hard. It requires training, diligence, and consistency. And that's a lot more work than just… discounting something 20%. Similar… similar to when we talk about promotions on, like, text blasts. you know, a lot of companies really like the text blast button, because you push it, and people come in, right? Like, that is true. It is a… you will get a non-zero more additional sales. However. you're also alienating some number of your customers over the long term, right? So you… it's, It's difficult as an operator, I, I, I. It's hard to be put in that decision-making place.

Chapter: When Clients Take (and Don't Take) the Advice

Jake: Alright, so… Back to your onboarding sequence. You've now got someone to the point where they either have the right POS, or we've built some process around the POS that they have to get the best out of it. We've talked about data controls. But yeah. The promos thing… How often… do people take your advice, though? Because we do marketing, and we sometimes have… we give people, like, advice, and say, like, this… you're doing something that we've seen people do many, many times, and does not have a long-term positive outcome for you. And some pe… sometimes that is received well, other times it is not. There's usually… When people are not receptive. those relationships don't also last that long, right? Because you get into a point where it's like, well. We're helping you do marketing. But we're not taking your advice and then we're also not happy with the outcome. Right. How often do you run into that, and do you have any tips for me on how I can get people to listen to numbers that are clearly… Sustainable.

Dina Nagib: Ugh, and vice versa, Jake. I mean, yeah, I… I feel that really hard. It's true. And I do think it's a challenging thing because ultimately. you know, these operators, they're like, I'm the one that's doing this. I'm the one that's, you know, seeing things day in and day out. So there is sort of this like, why should I listen to you? And I think ultimately, I just try to go back to the data and tell them that I and I have this in my sort of, like, project plan overview. It's, you know, a few steps, and the last one is, I'm going to prove my value with data. So it's… I don't think I do have great good advice other than, you know, just trying to to lean back on that. But there are definitely people that I can't get. To the point where we can even have the data to try to prove them wrong.

Jake: Yeah. Well, and that's fine. You know, not, not everyone, not all companies and service providers are fit. I mean, ultimately we are not the ones running the dispensaries and we're not the ones that are managing all of the difficulty that comes with that. Our, you know, our, our position is, is to help people find. Success, to the extent that we can, and sometimes Sometimes it doesn't work out that way.

Chapter: The Established Relationship and Operational Consulting

Jake: Alright, so… Once you get someone onboarded, and things are running, and you're… you've got your sort of learning flywheel going of now the data is being processed, you have a dashboard, you can act on it, you can conduct experiments and see what the outcomes are. Let's talk about that phase, that sort of, like, established position. They've got your dashboard now, they can actually see what's going on, you can see what's going on, you can give them some advice on how to work with that data. What does a relationship look like at that point?

Dina Nagib: Yeah, so one of the cool things that we're doing with the Retail Insights project at Verdant is we're… there's the dashboard subscription, but then we're also offering an operational consulting service. And that's something that I don't do. We have people that have worked in dispensaries before, have extensive experience that come in, they sit with our clients data and then deliver insights to them. So that's been really exciting. And what we've been doing is for the inventory assortment, for example, when we're taking a look at the SKUs. will give them like these are the ones you should absolutely cut and these are the ones that maybe you want to try cut some of them play around with them exactly what you're talking about the experimentation now that we have good insight into what the data is doing we can try these things and see whether it works or not so yeah that has been really cool and I think that It's nice that we can have… I'm a data person, I can make sure that the data's correct and all of these things, but to have somebody that can really come in and speak their language and give them the insights from the data is super valuable.

Jake: Yeah. That's, that's the fun part. Now what in your world, what is the. timeline cycle of experimentation and results, and then moving on to the next. I mean, when we're running digital ads, like, when you start… when we start someone off from the very beginning. it's usually really, like, 60 to 90 days before we have enough data on campaigns to start turning dials and figuring out exactly who the real audience is that they should be targeting. We get a lot of… Advertisers that come to us and have some. some misconceptions that are… seem intuitively correct, right? Like, oh, our customer is college students, right? Because they're in a college town. However, when we actually start running the media. we've… and we figure out where people are engaging, what's actually driving online sales. We're like, yes, you do have that as a customer base, but there's also this other customer base, which is, like, families, you know, heads of families, or whatever it is. that are maybe counterintuitive. They're coming into your store, you're not really noticing that they're there, but it's actually your biggest growth area. Right? And that takes some time to figure that out. Once someone's up and running, we can run faster experiments, and we can run things like, oh, let's try this this month, and let's turn that on, and let's change the creative this way, or change promotions. In practice for you with your clients, what is the cycle time on an experiment?

Chapter: Experimentation Cycle Time and the Bundling Example

Dina Nagib: Yeah, I mean, when we're looking at the inventory and sort of getting that assortment right, you really ideally don't want to have inventory on hand for more than 30 days, even, you know, a couple weeks to 30 days is ideal. So within a month, you should be able to get some data and test a lot of these things. There are some, you know, variances with product categories, you know, flower versus like topicals and, you know, those are going to take longer to understand the data because they just tend to sit around for longer. But yeah, if it's one of the products that, you know, is moving pretty quickly, then Yeah, within a month.

Jake: Within a month, you can know. So that's a pretty quick cycle time do you have… I keep… I'm sorry to put you on the spot, I always just like examples, but, are there some… Some examples of, now that you're up and running, you've got the machine going, like, some of your favorite, even if it's semi-anecdotal. We made this change, and it was… you had the one about the inventory, we brought the inventory down, but on the actual, like, promotion side, looking at margins, like, do you have some examples of where you identified a scenario, and you said you should change The pricing or the frequency or something and someone's margin changed in in a in a positive way.

Dina Nagib: Yeah, I'm trying to think some of the details, but it was around the example that I'm thinking is around using promotions to increase the cart size. So typically, you know, I think that this is pretty standard with a lot of operators that they use promotions to deal with aged product and you know getting rid of things that are going to expire and that's fine but thinking about it from the perspective of like bundling and getting those sort of behaviors so there was some interesting things around that we recommended around sort of how to handle the promotions and doing it with like More of like a bundling than just sort of, you know, throwing them a pre-roll or whatever it may be. I don't know that I've seen all the data on how that actually shook out yet, but I thought it was really interesting and something that I think people overall could benefit from.

Jake: Okay. Great. Thank you.

Chapter: Who Sees the Dashboard

Jake: All right, let's see here. So now we've got, we're… what am I… because I don't… I'm not in your business, I'm asking you questions based on what I think is happening, but what have I not asked, or what have we not spoken about, once you have got someone up and running. What are some of the the. Insights and value that people are getting that I haven't asked you about,

Dina Nagib: No no no. That's a good question.

Jake: In term… well, because I'm always looking at things through a marketing lens, right? So I'm always thinking about, okay, how do we get the brand to the right consumer? How do we, you know, do… increase… if it's just for retail, is it, like, you know, sales volume of work with the brand? Is it sell-through or sell-in to new retailers? But there's a lot of other aspects to running a dispensary and I don't know, like, okay, here's a question. The, the dashboard that you create for people at the dispensary, who gets to look at it? Like, is it just for the owner or like who else is, is looking at the information?

Dina Nagib: Yeah, that's a great question. The owner, absolutely. I think that that's something that is important to get them involved in if they're involved in the operations. Inventory manager and the GM for sure. So those are the big ones. We do have some bud tender metrics as well, and that's one of the things that was really interesting. And one of the things that I really loved working with one of my clients is. he just lit up when we looked at his Budtender data, and he could see his, like, top performer, and then the… this other person came in and started, like, doing better than them, and just the… The importance of that and the people, because that's the thing, like data, we're looking at it, it can be kind of cold, we're making decisions, but like ultimately it's, you know, the people that are running the operation and moving products through the store, and so that was one of the things that I really loved seeing, and I think can really help Umm. The owners and the general managers make sure that their staff is performing and continuing to raise their game.

Chapter: Dashboard Modules

Jake: Yeah, actually, that now leads me to a different question, which is… what are all the modules of your dashboard? Like, what dimensions of data do I get? We've been talking about, like, margin and promotions a lot, but you just mentioned the actual staff, and what they're… sales rankings are, or whatever you want to call that. What are all the modules of the dash.

Dina Nagib: Yeah, so the data that we pull right now is just from the point of sale system and we pull inventory, sales, and customer data. We do drop the PII when we pull it in and we have an AI data cleaning agent that cleans all the data. If there are any issues with the naming convention, with categories, we clean it all up. and then from that we do like we've talked about a lot the inventory we really dig into that how the sales are moving but you can absolutely get at your bud tender information from that as well because that's all tracked in the sales data and then we also have a module which does have some customer retention loyalty shows you how many of your customers are new and how many are returning which with one of our clients that we onboarded and they opened last year it was a really nice story that we could see from like all new customers to how they shifted to having loyal customers that were returning so you know they can they can focus on on their loyalty and marketing as well so right now those are are the things that we're looking at and we do start off with an audit report which is a 52-week historical look at all of their data so we'll start off showing them this is how you've been performing over the past year then we'll start feeding in the data on a weekly basis and then they can see moving forward how things are going from all of those perspectives.

Chapter: Customer Segmentation and Incrementality

Jake: Okay, and then I imagine you can look at… You can segment that into… sort of promotional-driven sales versus non-promotional-driven sales. We've done… last year, we… we did full POS integration as well, but really through a marketing lens and looking at things like What is, you know, breaking down every customer in terms of, are they a brand new customer? Are they a win-back or reactivation customer? Or are they, a regular shopper, right? Regular shopper, meaning they shop at least once every X days, where 60 days seems to be about what most people think is right. We can do it, whatever, it could be 45 or 90 days, but if someone hasn't shopped it within 2 months, we consider that, like, a reactivation. And then looking at the follow-on purchase information, which has been really fascinating. So we will see someone hasn't shopped in 6 months, sometimes a year. Come back and then make like. two or three purchases inside of the next 90-day window. So not only did you get them back, but you got them back, and they stayed. And then understanding, okay. who are those people? What are they like? How did we get them back? Was it a promotion? And did… Even if you got them in the first time from a promotion. Were the subsequent purchases, were those also, you know, under some promotion?

Dina Nagib: Oh, I love that.

Jake: Looking at how those dollars… and the other thing we've been looking at is… incrementality and churn analysis, right? So, for… if you take customers not exposed to ads or promotions, and customers that are exposed to ads and promotions, for your regularly shopping customers. How much incremental revenue do you… Get. per customer, and it turns out to be quite a bit, right? Like, somewhere between 20 and sometimes 40% of… you know, and I… and I try to break things down into Non-cannabis analogies, because sometimes it works better, which is like. you know, like, Pizza Hut has ads on TV, everyone knows who Pizza Hut is, but serving someone an ad about pizza, like. you're like, oh, that… I… I want… I want pizza. Maybe not right now, maybe I want it, like, in a few days, but, like, it actually does have an And being able to measure that, over time can give you some pretty good strategies. And it all is the same thing, whether it's digital ad or promotion on a billboard, whatever, it's just, you know, it's all… Promotional activity and understanding how it drives.

Chapter: New Customer Acquisition vs. Retention Economics

Jake: We'll, we'll spend one minute on the new customer thing cuz I didn't really get into that. I, we get that a lot also, right? Which is people come and they say, I only want new customers and that's great. Everybody wants new customers, but new customers. Are… you don't know exactly what you're gonna get out of that new customer, especially if you're bringing someone in on a heavy discount. There's a lot of people that will just shop, shop their neighborhood and, you know, pick up those first, first time customer discounts. And so that's a little bit of an education and conversation that we have. With advertisers about, well, Okay, you spent $10,000 here, and you got X new customers. Let's look at the $10,000 that you spent marketing to your existing customers, reminding them of who you were and, and staying top of mind so that they make purchases from you. Sometimes you make more money doing that, right? You get more sales, you get better margin by staying better connected with your existing customers than trying to focus only on new customers.

Dina Nagib: Yeah it's an interesting thing I was just talking to somebody about it last week too and it is this thing that all dispensaries want new customers but it costs more to get new customers than it does to retain a customer and those loyal customers over time are going to you know make you so much more money so yeah it is It's frustrating.

Jake: Yeah, well, it's, it's, it's counterintuitive, right? But if you have data, that's, that's how you can, that's how you can, win, win over hearts and minds, right? Which is, here's real dollars in, real dollars out, here's customer behavior. Over time, look at it over a 2-year period. Take the, you know, the deviations out of the edges and look at what's really happening and say like, well. we've got enough information, and then, by and large, dispensaries do have the right information, it's just… has not been easy for them to look at, and so I think that's… I think it's great what you're doing, giving people those insights so that they can… they can run their businesses more efficiently.

Chapter: Is Your Point of Sale Lying to You?

Dina Nagib: Yeah, it's really important, and I think one of the things, one of the teasers that we did for this was, is your point of sale lying to you? And it's… Most of the time, not. Like, I totally agree with you. The data's there, you can trust it, but there are still issues, so if you aren't sure, definitely, like, talk to somebody that understands the data, because, I do still find Issues in some of those.

Jake: Yes, we find issues in data too, there is… A, we, we won't name names, there's an e-commerce platform that exists out there. That allows the bud tenders to Overwrite the, the reference id, which is the key that attaches the e-commerce order to the POS order. That's the, it's the only way to connect them. And it's a free form edit field. And so like we get, we pull the data in and sometimes it's like, just says like guy with red hat or like whatever they, the bud tenders decided right in there, just overwrote the number. And then you've lost that connection, and you can't resolve it. So… Yes, there are some issues with data that need to be still fixed.

Dina Nagib: And a freeform field, like that makes me physically ill. I'm like, I can't with that data.

Jake: Yeah, it's… it should not… it should not be user editable, but we work with what we have, and we… and we do the best we can.

Chapter: How to Reach Grass Goddess Consulting

Jake: I really appreciate all your time and expertise. Real quick, how can people I think I've got a pretty, a good idea of who should be talking to you, which is pretty much any dispensary owner. How can people get ahold of you? And maybe you could give quick, just a little pitch on, I know we've talked about it at length, but if someone, we're gonna slice a little. 30-second blurb here and put it somewhere. Tell us about Grass Goddess and why you can help people.

Dina Nagib: Yeah, thank you so much, Jake. This has really been a fun conversation. And yeah, I'm pretty active on LinkedIn, Dina Naguib, Grass Goddess Consulting. There's also a page website, grassgoddessconsulting.com. Also on Instagram, grassgoddessconsulting. And, Yeah. I would say our quick elevator pitch, we're gonna help you select the right software, implement it in the best way, and implement data and analytics to help your business grow. So, reach out if I can be of any assistance.

Jake: Perfect, that was, that's not, that was like 8 to 15 seconds, that's even easier. thank you so much, enjoy your road trip, drive safe, don't speed, and… We will. We will chat soon.

Dina Nagib: Awesome. Thank you so much.

Jake: Thank you. Have a great day.

Dina Nagib: You too.}

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