If you’re building a new cannabis brand you’re likely feeling a few growing pains. First off, the industry is faced with a handful of hard-to-navigate, ill-considered (at least in the context of present day) regulations designed to govern cannabis marketing, from the packaging to the media placement.
Second, there are very real challenges in being able to finance growth, as traditional lenders are generally barred from underwriting loans for cannabis companies.
Third, most traditional media outlets remain squeamish about promoting cannabis products because of the current state of legal opacity around cannabis promotion, as well as the looming prospect of societal backlash. And fourth, all the while, deep-pocketed competition—big CPG players in health, wellness, pharma, and notably, beverages—are circling the industry like a shiver of Great Whites. But don’t let all those challenges deter you. The cannabis industry is desperate for the legitimization wrought through the introduction of better branding. If we want to change perceptions we—the cannabis industry—must grow up and away from the notion of the illicit to that of respected product and service, hence the need for better branding. As a cannabis entrepreneur, make it your rallying cry.
Sidebar: Canadian beer sales declined ~3% in Canada’s first year of legal cannabis (don’t tell the McKenzie Brothers) which has prompted a few beer brands to take a long look at cannabis. Why you ask? Millennials. Along with every other societal ill, Millennials now have to shoulder the blame for not drinking enough beer.
What We Can Learn From the Super Bowl
The Super Bowl with all its excesses, summons to mind grand visions of gridiron glory, glitz, glamour, and, of course, exorbitant advertising expenditures. With respect to the latter, this year certainly did not disappoint. Super Bowl LIV has come and gone, and the advertising numbers are in—the average cost per ad spot for this year’s game hit a cool $5.6 million. Which means, with an estimated game viewership of around 102 million, it equates roughly to a CPM of around $55 which is 50% more expensive than the cost of a standard primetime spot and a whopping 750% more expensive than your average Facebook CPM of around $7.19. Now think about, how can that possibly be a good investment? Additionally, and the point of this post, what might we take away from what appears to be an act of colossal frivolity when considering the prospect of building a winning brand for a cannabis venture?
Let’s tackle the former question first: how can that kind of price for an advertising spot possibly be worth the money? Well, that comes down to a little known concept called “signaling”, which is to say, the very reason those media spots even command that kind of money is because they come with that price tag. Huh? Ok, let me clarify. Think of it this way, the mere fact that buying a Super Bowl ad is a colossal public display of excess and waste is part and parcel to the point. Still confused? Consider the following…why do people wear flashy watches or drive ridiculously expensive cars? Or why do Peacocks sport showy tail feathers to attract Peahen mates? Signaling. These displays—from donning the Rolex to the Peacock’s tail—are meant to be conspicuous demonstrations of confidence, strength, health, vitality. To the Peahen, an elaborate tail says that that particular male comes with abundant resources, signaling that he can provide the best chance at survival. How does this tie back to the average cost of a Super Bowl ad placement? For a brand, being able to flush $5 million in a mere 30 seconds is one of the more confident demonstrations. Ads in general are like that—media placement, production value, so on and so forth—they say to the world something about the health (and bravado) of the company, and consumers process those messages subconsciously and make decisions accordingly.
Why good branding is so important to the budding (pun intended) cannabis venture
Like the Super Bowl ad, your brand messaging is saying something about your business. Which brings me to the second question (and the point of this article): what might be taken away from this lesson when considering building a strong brand for your cannabis business? Well, to be clear, it’s not that you should go out and misappropriate funding by spending it thoughtlessly on one insanely expensive media placement. Rather, it is that your brand messaging is signaling things to your consumers whether you like it or not; your choices are to either curate and define those signals or, alternatively, not to. But make no mistake, a strong brand could mean the difference between your cannabis business thriving and failing. Now you know. Don’t be feigning ignorance. Yet despite possessing this knowledge, business owners often operate under the misdirected belief that they don’t have the time to put effort towards building their brand. This is not to say it’s easy. As we’ve said, while there is growing societal acceptance of cannabis and with that change will come tremendous opportunity, the industry is still in its infancy and, at the moment, it’s a little like the Wild West. There are many many questionable enterprises, products and businesspeople trying to make a buck in cannabis. Of course, there are also a lot of good, honorable, reputable and effective ones too. So how does one separate the wheat from the chaff? Simple: branding. Branding is crucial in any business, but especially in cannabis. There is a whole new segment of consumers interested in cannabis for the first time. For any company to stand out, amid the noise and shadiness, it’ll need a strong brand promise and flawless execution. Consider the following:
- The power of the first impression: Research suggests that roughly 50% of consumers, consciously and unconsciously, assess the loyalty they’ll ultimately give a brand after only one interaction, whether that’s seeing a logo, using a brand site or reading a social post.
- Consumers hold all the cards these days: The world has gotten smaller and competition is closer than ever. These days, your stiffest competitor might be on the other side of the world (yet a mere click away to your customer).
- New brand exposures are at an all time high: The number of channels and platforms exposing consumers to new products and services is growing every day.
In short, you need a strong brand and you need it to stand for something that’s meaningful to your target customer. Building a strong cannabis brand will require thinking a little differently given the aforementioned challenges—media outlet reluctance, societal friction, financing challenge, etc.
So how do you build a strong cannabis brand in this environment?
I give you four fundamental lessons…
- Start with Your Brand Promise: Building a great brand means knowing what you want to stand for—your mission, your purpose—and then consistently delivering on it. That purpose must be woven into everything you do. Every single customer touch point. So be thoughtful in defining a brand promise and…
- How you’ll articulate it in a brand identity
- How you’ll deliver it with your marketing
- How you’ll deliver on it with your service and support
- Know Your Target Audience: Defining a brand promise starts with first understanding your target customer…
- Who they are
- Their age ranges
- Where they live
- What their interests and values are
- Their media usage
- Find Some White Space: Next look for spaces to differentiate, a white space you can own. White space is a brand concept that both resonates with your audience and, importantly, something no one else in your market is doing. You find white space opportunities by connecting with your customer directly—NPS scoring, surveys, one-on-one interviews and so on.
- Define Your Voice + Values: Finally, develop a genuine, authentic, trustworthy voice for your brand. Every great brand has a unique voice that embodies its specific brand values. It becomes the personality of the brand so the voice of your cannabis brand needs to reflect your values as it will ultimately define the space your brand occupies in the mind of your customer. Make it resonate so you stand out from the competition. A good first step in doing that is by building a team that reflects both your core values and your target audience. Then, from that point of departure establish your brand standards and guidelines to ensure consistency throughout all your efforts.