Why Branding is Vital for Cannabis Startups
Applying traditional marketing techniques in the emerging cannabis industry makes some new business owners cringe. In a marketplace that evolved quickly and is accustomed to relying on word-of-mouth as a primary marketing strategy, tactical brand building can seem daunting and even artificial.
As the industry grows and reaches a wider consumer base comprising both recreational and medicinal users, however, brands will be vital to sustainable business models. Not only will smart branding enable emerging businesses to find the customers who will benefit from their product and service, it will keep them afloat in an increasingly competitive space.
Branding builds the groundwork on which new businesses in any industry can grow and flourish, but marketing strategies must be targeted wisely, or resources can be wasted. Successful branding means accurately portraying the given product/service and appealing to potential customers, while also ensuring the company name remains fresh in the minds of adopters.
New customers to businesses in the cannabis industry can be incredibly fickle, as loyalty is something that must be built, so focus is necessary to those seeking sustainable leadership. This is true across many industries such as retail, manufacturing, horticulture and technology. Investing in relationship-building means fully engaging consumers and understanding what encourages them to act.
For those entrepreneurs underprepared for the industry’s fast growth, companies such as Cannabrand and Sinsemedia offer services that help them to fully develop their ideas and realize success by leveraging social media and branding to get the optimal customer reach. A recent article in Marijuana Business Daily suggested, “Cannabis companies interested in branding can look to other industries for examples of what works,” and this seems to be a good place to start.
Specifically, a targeted approach, as in any industry, is highly dependent on the application and product or service. Medicinal marijuana vendors and retailers may benefit from looking to alternative medicine approaches in the pharmaceutical or health and wellness industries. Those companies whose solutions suit recreational users, on the other hand, may take many approaches that mimic or borrow strategies from food and beverage, retail, or innovative tech companies.
Branding is said to be the most valuable asset a company has, but building a successful brand comprises more than determining the name and logo of a company. Branding also represents the product or service and defines customer demographic associations or perceptions of the company. The brand is delivered through advertising, packaging and communications; it is the catalyst of consumer relationships, so it is crucial that the brand is accurate and can build trust.
No matter how you look at it, companies that have been relying on word-of-mouth advertising alone need to step it up as the industry grows. They will need to develop strategies to endure market shifts. Dan Michaels, Founder of Sinsemedia, explained that customers require more than just marketing, and said his company offers more:
“We solve business issues while defining and capturing opportunities. Not only do we provide ‘traditional’ marketing and branding services, Sinsemedia also develops and creates new products and intellectual property for both ourselves and for our clients. We do not believe in the traditional client/agency relationship. Instead, we blur the boundaries between providing creative services and working as a business development partner. Some of these collaborations involve an equity partnership, which we’ve found leads to an incredibly successful dynamic.”
The partnership aspect may be the bridge between what comprised success to-date and what will comprise success in the near future and over the long-term. Companies do not need to misrepresent or bamboozle customers to gain loyalty, but they do need to attract and inform them, and this can get harder as more companies are vying for attention.
A company that has a strong business model and a valuable product/service can be devoured by competitors with similar offerings and strong brands. Although word-of-mouth will remain a valuable way of reaching consumers, the growing industry and subsequent competition—especially from big businesses trying to ride the momentum of this dynamic industry—increase the value of a strong brand and marketing strategy. Building a responsible brand can attract new end users and maintain trust with an existing audience.