5 Marketing Tips
- Don’t Make Definitive Statements
- Make Short Term Sacrifices
- Double Down on Email
- Leverage Affliates
- Use Influencers as Brand Ambassaders
Marketing a brand in the cannabis space is complex. Not only are regulations evolving at a rapid rate, but there are also limitations on what kind of advertising can be done. Traditional go-to channels like Facebook and Google ads are not available, leaving brand owners to have to get creative with how they get their brand in the public eye.
For example, in the CBD industry, there are over 1,000 brands currently operating in the US and not all of them are equal in quality. Most consumers are still newbies and will not be able to detect the nuances in formulation or quality. This makes marketing even more important as a differentiator to get your brand to the next level. Below are five tips to keep in mind when marketing your cannabis brand, with both legalities and opportunities in mind.
1. Don’t make definitive statements
CBD companies learned the hard way back in 2019 when the FDA sent warning letters to 15 CBD companies. One of the major concerns of the FDA was the language being used by CBD companies that used definitive claims. For example, claiming that your product cures anxiety or physical ailments is not recommended as CBD products have not yet been tested and approved by the FDA. Claiming any kind of therapeutic or medical benefit to a medical condition will get your product classified as a drug.
Instead, what you should do is double down on the qualities of your product that can be easily validated. For example, if your CBD is made in the US and THC-free, these are indisputable claims that can be easily proven with lab results. Doing so will help you avoid the complicated legalities of selling CBD and other cannabis-derived products.
2. Make short-term sacrifices
There are two key metrics you need to consider when getting your product to market. Customer acquisition cost (CAC) and customer lifetime value (LTV). Your CAC is how much it takes to acquire a customer initially and your LTV is the net profit contribution this customer will make towards your business in the future. Many companies get caught up on keeping acquisition costs low when in reality this is the time to make sacrifices.
Naturally, getting your CAC down to an optimal rate is ideal and can be done by spending on channels that can scale and have the right audience, such as industry-related PR, events, influencers, and brand ambassadors. Take a metrics-driven approach and keep in mind that customers in the cannabis industry are likely to return to a good product.
3. Double down on email
One of my first marketing lessons was that one email address is on average worth hundreds of random social media likes. Acquiring a customer email allows you to re-target them later with bundles, promotions, and time-sensitive opportunities. In fact, the average ROI for every $1 spent on email campaigns is $42. This is a staggering amount compared to other channels.
While anecdotal, my friends in the industry often cite email as being their most important marketing channel given the recipient is either already a customer or familiar with the brand. Email becomes even more powerful once you have data on purchasing habits and can craft special offers right when a customer is likely to need a new supply of products.
4. Leverage affiliates
Affiliates are partners that you incentivize to sell your product across their network and channels. There are hundreds of affiliate networks that cater to the cannabis industry. Not all are created equal. One important thing to remember is that affiliate commissions can vary anywhere from as low as 10 percent all the way up to 50 percent. When selecting an affiliate, make sure you have accurate data and expectations to help you navigate the agreed-upon commission.
Affiliates are another channel to take CAC and LTV into consideration as once a customer purchases a product, you retain their information. When negotiating a partnership, take into consideration the length of the agreement and the flexibility of terms. This will save you from many potential headaches in the future.
5. Use influencers as brand ambassadors
In 2018, many popular cannabis Youtubers experienced account shutdowns due to content restrictions. This has since eased as more Youtubers have turned to product reviews as a way to monetize their channel and help brands gain exposure. Getting access to these reviewers is easier than most imagine and can be done without cost. There are many Youtubers who will agree to an objective product review in return for free products.
When filtering results within the last year for “CBD Review” on Youtube, thousands of results appear. Many of these are suggesting benefits that would otherwise be in conflict with the advice not to state explicit benefits in your marketing. The beauty is when an objective and non-paid third-party does this, it is fair game.