Four Steps to Give Your CBD Business a Competitive Edge
By Elizabeth Michael
“If it was easy, everyone would be doing it,” the old idiom goes, but here we are … with everyone doing it … and it’s not easy. “It” being selling CBD. After the passage of the 2018 Farm Bill and to meet surging demand, many entrepreneurs shifted their gaze to the CBD space. Now, in 2021, there is a glut of CBD on the market, and it is extremely competitive. Almost every small business possible to shop offers CBD in some form or another. Many that jumped to farm shifted to vertical integration in an effort to move their raw product. With loads of raw CBD on the market, it makes more sense for them to sell it directly to the consumer where the profit margins are better. That means a lot more brands are vying for CBD consumers’ time. Many CBD brands may be struggling with these new competitors, and these new competitors may be struggling to break through. Like sales, competition is at an all time high.
The good news is the audience is there. Whether it be a tincture or topical, edible or bath bombs, CBD enthusiasts can purchase products from their local yoga studio, gift shop, chiropractor and convenience store. By 2025, CBD products are expected to reach $6.9 billion in sales – a threefold increase over five years.
For brands that want to make sure they are around to reap the anticipated 2025 reward, now is the time to future-proof your business. Here are four concrete steps you can take to give your CBD business staying power.
Find the perfect match
As the market settles, it becomes more and more important to find your product-market fit. Not all segments will want topicals. Not all will want edibles. Some plant genetics lend themselves to certain extraction methods or product types. Knowing your strengths and weaknesses will lead you to your ideal target market, and that oasis is where success thrives.
First, clearly define what makes your product stand apart from the rest. Don’t try to be everything to everyone. Hone in on what makes your product special and tell your brand story exclusively to the audience with which it resonates.
Do not waiver. Don’t waste your time with generic messages. Be purposeful in building the relationship with your perfect audience.
Delight customers at every turn
Give them more than they are expecting. Create a unique experience for your in-store customers with interactive, educational and entertaining brand experiences. Whether it be a POP tablet with a quiz or augmented reality labels, a little something extra will create a shared experience that will not be soon forgotten.
Online, surprise shoppers with exclusive discounts or educational content that ingrains them more with your mission and keeps them entertained and engaged with your brand. Be sure to make sure your packaging and branding is on point and an extension of the brand introduction and promise you made online. That is the first physical interaction you will have with your customer – it is when the relationship becomes real. Put a sample gift with purchase, or other sort of extra in the box. If your company has the manpower, include a handwritten thank-you on the packing slip. These extra touches convey trust, goodwill and confidence. One example that is relatively low cost and easy to include is a postcard note in every box with a sheet of designed and branded stickers. Instead of giving them a piece of branded swag they didn’t ask for and probably don’t need, this will empower them to mark items they use in their everyday life with your brand via the sticker. Whether it be their laptop, hydro flask or cooler, your brand will mark its spot on their daily lives. Plus, we hear that swag is bad for the environment.
Winning CBD brands will need to be on top of their digital touchpoints to gain ground on their competitors. Start with a digital audit. Document all your digital touchpoints like your website, social media and review sites. Make sure they are optimized to fit your brand goals and the purpose of each platform. You may need to change your Facebook Page template. Or, maybe you need to make sure you have Google Analytics set up to report on website traffic. It’s 2021, so it may not be worth saying, but you would be surprised – make sure your website is responsive (that means it works well on any size of screen). After you have completed your audit, set your goals. Maybe it is to increase website traffic by 50 percent. Or increase engagement on social media. Make sure your goals are realistic and attainable. Write them down and hold yourself accountable.
Organic efforts will only take you so far. Consider paid advertisements to lift your brand message. When deciding where to deploy your funds, remember your perfect match audience. Be sure that your paid ads talk to them in the right way at the right time and on the right channels.
The first thing you should do is thoroughly understand the policies and guidelines regarding CBD of the media company with which you are considering purchasing ads. Some allow ads outright, others, like Facebook and Instagram, limit ads to only topical products. Some do not allow CBD ads at all. Our media director here at Bud Agency reports that some companies have accepted and launched ad buys only to take them down a few weeks in for seemingly no reason.
Consider advertising on CBD-friendly sites and networks that allow robust targeting or access to niche audiences, like Snapchat, Leafwire, Ganjapraneur, Leafly, Surfside, Vanna and Hemp Industry Daily. There are many options, and as the industry normalizes, more and more are accepting CBD ads.
Consider an influencer marketing program. Some influencers will want a contract and real-life money as compensation; however, others may consider compensation in trade and/or commission. You can either piece together an influencer program by hand, or you can hire a company that specializes in influencer marketing.
Four Steps to Give Your CBD Business a Competitive Edge
- Find your perfect match audience
- Delight customers at every turn
- Refine your digital touchpoints
Follow these steps, and your company can gain a competitive edge. Remember to be genuine with your intentions, honest about your product, and realistic about your growth. CBD success will not happen overnight, but by focusing your efforts, you will find your place in the market.