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The Ultimate Guide to Effective Tobacco Marketing

You know your tobacco shop is the best in town.

Does everyone else?

 

Whether you’re new to the tobacco industry or are a seasoned tobacco retailer, you need a marketing strategy. Without a solid marketing plan, your potential customers have no way to find your business — and you might lose loyal customers to a competitor with better advertising.



What's in this guide

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The rules

The regulations that apply to
tobacco marketing

Read
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The plan

A step-by-step guide to creating a unique marketing plan for your small business

Read
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The tech

How to use your tobacco store point of sale (POS) system to boost your sales 

Read

The Tobacco Marketing Restrictions
You Need To Know

Tobacco advertising restrictions are among the harshest in any industry, with nearly all ads for nicotine products banned from TV, radio, event sponsorships, and paid advertising on online platforms like Google and Facebook. It’s also worth noting that most telecom carriers strictly ban mentioning tobacco products in text message marketing, even if adults opt in to SMS from your business.

To be clear, this is not a guide on skirting tobacco advertising laws. The good news is there are many effective strategies to reach your customers that still follow the rules.

The U.S. Food and Drug Administration has outlined the regulations surrounding tobacco advertising, but here are the most important ones to keep in mind.

 

Pro tip

Understanding and adhering to all tobacco marketing laws and regulations is critical for protecting your business. Failure to understand and comply with relevant rules can lead to hefty fines and penalties — and even the loss of your tobacco license in some states.

  • Promoting or selling tobacco products to minors is strictly prohibited. The minimum age for tobacco sales in all 50 states is 21 as of 2019.

  • Tobacco advertisements must include a prominently displayed health warning. Visit the FDA’s website for specifics.

  • Retailers cannot sponsor any events, including sporting events, festivals, and conventions.

  • Free samples of any kind are illegal (this includes as part of a membership, rewards program, or contest).

What you can do

No paid ads. No sponsorships. No samples. What’s left?

Plenty of options! Here are some of the most effective (and legal) ways tobacco retailers can market their business and products.


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Social media &
collaborations

Post about your shop and expertise on social media (just avoid product ads) or collaborate with influencers on content.

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In-store
advertising

Put up ads within your store to highlight deals and showcase new products, or get compliant product ads directly from manufacturers.

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Newsletters
& blogs

Write regular updates about your store, upcoming events, educational posts, and more.



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Scan data
promotions

 Generate scan data reports in exchange for rebates and discounted items from manufacturers. 

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Website

Create an SEO-friendly website for your business to appear in local searches and showcase your stock and lounge areas.

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Loyalty programs

Encourage customers to come back by creating membership programs that let them earn rewards or get membership perks.

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Events

Hold events at your store to highlight new products, like a product launch party, or just socialize and learn.

Just need the basics?

Download this free cheat sheet for the basic do’s and don’ts of tobacco store marketing. 

Get the cheat sheet

Tips for Effective Tobacco Marketing

Now that you have a better idea of what you can (and can’t) do, let’s go into the practical steps for building a marketing strategy for your tobacco store or lounge.

Tip 1

Understand Your Target Market

The first step to creating an effective marketing strategy is to define your audience. Your target market will be determined by factors like the types of tobacco products you sell and where your business is located.

Market research is essential for understanding your target audience and their preferences. It involves learning about who your current customers are and what they want when they visit your shop.

You should look at both what’s popular in your shop currently and what competitors are doing in the area. Should you carve out a niche, or try and beat the competition at their own game?

Example

If you primarily sell fine cigars and accessories, and your business is located in an upscale mall, you may want to design your marketing strategy with older, affluent customers in mind.

 

If you're located in a strip mall in a college town with customers that skew younger, creating a sleeker store layout and keeping up with the newest products like vape pens, flavored air, and CBD could be a good strategy.

Using Your POS System for Market Research

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Your POS system can be an invaluable market research tool. Use your sales reports to look at things like:

 

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Product category reports

See which types of products are most popular and how quickly they sell.

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Daily sales peaks

Identify when you have the highest foot traffic. What kind of customers come in during your peak sales hours?

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Vendor analysis

Find out which vendors are selling your most popular products and what the profit margins are. 

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Customer history

Track customer sales history and spot trends among your loyalty members or create customer segments.

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Dead stock

Determine what parts of your business aren’t popular and not worth investing effort into marketing.

Tip 2

Craft a Compelling Message

A successful marketing campaign clearly communicates to potential customers why they should shop at your small business instead of a competitor’s. To get this message across, you first need to spend time thinking about what sets your business apart.

In the marketing world, defining what your business has to offer and why it’s unique is called developing a value proposition. Crafting a strong value proposition sets the foundation for a successful marketing strategy that brings the right customers through your door.

Along with addressing the right audience with the right message, you also want to make sure your marketing messages are engaging, informative, and in line with your shop’s value proposition.

To craft messaging that sticks, put yourself in your customers’ shoes. What questions do they want answered? What expertise do you have that they would be interested in? What would make you feel compelled to visit your shop if you were a customer?

 

Try It: Create Your Mission Statement

Use the form below to narrow down what makes your shop special and who your ideal customers are. Then try and write a mission statement that incorporates those elements.
1

Define your value proposition

What makes our shop special is our…

Varied or wide selection of products
Imports and rare items
Niche or unique products
Expert guidance and help
Friendly service
Low prices
Culture
Comfortable lounge or smoking areas
Other:
2

Define your ideal customer

Our ideal customer…

Skews young
Is older or middle-aged
Is high-income
Is middle-income or working class
Makes frequent small purchases
Comes in for big events and special occasions
Keeps up with the latest trends
Likes an "old school" feel

Tip 3

Choose the Right
Marketing Channels

Marketing in the right place is almost as important as marketing to the right audience. When choosing which marketing channels to use to connect with your audience, remember to keep your market research findings and value proposition in mind.

Where are you most likely to reach your target audience? Which channels will communicate your unique value proposition most effectively?

Click on each tab for details.

Social media

Social media can be a great tool to stay connected with your current customers and reach a new audience. For social media success, make sure to post regularly and share content that shows what your smoke shop has to offer.

For example, when a new brand of cigar arrives in your store, you might make a post encouraging your customers to stop by. It’s also a good place to showcase your expertise and shop culture.

While curating your shop’s social media presence can be a helpful way to grow your brand, it’s also important to know each platform’s rules regarding tobacco advertising. For example, Facebook and Instagram prohibit paid advertising that promotes the use of tobacco or nicotine products. (Luckily, if you get creative, there’s a lot you can do organically!)

SMS

Text message marketing is strictly prohibited for tobacco products, but you can still use it to promote your business. Use built-in text messaging on your POS system to promote events and highlight seasonal sales — just keep specific product mentions out.

Advertising for age-restricted stores also requires specific age verification and opt-in rules — using a sign-up flow built into your POS (in the same place you would enroll a customer in your loyalty program) is ideal.

Email

Email is another essential way to stay in touch with your customers. Hopefully, you collect contact information for your loyalty program. With email marketing, you can send regular newsletters to your customers showcasing new products that have arrived, sharing fun facts and expert tobacco tips, and advertising your current deals and promotions.

 

Website

Even if you do most of your business in person, the majority of customers will find your business online. A great website is a must.

Having an online store not only allows you to cater to customers who prefer to shop virtually, but it makes it easier for potential customers to find you. Focus on search engine optimization (SEO) best practices:

  • Include your location in descriptions (e.g., “The best smoke shop in Denver, Colorado,” “A cigar shop serving customers in Atlanta”).
  • Use product pictures and make sure no picture is larger than 1MB. A POS system with e-commerce integrations can update product pages automatically.
  • Include an ‘About’ section that highlights your value proposition.

You should also update your Google Business Profile. Keeping this accurate ensures your website shows up on local Google searches and in Google Maps.

In-store marketing

If your foot traffic is steady but you want to boost sales, a focus on in-store marketing might be the best tactic. Use signage to make your tobacco store easier to navigate, highlight new products, and showcase the latest deals.

Many areas restrict external-facing advertisements for tobacco, so focus on interior signage. Even simple tactics like using colored labels or sale items, or country flags to highlight international products, go a long way.

 

View All

Tip 4

Plan Creative Promotions

One of the most important parts of effectively marketing your smoke shop is to give new and returning customers a reason to shop with you. This means planning enticing promotions they can’t pass up.

Here are a few unique smoke shop promotions that are easy to set up through your point of sale system.

Mix & Match Pricing

Offer special pricing to customers who purchase a specific combination of products. For example, you can promote two of your products by offering a buy one, get one (BOGO) 50% off special, and your POS software will automatically apply the discount at checkout.

Kit Building

Create kits to engage with your customers, boost sales, and share your tobacco expertise. Your POS system should make it simple to group certain items together into a kit for a special price. For example, you might offer a beginner's cigar kit or even a gift set for cigar lovers that includes cutters, humidors, or other accessories.

Loyalty Discounts

Encourage people to sign up for your loyalty program and keep checking back with your store by offering member-exclusive discounts. You can either offer redemption for accrued points or automatic short-term discounts for existing members.

Seasonal Promotions

Set up rotating promotions based on the time of year or around popular events — like a big football game or local festival.

Put Your Tobacco POS to Work

It’s easy to think of your POS system as simply a tool for processing payments — but the right system completely changes the way you plan and execute your store marketing.

 

Essential Tobacco POS Features for Marketing

Reports & analytics

Use sales, inventory, and customer reports to keep track of what’s working (and what’s not).

Learn more

Flexible promotion setup

Set up discounts and promotions directly in the back office so deals apply automatically at checkout.

Learn more

Loyalty & CRM

Sign customers up for your loyalty program right at the point of sale, set up tiered memberships, and segment customers for personalized marketing.

Learn more

Use reports to refine your marketing strategy

Creating and implementing your smoke shop’s marketing plan isn’t a one-and-done process. To make the most of your marketing efforts, keep an eye on how your marketing strategies perform.

Your POS system tracks every purchase made in your store, and it generates easily digestible reports that give you valuable insights into your customers' buying habits and preferences. With this data, you can tailor your offers to your customers’ wants.

The performance metric that matters most is your sales. To see how each marketing strategy impacts your profits, record when you began your marketing efforts, then check back in 30, 60, and 90 days with your POS system’s sales data. Has the number of customers visiting your shop increased? Are customers spending more on average?

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Pro tip

Launching one campaign at a time yields the most accurate results. If you begin sharing social media posts, sending email newsletters, and promoting your customer loyalty program all at once, it's difficult to see which of these channels actually drives higher sales.

Once you identify which marketing channels and messages have the greatest impact on your smoke shop's sales, you can optimize your strategy.

Set up promotions that apply automatically

Running a promotion can quickly turn into long lines or frustrated customers if your staff have to manually apply and look up each one. This is why it’s important to use POS software that includes promotional pricing directly on the inventory management system.

Tobacco POS software lets you set up unique promotions for periods of time, specific products, customer groups, and more.

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Customize a loyalty program that works for your business

A customer loyalty program is another must-have promotion for your smoke shop. Implementing a loyalty program is one of the most effective ways to boost sales and build your customer base.

Loyalty programs are usually free and point-based or paid tiered subscriptions. Tiered subscriptions typically work best for cigar lounges and specialty shops. Loyalty programs are often a paid add-on for POS software, but you should ideally find a system that includes it out of the box.

Most importantly, once you have a customer’s login information, you can start to track individual sales history and create customer segments.

Customer segmentation 101

Creating customer segments or customer groups is a highly effective way to personalize marketing.

Here’s what you need to know.

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What is a “segment”?

Customer segments are defined by finding patterns in your customers’ sales history. For example, you might create segments for things like:

  • Frequent visitors: Customers who visit the store three times or more per month.
  • Cigar enthusiasts: Customers who’ve spent over $300 on cigars or bought certain brands of cigars.
  • Vape flavor testers: Customers who bought vape refills or disposable vapes in the last two months.
  • Re-engage: Customers who signed up for your loyalty program but haven’t made a purchase in the last month.
How do you create segments?

Segments are created by looking at your customer loyalty sales reports and applying filters. Once you spot a trend, you can then apply a customer group (segment) label  for the customers who have been filtered out.

Why is segmentation useful?

When some shop owners hear about “personalized marketing,” they think it means going through every customer and sending out individual messages — a strategy that’s painful and unsustainable.

Segmentation gives you an easy way to personalize marketing by sending them promotions based on what they already buy. If you have an expensive imported cigar coming into the shop, your customers who don’t buy cigars won’t care — segmentation lets you send that announcement only to people likely to be interested.

Get more out of your tobacco shop marketing with a POS system built for tobacco retail.

Running a tobacco shop can be difficult — especially when your hands are tied due to marketing regulations. It’s even more difficult when you don’t have a clear picture of your inventory, sales, and customers.

Cigars POS is one of the only systems made specifically for tobacco retail, giving tobacco stores the tools to boost sales and connect with customers, together with deep compliance and inventory control.

Together, we can take your tobacco shop to the next level.

Get in touch
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