Cannabis digital marketing was pushed into overdrive thanks to the Covid pandemic. Like traditional retail before it, cannabis retail is moving rapidly towards a more digitally integrated experience and consumer behavior is changing along with it. Thankfully for cannabis brands, there’s a tried and tested brand marketing blueprint to follow in order to build out their Direct to Consumer (
DTC) digital strategy.

Traditional Consumer Packaged Goods (CPG) marketers used to operate much like cannabis Brands do now – focused on shelf-space and managing retailer relationships, but the internet changed that dynamic. With the accelerating digital shift and where two-thirds of consumers now expect to connect directly to the Brands they buy, CPG companies have turned to building and managing direct customer relationships, taking advantage of the efficiencies of the digital landscape to do so, rather than fighting to hold back the tide.  While strong retailer relationships help drive sales for cannabis Brands, it contributes very little to increasing the Lifetime Value of the Customer (LTV), allowing the fickle consumer (and retailer) to switch Brands with alarming regularity and no easy way for the Brand to intervene.

Unlocking a latent, powerful marketing channel Brands never knew they had

What if Brands could change all that by creating their OWN marketing channel using their existing widely distributed packaging?  The digitization of cannabis Brand packaging, which requires a tiny footprint, but creates a highly engaging experience right off of every package, gives that power to the Brand almost instantaneously.  Want to deliver a deep branding experience along with all the knowledge required to have the best, most predictable, and enjoyable Brand experience on every product?  Consumers simply point their camera at the packaging.  No app to download, no registration required, no typing, just point-and-click.  Within one production cycle, a Brand can
create a DTC channel, start building a relationship with those consumers, and drive Brand affinity, loyalty, and ultimately repurchase behavior. 

Building a relationship with consumers is not easy, but this is where it gets really interesting.  An integral part of that same, simple packaging interaction is to deliver a call to action for things like product authentication, Brand loyalty, dosage and product tracking, which, of course, requires consumer registration.  When the consumer signs in to access these details, they connect directly with that Brand.  Successful cannabis Brands adopting this digital strategy have amassed tens of thousands of consumers and add hundreds more every day. They integrate their social media, web site, sales collateral into campaigns that both drive higher sales volume AND capture consumers on their digital platform.

There’s no disputing that digitizing cannabis brand packaging works, but how do you, as a Brand, know how much to spend on these tools, loyalty, and promotion?  This is where many young Brands get stuck, but successful traditional brand marketers have already figured this out.

To LTV or Not to LTV – That is the question

Lifetime Value vs Customer Acquisition Costs.  This simple ratio breaks down the complicated consumer journey by accounting for what you spend to acquire a consumer and what they are worth to you.  Simply stated, a 1:1 LTV:CAC ratio would mean you only earned what you spent over the lifetime of a customer – a questionable strategy. The best marketers figured out the “ideal ratio” of 3:1, which means you sell 3x what you spend to acquire each consumer – that’s Brand-building gold!

This is where digitally integrated cannabis packaging really shines. Brands are regularly seeing LTV:CAC ratios of 10:1 or more, even when accounting for the cost of a digitally integrated packaging platform like Lucid Green and the cost of the loyalty program.

The digital trends in cannabis may seem daunting in a new industry with so many aspects of the business still evolving, but one thing is clear, the post Covid retail landscape has changed consumer behavior forever, leaving it impossible for Brands to ignore digital marketing.  This no-brainer first foray into digital marketing allows Brands to gain an enormous advantage from that direct consumer connection, allowing Brands to take control of their brand affinity, loyalty, and drive up that all important LTV ratio.

If you want to see how these numbers play out with your own assumptions, email info@lucidgreen.io to contact your Lucid Green representative, who’ll help calculate your LTV:CAC ratio.