Marketing Cannabis as Challenge and Opportunity
In a rapidly evolving cannabis marketplace it is increasingly vital for businesses to stand out from the competition. But many cannabis businesses have a long way to go when it comes to building brand recognition, which is key to long-term success.
“Most businesses are not marketing or advertising effectively,” said Lee Weiner, president of the cannabis marketing company 7 Leaf Marketing, based in Denver. “Many think the product [cannabis] sells itself, or rely on their current customer base. That will have to change.”
Aligning sales and marketing efforts to drive up profits and revenue is key. Many new to the legal cannabis trade may not be trained in sales, and others fail to track the ROI of marketing campaigns, he said. “If you are not tracking the results, how do you know what is working? How can you improve? Closing the gap between sales and marketing drives revenue through the roof.”
First Things First: Branding
Just like in any other industry, those in the cannabis trade must build a “brand presence” that stands out from the crowd, and is recognizable, said Wendy Rall, founder and creative director of Budd Branding, a boutique design firm based in Joshua Tree, California. “This means having an unforgettable logo that is magnetic and different from what already exists on the market.”
The first step for building a brand is to determine the message a company wants to convey. “When a company is ready to launch a product or service, three questions need to be asked: one, what does that company represent; and two, what are that they are offering; and three, what sets them apart from the rest? These questions lay the foundation for building a brand,” Rall said.
As part of one recreational and medical marijuana dispensary company’s strategy to build a nationwide brand, the company underwent a name change, rebranding from Gaia to MiNDFUL last August. MiNDFUL has five locations in Colorado.
“We face similar brand challenges as any company plus many more given our industry’s strict advertising limitations, a lack of market data, and the decades of anti-cannabis propaganda,” said Meg Sanders, CEO of MiNDFUL. “So getting our story and message out there to support our brand is tough.”
Consumers are bombarded by constant messaging, and the name change reflects an effort to “rise above that noise to be heard,” Sanders said. “We changed our name from Gaia simply because Gaia is so overused. We needed a name that would carry nationally.”
The name change, in conjunction with other branding and marketing efforts, are helping to grow MiNDFUL’s client base, Sanders said, noting the company recently sponsored the Colorado Symphony Orchestra and is launching a new campaign strategy this month. “We have seen our customer count gradually rise with a very small effort.”
While state-by-state laws can impact various facets of branding and marketing, there are ways for those going national to remain consistent. “If a product could originate from one production facility and be distributed nationally, then it could contain the exact same information regardless of the state,” Rall said. “This means that all the packaging could be produced in the same print run, assuring national consistency in print color, package material and overall quality, making it not only better but more simple and economical for the brand owner.”
See Challenge As Opportunity
One marketing challenge is the diverse demographic of cannabis consumers, which is also an opportunity. “Products need to appeal to, and resonate with, a broad spectrum of customers—from hippies to hipsters—in a variety of locations,” Rall said. “Having to appeal to a broader demographic creates an opportunity for companies to market a product, or version of a product, in multiple ways and to different lifestyles.”
For example, a vape pen can appeal to both a 22-year-old female surfer and to a 70-year-old U.S. military veteran, she said. “But these individuals will likely be attracted to different presentations and packaging of the same product. This creates an opportunity for a company to successfully expand its product line, with minimal variations and costs.”
In addition, the lack of consistency among some cannabis and ancillary companies’ messaging efforts creates opportunity for those businesses that are marketing-minded.
“There are very few companies branding and even fewer branding well,” Sanders said, noting the company has brought on strategic partners to accelerate its growth. “Our success will depend on how quickly we can get our story told, especially to a new customer base. Right now, the industry is focused on fighting over the existing customers. That’s such a tiny percentage of the population.”
Businesses must do a better job of collecting data, which can be used to create targeted marketing campaigns and ultimately increase revenue. “In any other industry you can buy data of targeted prospects, but you can’t in the legal cannabis industry, yet, because it is so new,” Weiner said.
Companies can use automated marketing tools to help them collect and track client data. “Not having automated marketing is a huge detriment,” he said.
All direct marketing needs to contain a call to action that can be tracked at the store level. “I’ve worked with sales managers who can’t tell me how many people used a given promotion,” he said. “That’s a missed opportunity. Building your list will allow you to market to your intended demographic with target specific offers.”
As more states adopt legislation that supports the legal cannabis industry, business owners will have to become marketing-savvy to stay ahead of the competition.