How Eaze is changing the customer experience for a newly legal product: cannabis

Repeat Customer podcast, episode 5

Eaze totally changed shopping for cannabis in California with its on-demand delivery app. But creating a leading customer experience for something that used to be illegal presents a whole set of challenges most companies will never have to deal with. Starting from the prohibition era and continuing through the medical marijuana years up to the current legalization of adult-use cannabis in California, we see how the retail and delivery industry has evolved as the laws have changed.

Featured in this episode:

• Eaze executives Sheena Shiravi, director of consumer communications, and Mick Frederick, vice president of the customer experience, discuss how they’re helping customers overcome the stigma of cannabis

• Grasslands CEO Ricardo Baca, former marijuana editor of the Denver Post, provides a history of the industry
• Adweek’s Ann-Marie Alcantara explains how Eaze is taking cannabis digital

• Sky Siegel, general manager for SPC Fleet, describes Eaze’s impact on cannabis delivery

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Transcript

[Mio Adilman]
Hey! Welcome to Repeat Customer, a business podcast by Zendesk. Have you ever had a friend over then realized, “Ugh, I totally forgot to go to the store,” but now they’re here, you don’t really feel like getting up, getting in your car?

[Kiki]
This looks delicious.

[Annie]
How long will it take to get here? Does it say?

[Kiki]
It doesn’t say. Should we order some?

[Mio Adilman]
Well, no big deal, these days there’s an app for that. And this woman Kiki is on one of them right now. She’s chilling with Annie, her guest, while she orders some stuff.

[Kiki]
Oh, 100% sustainable, sun-grown flowers in beautiful Humboldt County, California. That sounds great. I’m putting that in my cart.

[Annie]
Yay.

[Kiki]
Capsules and sprays, topicals. Oh, lip balm…That sounds amazing.

[Mio Adilman]
Snacks, flowers, skin creams. It’s amazing what you can get delivered.

[Kiki]
All right, I think we’re good here with what we have. We’ll go to the checkout. And I think place order. Boom…What? Estimated delivery 14 minutes.

[Annie]
Wow.

[Kiki]
That is insane. It would take me longer to drive. Oh my gosh.

[Mio Adilman]
Fourteen minutes! Before she knows it, the driver pulls up.

[Kiki]
Hi.

[Donna]
It’s $91…

[Kiki]
Here you go.

[Donna]
And you’re all set.

[Kiki]
OK, thank you so much.

[Donna]
Thank you. Have a great day.

[Mio Adilman]
Now, Kiki is about to have a really great day, because those flowers she ordered aren’t your usual flowers.

[Kiki]
This is really amazing, I just ordered cannabis to my door and it’s all so beautiful and I can’t wait to use it…

[Mio Adilman]
Kiki just ordered cannabis. Not food, groceries, or a mattress, or glasses, or anything from Amazon.

[Kiki]
It’s like Amazon but ten times better.

[Mio Adilman]
Yes…and ten times faster…thanks to a company called Eaze. Eaze is seriously changing the way people buy pot. But here’s the question: how do you provide an amazing customer experience for something that, until recently, was illegal? I mean, in some states it still is…

This is Repeat Customer, an original podcast from Zendesk about how companies create great customer experiences.

My name is Mio Adilman, and Zendesk is a customer service and engagement platform.

And today we are looking at Eaze. That’s Eaze spelled with a Z. Described by some people as the Uber of marijuana.

[Sheena Shiravi]
Hi, my name is Sheena Shiravi, and I am the director of consumer communications at Eaze.

[Mio Adilman]
What is Eaze, exactly?

[Sheena Shiravi]
Eaze is a technology platform that connects consumers with their local, licensed dispensaries to get cannabis delivered on demand…consumers can log on to either Eaze.com on their desktop or mobile, where they’ll see a variety of different product types of cannabis…so from different kinds of vaporizers, edibles, tinctures. We even have pet products.

[Mio Adilman]
In the same way Uber Eats doesn’t cook your food, Eaze doesn’t actually sell you cannabis. But it does give you a uniform, seamless delivery transaction with the cannabis dispensaries in your local area, assuming you live in California where it has recently been legalized for adult use. Right now, Eaze operates in the Bay Area, Sacramento, L.A. County and San Diego.

Sheena is gonna tell us a lot more about that, but first I need to process a bit here. That any of this is happening is unbelievable. I don’t smoke anymore, but there was a time…when I did…inhale…a lot. And besides all of the good times, the things I really remember are the pain points, to use a business term, the pain points around the customer experience of, you know, scoring drugs.

[Ricardo Baca]
The customer’s experience of buying cannabis 25-plus years ago was very different than it is now obviously. It usually centered around knowing a guy, having the guy’s number and will you share that number with me? It was, of course, a black market transaction… happening in alleyways and parks and apartments.

Hey, I’m Ricardo Baca, I’m CEO of Grasslands, a journalism-minded agency. And before this I was the marijuana editor at the Denver Post and the creator and founder of The Cannabist…

[Mio Adilman]
Now that’s an interesting job. Marijuana. Editor. Ricardo is talking about an illegal transaction. The whole time I was buying cannabis, I was scared of getting busted. Also, drug dealers weren’t always the nicest people. They didn’t always sell the best stuff. And they didn’t exactly keep regular hours. But California is where that experience first started to change.

[Ricardo Baca]
I think if you’re looking at the paradigm of cannabis throughout the country, going back as long as you want to go back, California has long been more permissive than other states…there was a time when it was heavily criminalized. But California was really the first state in the US to figure this out to grow beyond illegality and to ultimately embrace the world’s first medical marijuana initiative back in the mid ’90s.

[Mio Adilman]
In 1996, California passed Proposition 215, also known as the Compassionate Use Act. They were the first state to legalize medical marijuana. (This was way before Colorado and Washington State went fully legal.) So, for the first time in many many decades, you could get cannabis with a doctor’s prescription. And some people found it an effective alternative to taking some prescription pills.

[Ricardo Baca]
You didn’t need to prove too much. It was wide open but if you could prove a certain chronic pain, if you had a serious illness without a doubt but… Just think about what a monumental shift this represented at the time. This was substantial, this was everything, and even looking back on it now in 2018 I get goosebumps thinking about those early days of the first dispensaries, the first co-ops….

[Mio Adilman]
So all of a sudden, to a limited degree at least, marijuana became a legitimate business.

[Ricardo Baca]
In 1996, California that ultimately meant that for the first time there was an actual retail landscape.

[Mio Adilman]
And the whole idea of a well-considered customer experience became a thing.

[Ricardo Baca]
A lot of these shops have worked on their retail experiences significantly. Spent multimillion dollars enhancing these to feel more like an Apple store or a GAP store or a Sundance outlet.

[Mio Adilman]
Ricardo’s right. I’ve been to a couple of these places. Beautiful layouts. Great lighting. Nice displays. Comfortable couches. Helpful staff. I mean, they might be a bit high, but…these bud-tenders, as they are called, will walk you through what is now a highly diverse range of products. But remember, prior to 1996, cannabis was illegal, and this can still play into the customer experience.

[Sky Siegel]
Although the space is incredibly welcoming I think that a lot of people do experience a sort of intimidation factor. They’ve got to commit to the decision of driving themselves down to the dispensary and they’re going to walk in there. And it’s situated on a busy strip of road…who knows, your next door neighbor you might run into and that still carries a lot of weight and that stigma…because it’s been so often associated with a lot of negative connotations.

Hi my name is Sky Siegel, I’m the General Manager for SPC Fleet. We are a cannabis delivery service.

[Mio Adilman]
Sky’s fleet of drivers make deliveries to customers who have ordered through the Eaze app.

[Sky Siegel]
So beyond those who have a fear of any social stigma of walking into one of these shops, there are actually other legitimate reasons where people simply can’t get there. It could be a geographical issue, lack of transportation getting to the dispensary that services the area. It could be something as simple as maybe the person doesn’t have that kind of mobility. They’re not able to leave their home.

[Mio Adilman]
Stigma, inconvenient location, lack of mobility…the experience inside the store, or dispensary, was top-notch, but the experience of just getting to the front door, not so much.

[Sky Siegel]
One of my favorite stories happened in our very early days…and I was delivering to a patient of ours in Santa Monica who was in a building up on the second or third floor. Just watching her open the door, the expression of relief on her face…This is someone who had a very serious medical condition and was not able to leave their home. I was able to bring her some sort of relief and comfort.

[Mio Adilman]
So dispensaries started delivering, and those pain points we just mentioned were resolved. But as Sheena at Eaze remembers it, then more problems happened.

[Sheena Shiravi]
So you have your favorite dispensary, they do deliveries, they’re great…You can look online for the menu but then you had to call, place your order, sometimes, they answer the phone, sometimes, they don’t…Sometimes they’re actually there in an hour and a half. Sometimes, it takes two or three hours…. It was kind of like when you’re waiting for Comcast, you have to take the entire day off to deal with the cable person coming versus having an app and knowing exactly what your ETA is. You’re getting a text when the driver is close. It’s a much more convenient process.

[Mio Adilman]
The app was Eaze, and it launched in San Francisco, in 2014. And when it did, cannabis went digital.

[Ann-Marie Alcantara]
Eaze definitely benefited from the Silicon Valley, San Francisco startup culture.
Hi. My name’s Ann-Marie Alcantara. I’m a tech reporter at Adweek, and I’m mostly focused on eCommerce here. A lot of companies like this start testing out in San Francisco first because there’s already an appetite for it…

[Mio Adilman]
But unlike most digital companies, Sheena at Eaze says they had to deal with a pretty major obstacle.

[Sheena Shiravi]
Typically, when a tech start-up launches, they’re able to grow using Google AdWords, using targeted advertising on Facebook or building their brand through Instagram. None of those avenues were available to us as a company in the cannabis space. Unfortunately, cannabis was still considered a vice in the vice clauses for kind of companies like Google, even Apple.

[Mio Adilman]
They weren’t even allowed in the app store! How do you overcome that?

[Ann-Marie Alcantara]
They’re going back to the basics, which is very interesting to watch as someone who works at Adweek, marketing is going all sorts of different paths and they’re like we’re just going back to what we know and what works. It’s always worked. Like billboards…and other companies are also using the most basic forms of marketing which is word of mouth.

[Mio Adilman]
What Ann-Marie means is that customer experience was gonna be key to Eaze’s success.

[Ann-Marie Alcantara]
There’s definitely more of an emphasis on customer experience..because if you don’t have good reviews or if people are upset about glitches on the app or something, that’s your whole business.

[Mio Adilman]
OK, I get it, but this takes us back to my question: How do you create customer experiences for something that used to be illegal? There wasn’t exactly a big playbook to refer to…So from what I can tell, Eaze came at it from a few different angles. The first one we’ve already been discussing: the product experience.

[Ann-Marie Alcantara]
No joke, I had a friend once order it; seven minutes later it was there, and we had ordered food as well, and the food was still being prepared according to the app… and that kind of experience is also great for customers. It’s fun. We’re all surprised like, “Oh, wow. This is quick. Maybe I’ll do it again,” you know?

[Mio Adilman]
On-demand means you can get cannabis when you want it, which is key. Eaze actually took that a big step further during the era of medical cannabis. Remember, you didn’t have to prove much in the way of illness to get a medical marijuana card but it was an extra step.

[Kimberly]
Hi my name is Kimberly, and I live in Sacramento, California… I’ve had chronic back pain for almost as long as I can remember.

[Mio Adilman]
For Kimberly this meant a steady diet of painkillers. But they were starting to take a toll on her body.

[Kimberly]
In the beginning, there was a lot of skepticism. I think that skepticism came from just growing up with the stigmas that are marijuana and so there was a lot of like, “Do I do this? Is this OK?… At the time that I got my card they offered the service of talking to a live doctor online…The sign-up was superquick. They asked you a few medical questions and I filled out the paperwork in less than five minutes. The doctor called in less than five minutes. And from the beginning of the phone call to my first delivery, it was literally like 45 minutes…I was just blown away by the process.

[Mio Adilman]
This was huge for Eaze. The program was called EazeMD, and it was a perfect example of how the company’s digital platform could enhance the product experience. But then something else happened that was a total game changer.

After Colorado, Washington and a few other states, California legalized recreational adult-use cannabis. Proposition 64. The Adult Use of Marijuana Act. The new law went into effect January 1, 2018. And it was a big business opportunity for Eaze, but it also represented a pretty big shift in the business itself.

[Sheena Shiravi]
We all always saw cannabis as a medicine and you know, it went from being medicine to a wellness tool…

[Mio Adilman]
Patients are obviously still using marijuana medically, but now you don’t need a doctor’s note. Any adult in California can get it. Cannabis is recreational. So time to party, right?

[Sheena Shiravi]
You know, we don’t see kind of recreational, as kind of recreational really. We think that, again, we see it as a wellness tool, and we see that consumers as they’re becoming more educated about cannabis realize that even if they thought they were using it recreationally, they’re actually self-medicating really. The breakout star of 2018 is CBD. You know it’s this non-psychoactive part of cannabis that people are just starting to learn about. We’re about to launch a bath and beauty line on our menu. Just topical products like anti-inflammatory, there’s a chapstick, there’s an eye cream.

[Mio Adilman]
After making itself this indispensable tool for medical marijuana patients, Eaze wasn’t thrilled about just catering to the party crowd. They felt there was much more to the. I mean, they’d spent a lot of time stressing that. So they’ve gone down the wellness path. But this shift has created other fascinating challenges.

Even though the state of California legalized cannabis, all of the regulations surrounding it are decided by each town or county. But these local governments didn’t actually know much about it. Apparently, no one was really tracking customer patterns when medical marijuana was a thing.

[Sheena Shiravi]
As a technology platform, we really saw one of our greatest strengths was our data.

[Mio Adilman]
In this series, we’ve talked a few times about how customer-focused companies are using data to hyperpersonalize the customer experience.

[Sheena Shiravi]
We find that, you know, showing who the cannabis consumer is really helped brands understand how to target their products to different audiences.

[Mio Adilman]
But the really interesting stuff relates to the lasting legacy of the history of cannabis as an illegal product. It’s one thing when you or I experience some of that stigma, as individuals, but a whole other issue when it informs government decisions.

[Sheena Shiravi]
So, one of my favorite anecdotes of how we were able to use our data to help regulators was in L.A. last year when they were trying to figure out how to regulate business hours. And I think one of the first and early drafts wanted to close cannabis businesses at 6 p.m. Now, the whole point of regulating this industry is not that it didn’t exist before but actually to bring it above ground, to take away from the illicit market…So you know, if your goal is to diminish the illicit market, closing your cannabis business at 6 p.m., we were able to show that that wasn’t the best idea. We were able to show that actually, the majority of our deliveries happen between seven and 10 p.m., that’s where the spikes are and that closing cannabis businesses at six would actually continue to service the illicit market.

[Mio Adilman]
And even though the illicit market might be shrinking, it still represents a challenge to companies like Eaze.

[Ann-Marie Alcantara]
One of the biggest challenges Eaze has faced, to be honest, has been that they’re mostly a white company, and the cannabis industry has been trying very hard to rectify the fact that there are…thousands of people incarcerated for selling, distributing, and consuming cannabis, and a lot of them are people of color.

[Mio Adilman]
Like Ann-Marie at Adweek says, the war on drugs caused some pretty deep social and economic inequality. Stuff that Eaze, and other cannabis companies would have to deal with, if they wanted to connect with their customers.

[Ann-Marie Alcantara]
I think they do think twice about what does it mean for me to be consuming it, for me to be buying it, and is anyone doing anything to help people who have been wronged by this before?

[Mio Adilman]
Eaze does this in many ways, but from a customer experience angle, the company has helped its customers around the issue of expungement. Some California cities have started clearing people’s records of crimes that are no longer considered crimes with the legalization of cannabis.

[Sheena Shiravi]
We have helped host expungement clinics where you’re paying for the lawyers and you’re doing the community outreach to make sure people know about it and are attending. That sort of stuff, yeah.

[Mio Adilman]
So that’s a lot of stuff. While they refine the immediate customer experience of using the app, Eaze is also tackling the broader societal experiences related to cannabis. Stuff most other consumer packaged goods companies will never have to deal with, even as they disrupt traditional industries. Much of this, for Eaze and other cannabis companies is brand new territory.

And cannabis in general is also brand-new territory for millions of potential new customers who are starting to check it out in all of its many new forms. I mean, I used to smoke a lot, I thought I knew a lot about pot, but the list of products Sheena described earlier has me like you know, what? How? Huh?

[Sheena Shiravi]
So the big shift has frankly been education…when Prop 64 passed, immediately there was all these questions now about cannabis…you know, two of our fastest growing segments, as our data is showing, are women and baby boomers.

[Mio Adilman]
You know, it’s funny, we talked to a few customers about cannabis and they were all women, just like Kiki, the one who ordered delivery at the beginning of the show.

[Kiki]
I usually use it every night before bed as sort of a wind down, replacement for that glass of wine. Because that doesn’t work for me in my body. I find this much easier and healthier for me. But yeah, it’s a great wind down after the day and really helps me sleep.

[Mio Adilman]
They all described this process of either becoming acquainted with or reacquainted with this new world of cannabis. Where you know cannabis is replacing the glass of wine at the end of a day. And this brings us to how Eaze supports these new customers.

[Mick Frederick]
The biggest thing that I have to hit home, and I want people to know is Eaze support isn’t just support. It’s education.

My name is Mick Frederick. I’m the VP of the customer experience here at Eaze.

Having mostly worked B2B in my career assembling teams of technical support, this was one of my first B2C experiences where we were actually touching the end user and so I had to staff a little bit different. It wasn’t about hiring support people. I hired people that have worked in basically human jobs where their job was to interact with other people. That was point number one. Point number two, whether you smoke it or not, you needed to know a lot about cannabis. I didn’t care if they partook. My thing was, do you have the knowledge?

[Mio Adilman]
Mick joined Eaze several months before the rollout of legalization on January 1, 2018. No one was sure what was gonna happen.

[Mick Frederick]
What we did was we employed a call center, and we had them scaled by December to be able to offset a lot of the traffic we thought we were going to get…So we got our response time from one day down to less than a minute, and the company that we were using hired the way that we hired. They hired bud tenders, they hired people that were good at talking to people.

[Mio Adilman]
You didn’t have a call center before last fall? Is that what you’re saying?

[Mick Frederick]
Yep… It was primarily done through email, but there would be, somebody would mention Eaze on Twitter, and if it was a question about a delivery or a product, my team jumped on it.

[Mio Adilman]
That’s pretty remarkable.

[Mick Frederick]
Yeah. I came in with fresh eyes, and the response times were not up to my, what I wanted … For on-demand delivery, you need on-demand support…We had to cater to a sense of urgency that we never had before.

[Mio Adilman]
This urgency extended to the need for a knowledge base, another thing Eaze didn’t have before legalization. And they did it, in part, by listening to their customers.

[Mick Frederick]
Lately, what we’ve been doing with that documentation is creating help content… really, really juicy, impactful content for the customers to read if they don’t want to work with a human being for help….We had a customer who complained that one of their cartridges, the vaporizer cartridges, had leaked all over the place….One of our people was just like, “Well, yeah. She probably put it in upside down.” And I didn’t even think about that so, we created an article out of this very strange situation that happened with a leaky cartridge in someone’s purse that spawned us to be like, “Hey, this is the proper way to store your vaporizer pen if it’s a 510 thread cartridge.”

[Mio Adilman]
Mick’s team is broken into two sections. Straight up customer support, stuff like yo, where’s my delivery?

[Mick Frederick]
Then there’s another part of our group called Concierge. They are kind of like the virtual bud tender for new users and even really well-experienced users. We get a range of people from the two….the concerns lie in, like, “How do I do this?” This is for first-time users. “What is the best way for me to ingest it?”

[Mio Adilman]
And then there’s the baby boomers.

[Mick Frederick]
Most of the concerns are more about curiosity, like last time I smoked was a joint in 1979. Tell me about all this other stuff that’s on the screen…Another thing too is probably they would like to know how strong it is. We get that a lot. How long am I going to be high, basically?]…So, I was like, “We need to beat that to the punch. We need to be educational to people that have never done this before.” Tell them the difference between a Sativa and an Indica…It’s not just flower. Now, you can vaporize it. You can eat it. You can rub it on your skin in a lotion. You can take a tincture under your tongue. So, we educate about that, too, like, “Don’t let the stigma of buying flower stop you. There’s many different ways of doing it.”

[Mio Adilman]
So yeah there’s many ways of doing it, as I learned back at Kiki’s apartment, starting with her friend Annie.

[Annie]
My friend has back pain and she gave me some of that for my back pain and that was awesome.

[Kiki]
It worked?

[Annie]
Yeah. You rub it on your back and it makes you back high.

[Mio Adilman]
And then Kiki describes a way she’s used it, a way I will never get to experience.

[Kiki]
I got a lube once that had weed in it and it is amazing. So it gets your vagina high.

[Annie]
What?

[Kiki]
Yeah.

[Mio Adilman]
Ummmm. OK…

OK, you’ve been listening to Repeat Customer by Zendesk. A show about how customer-focused companies create great customer experiences. We post a new episode every two weeks.

If you’re looking to elevate your company’s customer service game, check out zendesk.com. Because the best customer experiences are built on Zendesk.

And you can learn more about this podcast at zendesk.com/repeatcustomer.

Thanks for listening.