There’s no doubt the CBD market is saturated. Hundreds of brands are jumping into the market at a rate that far outpaces the growth of the customer base. With crowded store shelves and dozens of D2C sites popping up, how do you get your brand to stand out and get noticed?
Grandview research shows that the CBD market, currently valued at $2.8 billion, will grow some 21.2% between 2021 and 2028. That’s a lot of herb, and a lot more competition. For your CBD brand to capitalize, it must easily stand out from the competitors and uniquely appeal to consumers.
Below, we’ll dissect brand building and positioning for CBD businesses and offer best practices for bringing your products and services to life.
What is branding, and why is it important for your CBD business?
Most people hear the word “branding” and immediately think of aesthetically-pleasing packaging. While this perception isn’t necessarily wrong, it fails to paint a holistic picture of the full-service brand marketing strategies, tools, and efforts poured into building your CBD business from the ground up.
Ultimately, branding and strong positioning will help distinguish your products, services, and overall brand from competitors. Branding helps create a unique, highly accessible, and relatable persona that shapes consumers’ perceptions of your business.
Branding shapes how consumers perceive your company and creates a unique and highly-relatable persona to help boost customer loyalty, recommendations, and sales.. There are different elements that help distinguish a brand, like logos, taglines, colors, tone of voice, customer experiences, and even fonts used in marketing pieces.
How can you build a strong CBD brand?
In today’s consumer-driven market, branding is critical for business success. However, it goes beyond having a logo and a tagline and can take a long time to develop. When branding efforts are not well-executed, the result will be undesirable and the investment a total waste. Therefore, as you attempt to build a brand that will last, it is essential to go about it the right way.
1. Know your audience
The first and arguably most important step in CBD positioning is determining who your ideal audience is. While it’s easy to assume that every CBD consumer is a potential customer, that’s simply not the case. Within the consumer base, there are varying segments, each with unique needs and profiles. By targeting a broad audience, you will not meet each segment’s unique needs, causing you to miss out on all.
Determine which segment you wish to target and niche-down as much as possible. Go beyond general niches such as wellness, health, recreation. Though this may seem like reducing your customer base, it will strengthen your grip on the target market you choose.
Once you have determined the specific niche you will target, understand their needs. This will guide product development, marketing, and branding strategy. In this process, you should seek to determine:
- Who they are
- Their problems
- Their experience with the problems they face
- Impact of their problems
- Emotional effects of the problems
- Where they spend their time
- Their mode of making decisions
- Other things they enjoy
From a branding perspective, your goal is to demonstrate to your target audience that you understand their challenges and have the ideal solution for them. For maximum effect, branding should evoke emotions to create a connection with your audience.
With a clear picture of your target audience, you should also customize your marketing strategy accordingly. Make sure your ads and content on your website reflect their unique needs and the solutions.
2. Know your competitors
Ideally, all entrepreneurs would prefer exclusive access to their target market. Sadly, that’s rarely the case, more so for CBD companies. The industry is rife with companies trying to increase their market presence. Some are much larger with more resources and market share, whereas others are startups hoping to carve out a market of their own.
If used well, competitors can be an excellent source of motivation that will spark your growth. This is why understanding and monitoring your competition is an essential aspect of CBD positioning. Competition may come in two key forms; direct and indirect. Direct competitors are those who offer similar products and target the same market. Indirect competitors are those who target the same market as yours but offer different products that can substitute yours.
Performing a competitive analysis will help you identify your competitors. Some of the methods you can use include:
- Keyword research
- Checking PPC ads that appear in search results
- Performing surveys
The goal of understanding your competitors is to gain insight that will help shape your branding and overall marketing strategy. Some of the things you should find out include:
- Their products and preferred marketing strategies
- Their price ranges
- The strategies they use to enhance customer loyalty
- Their distribution and delivery channels
- The number and caliber of staff they have
- How they leverage technology
- Their brand and design values
- How they interact with the media
Crucially important is to find out how consumers interact and perceive your competitors. This includes the products they purchase most, and what they see as their strengths and weaknesses. For each competitor, find out what makes them unique and their future plans.
A thorough competitive analysis allows you to identify methods of distinguishing your products and brand, giving you a competitive advantage. Other benefits of understanding your competition include:
- It helps minimize risk, as you will know whether your company and products are ready for the market
- Allows you to avoid costly mistakes
Understanding your competition is not a one-off event but a continuous process during the lifetime of your company. Staying up to date with their activities, innovations, and plans allows you to keep track of trends and changes in the industry early on.
3. Define your brand promise, and define it well
At the core of any successful branding strategy is a strong brand promise. This is not just the products you hope to deliver, but to set the precedent for consumer expectations when interacting with your company. Your brand promise should be embodied by your team and delivered through your products and actions.
Though the brand promise is an unwritten commitment, it’s one that you should never fail to deliver as customers expect it. As such, it should be aligned with the needs of your audience and your capacity to deliver. Evaluate your organization’s mission and vision and create your brand promise. Determine what you can consistently deliver time and again and what you are unwilling to compromise.
All these should be communicated in your messaging and interactions with partners and customers. An effective brand promise has five building blocks. These are:
- Simplicity: Unlike a mission statement that can be long, your brand promise should be short and just as catchy as a tagline with a bit more detail. Keep it at one sentence or two.
- Credibility: What you promise should be matched with what you deliver. Otherwise, the value of your brand will be diminished.
- Different: Essentially, a brand promise is a unique commitment a company makes to its customers. Therefore, it should be different from your competitors’ and goes beyond products, benefits and into the very essence of your company.
- Memorable: Before consumers remember a brand, it takes 5-7 impressions. Therefore, you should make it memorable to increase the chances of employees embracing it and for consumers to expect it.
- Inspiring: At the end of the day, the primary objective is to support your company’s business objectives. As such, it should have a marketing element to it that makes it inspiring to your customers and staff.
4. Create your brand positioning statement
It’s one thing understanding the market and developing a strong brand promise, and it’s another one altogether delivering it consistently. You’ll need something to guide marketing and branding efforts. This comes in the form of a brand positioning statement.
The brand positioning statement should provide a brief description of your products, target market, and your products to satisfy their needs. It should contain your CBD positioning strategy and clearly communicate your branding vision. A clear CBD positioning should communicate:
- Your ideal customers
- What you offer them
- How you offer the products
- Your objective for doing what you are doing
- How your products compare to others in the market
For your brand positioning statement to be aligned to your overall branding strategy, you must have a clear understanding of the following:
- Target market
- Challenges customers are facing
- Brand promise
- Brand values and identity
What are the benefits of branding?
Building a strong brand is a process that embraces many different elements. Though it may take several years before realizing any tangible results, it’ll definitely be worth the wait. In the long run, you will enjoy plenty of benefits that make the investments worthwhile.
1. Increased customer recognition
Due to increased competition in the market, there are plenty of products for consumers to choose between. In most cases, the quality of the products across different companies is fairly similar, especially for those under the same price category. As such, the purchase decision moves from a question of quality to the brands that are most popular and known for reliability.
This is why branding is essential for CBD positioning. It helps create an identity for your company and develop a connection with the market, making your company more recognizable. As a result, your products will not just be one among many, but the ones consumers opt for.
2. Higher customer loyalty
Getting new customers is always exciting. However, it does not necessarily translate to increased revenues. The best way to achieve stable and long-term growth is by increasing customer retention. Branding is especially an important tool for increasing customer retention. Data suggests that increasing customer retention by 5% can boost profits by up to 25%. In addition, 82% of organizations indicate that retaining customers is cheaper than acquiring new ones.
A branding strategy should be designed to address customer pain points and share in their values and beliefs. This helps create an emotional attachment between your company and customers, translating to increased loyalty.
3. Easier to introduce new products to the market
In the CBD market, there are many types of products that you can offer. To increase market reach, you may introduce new products, perhaps in the burgeoning CBD pet market growing at a compound annual growth rate of 40.3%.
For unknown brands, introducing a new product is just as challenging as launching a startup. On the other hand, if you already have a popular brand with a loyal base of customers, introducing new products to the market will be much easier. You will have a ready audience that trusts your company ready to try it.
4. Capitalize on word-of-mouth marketing
While we commonly spend boatloads on cross-channel product promotion, the most effective marketing tool is actually free. Compared to ads, some 92%, find that recommendations from friends and family are the most persuasive means of marketing. However, before consumers recommend your products within their circles, they must enjoy them and also trust and love your brand. If the most profitable form of marketing involves conversations, how are you getting people talking?
5. Lower price sensitivity
In commerce, it is a generally accepted principle that the forces of demand and supply dictate prices. When there’s a change in price, companies have to adjust accordingly. However, it’s not always the case, more so for small brands.
When prices reduce, small brands have to reduce theirs, at times below the market price, to remain competitive. Sadly, for the same reason, they are not able to fully capitalize on price increases. Renowned brands are, to some extent, immune or less affected by such changes in prices. This means they do not have to reduce prices as much when they lower, and they can capitalize fully when prices rise.
CBD positioning is non-negotiable
As the level of competition in the CBD market increases, it is essential for companies to forge strong connections with consumers through branding.
Big Sea is a digital marketing company specialized in CBD positioning. We offer a wide range of services that enable you to reach and develop meaningful connections with your customers. Contact us today for CBD digital marketing that will set your brand apart from competitors.