[2:20] – Joel explains what Baker does
[3:51] – Joel talks about when he decided to get into the cannabis space
[4:57] – Voids Joel encountered when entering the cannabis space
[7:37] – Joel talks about benefits that are most popular with dispensary owners
[11:04] – How Baker drives dispensary customer engagement
[12:46] – Open and click through rates when a customer first starts using Baker
[14:12] – Using Baker to send text messages
[16:01] – Joel talks about expanding customers’ interests without alienating them
[17:15] – Does Baker have an API to the different software systems
[18:31] – Baker’s loyalty features
[20:40] – Joel talks about training staff to use Baker
[22:54] – Joel discusses Baker’s user interface
[24:51] – Joel’s book and web application recommendations
[27:37] – Baker’s fundraising process
[28:35] – Contact details for Baker
Many vendors have sold outside “solutions” to the cannabis industry. As a result, dispensaries are running on a hodgepodge of systems. To make matters worse, none of these systems talk to each other, costing your staff time, and dispensaries money.
These vendors don’t understand the cannabis industry and its inherent challenges, but Baker does. Running a dispensary is not like running your local pizza shop learn why in this interview with Joel Milton, co-founder of Baker.
Learn more at:
What are the five trends that will disrupt the cannabis market in the next five years? Find out with your free guide at: https://www.cannainsider.com/trends
Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.
Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatibles can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.
All businesses want solutions to help them attract, retain, and delight their customers and cannabis businesses are no different. That is why I’ve asked Joel Milton, Co-Founder and CEO of Baker Technologies to join us on the show today to discuss how to drive cannabis customer engagement? Joel welcome to CannaInsider.
Joel: Hey thanks for having me.
Matthew: Give listeners a sense of geography. Tell us where you are in the world today Joel?
Joel: Excellent. I’m actually in San Francisco. I split my time between here and Denver which is where our company is based and headquartered and Baker itself started off in Colorado and that’s where our initial dispensary clients were. This year we’ve expanded into Oregon, Washington, Arizona, Nevada, New Mexico, California, and even Toronto, Canada.
Matthew: Oh wow and give us a high level overview of what Baker does?
Joel: Absolutely. So Baker is a software company and first and foremost our goal is to help dispensaries really build their brand, keep their customers happy and loyal, and ultimately make more money as a business.
Matthew: And are you from Colorado originally? Are you from the Bay Area? Where are you a native of?
Joel: I’m actually a native New Yorker so I grew up just outside of Manhattan and I spent about six years living in New York City working in the tech startup scene and that’s where I met David and Roger my now co-founders. We got interested in the cannabis space, found out that between the three of us we had the product, the backend development, and the sales capability and we headed west and got involved.
Matthew: Does every place just seem vanilla after living in New York City? I mean you’ve got that tempo, the cadence of life there is just so ba, ba, ba.
Joel: It’s a lot. I think it’s a really exciting place to live and work and you do a lot of things in a very short amount of time while you’re there and I always will have a soft spot in my heart for New York but excited to have moved on and be spending a lot of time in Denver and the Bay Area. When you live in New York it’s easy to think the rest of the world doesn’t exist and when you go elsewhere you realize hey New York is a great place but there’s more to life too.
Matthew: True, true.
Matthew: Was there a particular aha moment when you realized you wanted to bring your skills to the cannabis space?
Joel: It’s funny you know it actually wasn’t my idea. David and I were working together doing a bunch of freelance work in New York City helping companies come up with and iterate early stage tech ideas and someone was telling me about the cannabis space and what was going on and I really started digging in and looking at the space and took a trip to Denver and I was really excited by the whole industry. I thought it was amazing. I met with a handful of dispensary owners and really talked to them about what their current challenges were and what sort of solutions existed and I realized there weren’t that many people solving problems who had a true technical background and it was there that David, Roger, and I really started evaluating where we were and it just so happened we were all at a decent point where we had the bandwidth to take on something new and it started off as like a side project and before long we were full time on Baker.
Matthew: What was the void? I mean aside from the background expertise that you’re like hey we want to go in and solve this problem or scratch this itch? Was there anything in particular?
Joel: Absolutely yeah. So two things one in Colorado at the time rec had just passed and you had these pretty long lines or at least crowded dispensaries and all of your customers waited in the same line whether it was a customer who shops once a week and buys a 100 dollars at a time and know exactly what they want or whether it was a tourist or a first time shopper who walks in and says hey what’s Indico, what’s sativa, or how many milligrams should I eat in an edible? So originally we built Baker to be an online ordering tool to help dispensaries keep their 20% of customers who accounted for 80% of the revenue right typical 80/20 rule. Keep these small group of people who really drove revenue and spent a lot of money happy and let them order ahead get in and get out so that the bud tenders could spend more time with people who had questions talking to them and explaining.
So that was the original void and it worked. We did that. We had early success. It was solving a pain point but pretty quickly we realized there was an even bigger void in the market which was dispensaries were spending a lot of money on customer acquisition. Advertising in print paper, digital, as well as the different listing sites getting their menu out there, trying to get eyeballs but they weren’t really spending any money on customer retention. So if you look at any other industry you see in typical retail it’s actually six times more expensive to acquire a new customer than to keep an existing one but for some reason in cannabis it was all about driving foot traffic, driving foot traffic and we found that a lot of these dispensaries didn’t actually fully realize the economics of every dollar they spend on these new customers many of them would come in for a deal, buy whatever product was on sale, and then not come back again.
So the ROI was actually negative and we started working with dispensaries who start to understand this and realize that it doesn’t have to be a race to the bottom. It’s not just about having the cheapest A or having the best deal that you can get people in your door. It’s really building that brand loyalty. The same way if I buy one brand of sneakers over another I’m not trying to buy the cheapest sneakers right. I like the brand that I like. Likewise there’s a real opportunity here for dispensaries to build their own brand, really connect with their customers, and drive repeat business. So we’ve really evolved Baker to be a full set of software tools that do just that which is really help build the relationship between the dispensary and their customer, drive that loyalty, keep the customer happy, and ultimately help the dispensary make more money.
Matthew: So it sounds like you’re saying segmentation and customization are some of the big primary benefits when you sit down with the dispensary owner. What are the top two or three benefits that you really try to drive home and that they seem to like the most?
Joel: Absolutely. Well first and foremost it’s building your customer list right. I think everyone knows that at the end of the day as a dispensary it’s really important to know who your customers are so helping them capture those customers pretty easily and for that we use an Ipad that we’ll give you that sits in your store or a tool that goes on your website. A lot of the times these websites are dead ends for dispensaries. If a customer does happen to find them there’s no real call to action. It’s just an address, maybe store hours, sometimes even they have a live menu, often not. With Baker we give you a shoppable menu so if a customer does land on your site they can actually order something and take an action or if they want to they can enter their cell phone number and sign up for personalized alerts.
So really it’s about capturing that customer data and then the second thing you said is exactly right too which is personalization and segmentation. So if you have one generic list that you send out to all the time there’s going to be a lot of people on there who are getting a lot of irrelevant messages and just like when you log on to Amazon part of the reason it’s such a powerful platform is because every time you log on its personalized to you. You see things that are on sale or available or recommended based on your needs and interests. With Baker we try to do the same thing so rather than send out a text to every single customer every Wednesday about Wax Wednesday half off two thirds of your customers never use concentrates which means two thirds of your customers are going to be getting spam every single Wednesday and they’re going to be very likely to opt out of all messages because they don’t want to keep getting that annoying text every Wednesday.
So with Baker we make it really easy to segment your customers based on their interests, send them what feels like a personalized relevant message so that they get excited every time they hear from you and they’re not like oh another message and I’m just going to instantly delete without reading but they know hey if I get a message from my dispensary it’s because they have something I want and it becomes that exciting feeling where you’re going to rush when you get a message and then the customer takes action and they actually click on a link and make a purchase.
Matthew: Yeah you’re kind of training your customers in a way that your emails mean something and your text messages mean something.
Joel: Absolutely and it’s not necessarily training them in a bad way right. We’re not manipulating the end customer. We’re actually making them happier and again that’s the same reason Amazon is great right. It’s not that they’re training us. They provide a valuable service. I know when I go on and I click recommend for me it’s going to be interesting and likewise we help these customers have a better experience and another feature that we offer is called strain alerts where if you have a really high demand product that you love right. Maybe it’s Blue OG a special hybrid that just is your favorite and it’s always out of stock. You can actually sign up to get a personalized message so as soon as that product comes back in store I get like hey Joel good news Blue OG is back in stock and I know I can either reserve it right there from my phone or run into the store and get it before it’s gone again and now that’s providing a really valuable service for the end user and ultimately if you make that end customer happy they’re going to become more loyal and be a better customer.
Matthew: So it sounds like what dispensaries that aren’t using Baker are doing wrong is they’re treating everybody and that they’re putting everybody in the same bucket, they’re sending them email blasts that don’t really tell them what to do next. Hey we have some announcement there’s no way for you to take any action. There’s no call to action. With Baker you’re saying hey we have this in stock now, I know you like it that’s why I’m sending it to you, and hey you can reserve it right here on your phone. So it’s taking it to a much deeper level.
Joel: Exactly. I mean the analogy I use is imagine if you got an email from J. Crew saying hey Matt pants are on sale today but there was no link or no image even. It was just an email that said those four words. They’re going to expect you to get in your car and find the nearest J. Crew and walk in and say I’m here for the pants right. It doesn’t make sense right. Of course not there’s a big picture of a model wearing the pants where you can see what it looks like and you can read a description and you can click on it and order it right from wherever you are your mobile device or your desktop. We’re providing that same experience. So when you get that Wax Wednesday text or that Blue OG alert you can click on it. You can see the specific product, you can read about it, and you can actually order it.
So it’s providing that next level. Closing the loop if you will on all messaging with a call to action and that also lets you track it because if you don’t have a call to action it’s impossible to know which messages are better than others right so a lot of times dispensaries don’t know what an effective messaging campaign looks like because they have no way to track it. They say oh I think we were a little bit busier on this day but maybe it was due to the text or maybe not. With Baker you can actually compare click through rates so you can see that hey 20% off did much better than five dollars off. We should do that again next time or hey the deal on this strain performed a lot better than they do on this strain. So it’s really important that you get that data, that feedback loop so you can actually improve and continue to do what’s working and change what’s not.
Matthew: Interesting. So when a dispensary implements Baker for the first time and they start customizing and getting deeper into the customization and segmenting of a customer’s interest what do you see in terms of open rate and click through rate? I mean is there like a doubling or what’s the general there?
Joel: Absolutely. Yeah it’s pretty exciting. We see typically after the first 30 days or so of collecting customer phone numbers with the iPads. Our clients usually send out their first marketing campaign and we’re surprised that they don’t do an incremental 10,000 dollars worth of revenue that initial day or two or three days and often times we have dispensaries say when they first really turn on Baker it’s the highest revenue they’ve ever seen and we get these unsolicited messages. We got one early this week. The subject was happy Monday and it was; it was to Glen, our Head of Customer Success. Hey Glen just wanted to let you know we did 10,000 dollars this weekend thanks to your message, 10,000 dollars more than we usually do thanks to your message.
It’s completely unsolicited and I think what these guys don’t always understand is they don’t believe that it will work because it seems almost too good to be true and that’s part of the reason we’re priced so competitively and that’s honestly our biggest challenge is that education piece because the notion of customer retention is not something that’s fully wide spread yet in the cannabis industry. So we’re still trying to help educate our customers, our clients on what this really means and why it can impact your business and more importantly the best way to actually implement it and to start using it.
Matthew: What about sending text messages? Most people are familiar with getting emails from businesses they like but what about text messages? Is there any kind of protocol or etiquette or things to do differently or think about differently there?
Joel: Absolutely and it’s the same things but it’s even more important on text because your phone, your text messages are very personal right. They have a 99% open rate right. Everyone reads their text messages and it’s because usually you only get them from people you care about or you know versus email everyone’s used to getting spam which is why the open rate is so low but if you start getting spammed via text message that feels much more like an invasion of privacy then getting spammed on email and that’s why it’s even more important that you only send the right messages to people based on what they like and at the right time of day. Our unsubscribe rate on text message is actually; the typical unsubscribe rate on text messages is actually 300% larger than ours.
So ours is less than a third of what the typical unsubscribe rate is and it’s because we really understand these customers and also we can help our clients understand the best way to send these messages right. We work with 150 dispensaries in 8 different states. We have a really good understanding of the cannabis market as a whole and obviously every state is very different and that’s why we have a full team of customer success that really understands each local market and every dispensary thinks they’re different and many of them are in a lot of ways but at the same time when you have that high level overview and really understand the market you can really work with your clients and understand the best way to send out these messages so you don’t get an unsubscribe and that you actually take advantage of the tool to drive revenue.
Matthew: Okay so let’s say you have Baker software implemented and working. You know your customers’ interest, you’re sending them emails kind of contoured to their personal interests, but how do you start to expand the possibilities of what they might be interested in without alienating them?
Joel: Great question. So a few different things one in the store like I said we set up an iPad where customers can select their preferences for what types of products they like. We also offer that full online order right so the more you use Baker the more we can understand what types of products you like and you order and then down the line as we start to integrate deeper and deeper with the different POS systems then it becomes even easier for us to build a customer profile to make sure you’re getting the most relevant information possible. So there’s a number of ways right and the goal is that the longer we’re around and the more we’re working with each dispensary then in this industry we’re going to continue to refine our platform to be smarter and smarter to provide a better and better experience.
Matthew: How does Baker enable online ordering for dispensaries but then integrate with the point of sale systems which you just mentioned? I mean it’s really valuable to be able to reserve and eighth of Blue Dream but if I go in to the dispensary and its gone then that turns from a benefit to a liability pretty quickly. How does that work? Is there an API to the different software systems out there?
Joel: Yep great question. So we do work with a number of the biggest POS solutions out there as well as a bunch of the smaller ones that are up and coming and Baker is designed to be complementary to a point of sale right. If you look at most industries your point of sale is very different than your customer retention platform and your marketing tool. In cannabis a couple POS systems are trying to do all of it themselves and many of them offer some basic functionalities that we do but at the end of the day all we do is focus on that and we do it really well and many POS providers understand that and they say hey you know what if we integrate with Baker we can give our client the best experience possible. We can give them our point of sale, Baker can handle the online ordering and the loyalty and the messaging, and if it works well together that client is going to be really happy and they’re not going to churn and that’s great news for a POS company as well.
So we are really working closely with these POS companies to do just that and insure that if you order something online that order shows up directly in your point of sale. If we’re not integrated with the point of sale that order will show up in Baker and you’ll pull it off the shelf but obviously it’s a much smoother process when we have that full POS integration.
Matthew: Tell us about the loyalty features in Baker and how we get customers to be more loyal in general?
Joel: Absolutely. Yeah so loyalty is interesting right. A lot of people understand that they need it, a lot of people don’t understand the best way to use it, and we provide a number of different tools that are pretty customizable to fit whatever the dispensaries needs are but we also have our set of best practices and that’s really important because at the end of the day like I said you start to see certain things that really work well and for us we’ve found that one of the best ways to drive loyalty is have almost like a digital punch card, like a check-in system so every time someone comes into the dispensary they sign in on the iPad, they get points just for coming into the store and we know that driving foot traffic means that customer is going to be more likely to see something and maybe buy something else and just keep them coming back builds good will.
And we find that’s actually more effective than a points per dollar because then you get this long tail where you have these really high spending customers on one end and they actually take up the bulk of your loyalty resources and the majority of your customers don’t benefit from it because you have to build your system to cater towards these really high spenders. So Baker has actually designed at its base level to just be points per check-in. So every time someone comes they sign into the Ipad they get points, once you get a certain amount of points there are certain rewards that you’re eligible for, and it’s not a static list of rewards and it’s not like you have to get this at this milestone. So after you accumulate points think of it as like a ticket at an arcade right.
You can spend 100 tickets and get the gumball or you can spend 1,000 tickets and get the stuffed animal or you can save up for 10,000 tickets and get the race car. So we let people choose do they want to redeem their points now for something smaller or save up for something bigger and this allows them to choose rewards that again are relevant to their interests because if you have a reward that’s a free pre-roll once you get to 100 points a lot of people don’t like pre-rolls right. People like to roll their own. If they don’t like to smoke whatever it is so again it all feeds back to that customization.
Matthew: What about getting the dispensary staff trained up and up to speed quickly so they can use this without their being a huge learning curve? How does that work?
Joel: Yeah. So when you’re a new client you get a box in the mail and it comes fully ready to go. It comes with an iPad that all you have to do is turn on. It has an instructional video when you first turn it on. It’s preconfigured for your store specifically based on your color scheme and logo and everything else and our generic loyalty system or whatever you decided upfront is also preloaded. All you have to do is just turn it on and sit it there. People like it. They walk up to it, they use it, they sign up for messages. All of a sudden you start building your customer list and it really is very easy to do from a dispensary standpoint. We have a full time onboarding specialist who does nothing but help their staff get trained when you first get started and we have a full customer success team that works with you over the duration of your time with Baker to constantly evaluate what’s working, what’s not, tweak your messaging profile, figure out what sort of deals to offer, and really make sure that you understand what’s working.
And most importantly it’s for the feedback and it’s really important to know that everything we’ve built has been built based on feedback from our client’s right. We’ve been working on Baker for two years now and every two weeks for the last two years we push updates and those updates are constant reflections of what our clients are asking for. So for example someone says hey I’d love to write a bunch of messages on the weekend and schedule them to go out for the next month because I’m going out of town. So we built that functionality right and now a marketing manager can sit down and in 30 minutes schedule all of the messages for the next four weeks and then walk away and it automatically happens or the ability to customize certain things in the loyalty platform right. We listen and work with our clients so customer success not only makes sure you know how to use Baker but their job is also to be a conduit for feedback between the client and our development team so we can continue to build Baker for our clients.
Matthew: What about user interface? It sounds like you’ve put a lot of thought into the experience. All you have to do is open the iPad and turn it on that’s a great convenience but what about the user interface in general? I know sometimes when development teams are working on something they’re so close to it that it’s hard to imagine someone looking at it for the first time. What can you say about that?
Joel: Absolutely. So David, one of my co-founders is a really talented user interface guy. He was top of his class at Cambridge studying architecture so very visual with the design and understanding how people interact with spaces and technology and then like I said we spent six years in New York building mobile web apps, iPad applications, Iphone applications, and really doing a ton of user testing of how people interact with technology and not only technology but the world around them and so his main focus is really taking all of that knowledge as well as all the knowledge we’re gaining from this space from our clients to build the simplest and easiest tools out there and we understand dispensaries are really busy places right. We see it firsthand. You have inventory challenges, long lines, new bud tenders that just started, I mean regulatory challenges. There’s always something going on that the last thing these guys need is complicated software.
So Baker is designed to actually make your job easier. Our menu takes a minute to manage as opposed to managing a menu elsewhere which can take 30 or 45 minutes. We have one button that lets you export your menu and print it versus other people who say it takes them 20 minutes a day to print out their menu or again we have automated stain alerts where we have dispensaries that are writing down your name and what strain you wanted and then when that strain came back in stock they were manually texting or calling every single customer and spending hours a week doing that. So our goal to automate as many of these things as possible, make everything one click, super simple because we know how hard it is to run your business and the last thing we want to do is be more work. We want to make it less work and help you be more efficient.
Matthew: Joel I want to transition into some personal development questions to let listeners know a little bit more about who you are personally. As you look over the arc or your life is there a book that stands out that has had a big impact on your way of thinking that you’d like to share?
Joel: That’s an interesting question. I studied psychology and philosophy when I was in school so I’m a big... I’ve always been curious into the way people think and what we think about and I would say Malcolm Gladwell does a pretty good job of helping us understand some of the odd tendencies that people tend to exhibit. We call them biases and there are certain predictable behaviors that we all fall victim to right because our brain takes these shortcuts and I think really reading that and understanding that helps me understand if I’m being irrational about something and really take a step back and look and say okay is this actually the right thing to do or am I just caught up in X, Y, or Z? So I think understanding that has been really helpful in shaping the way that we think about problem solving.
Matthew: Is there a tool web based or otherwise besides Baker that you consider indispensible to your productivity?
Joel: I mean I think Slack is the first thing that comes to mind. Our team is all very active on Slack. We have like I said the majority of us are in Denver but we have sales people in different markets and I think it’s really important to always be communicating and Slack makes it really easy to do that. I think email can get messy and the more the rest of your team knows what’s going on the better we all can be and make sure nothing gets dropped. So Slack is certainly the most important team wide tool and then personally I like an app called Wunderlist which is just a to-do list that syncs with my phone and my computer so no matter where I am if I have to jot something down I don’t forget to do it. It keeps it organized in one place.
Matthew: That’s great. I use a list app as well called Anylist and my wife and I we can share different lists of things we need while we’re out and so forth.
Matthew: It’s really handy that way.
Joel: Yeah it’s great. I have lists for myself, I have lists for different people on my team, I have a marketing list, I have an operations list, and then I have a shopping list that my fiancée and I both share.
Joel: So no matter where you are you add something to the right list and you make sure it doesn’t get forgotten about.
Matthew: Yes. So well back to Slack do you think that’s cut down significantly on the emails that you have to look at and take some action on would you say?
Joel: Absolutely. Yeah I think it’s so easy for something to get lost in email purgatory and once it gets dropped it’s never to be seen again. So Slack is a great way just to get quick little updates and also channel wide updates without really clogging up everyone’s inbox. So I think there’s a reason they’re growing so quickly. It’s because it works.
Matthew: Joel where are you in the fundraising process? Is Baker looking for more funds currently?
Joel: So we closed a 1.6 million seed round that we announced earlier this year and we’ve been growing very quickly so from a money standpoint we’re in a pretty good spot but that said anytime you grow from 6 to 16 people in a year and we’d like to hire three or four more you’re always needing more resources to fuel growth at that pace. So we’re fortunate that we have some really fantastic investors who will continue to support us and also really well connected investors and we’re constantly getting interest from new and exciting people. So I guess my rambling answer is we’re not aggressively fundraising but we’re always keeping our ear open and there’s a very good chance we’ll put some more money in the bank soon when the opportunity that’s right presents itself so always is the answer.
Matthew: And how can listeners find and connect with Baker online?
Joel: Our website is www.trybaker.com. It’s www.trybaker.com and there you see most of our B to B tools right so if you’re a dispensary out there or even a (28:48 unclear) an edible company looking to figure out how you can better engage your customers check out www.trybaker.com and you can see all of our tools and if you’re an end user you can go to app.trybaker.com. We’re a mobile web app because Apple won’t let you do cannabis commerce in the app store but if you go to app.trybaker.com you can see all the different dispensaries that are on our platform and actually see what products they have in stock and if you see something that catches your eye you can place an order and reserve it right there.
Matthew: I got to say this is what I really love about the cannabis industry is that there is smart entrepreneurs doing really interesting things but also the industry as a whole doesn’t have to many legacy systems particularly in software so they can just boom go right to Baker or some other software that helps them a lot right away and get kind of the best and greatest from nimble little teams like you have. So this is an exciting time to be alive and congratulations to you. Good luck with everything and thanks for joining us on the show today.
Joel: I appreciate it. Yeah I think you hit the nail on the head right the tool that you use to manage your pizza shop should not be the same tool that you use to manage your dispensary right.
Matthew: Right, right.
Joel: Cannabis is a unique and special industry and we’re excited to be focused just on it alone because there’s enough there to keep us busy.
Matthew: Thanks Joel.
Joel: Alright thank you. Take care.
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