The unique challenges and responsibilities that entrepreneurs face when entering the CBD market are beyond those of traditional startup founders. Trust is key in this rapidly changing industry that has incredibly variable product quality.
Federal legalization of hemp-derived cannabis in 2018 sparked a wave of startups eager to capitalise on this popular product. In the U.S. CBD sales grew significantly from $535m in 2018 to $7.8billion in 2018.
Despite the industry’s “Wild West” phase now, there are still some questionable sellers and products. To be successful long-term, brands must perform better than the average. To build a lasting brand, you must work diligently and proactively to earn the trust of consumers, media and government agencies. These are the three steps that will help you build trust in your brand.
1. Start product development.
Every product must be of the highest quality and true to its description, especially when it has bio-active effects. Consistency is key when it comes to CBD quality, dosage, and efficacy. This certainty can only be achieved by carefully evaluating every step of product creation and development.
CBD entrepreneurs need to build trusting relationships and visit farms to verify quality practices. All facilities must be ISO 9001 (International Organization for Standardization), GMP21 CFR, Part 111 certified (“Good Manufacturing Practices”), and FDA registered.
Strong relationships are also essential with your manufacturer who infuses the raw material into topical or edible products. Aside from reviewing the manufacturer’s certifications, I recommend that you engage a regulatory management consulting company to audit each facility and create a manufacturing agreement for IP (and liability).
Growth Stories: The New League Table
The UK is Fast-Growing However, what does it tell us about businesses?
The second part of the equation is found in the Russian proverb “trust, but verify.” After the product is complete, send the samples to a third party lab. They will provide certificates of analysis (COAs), which define purity and percentages. These reports can then be posted online for anyone to download.
These next steps are crucial, even essential. Without a reliable product, none of these steps or a lasting CBD brand can be achieved. CBD entrepreneurs need to put in the effort to create the best product.
2. Make your brand authentic and tell your story!
There is still much deceptive and ineffective marketing in this emerging industry. Fly-by-night companies often skirt Amazon’s ban on CBD products and call their product “hemp oil” or some similar. If Amazon does catch on, they may kick them off the site. Some brands will “brand burn” their products by changing the names and reentering online marketplace.
This is not what you should do! While it might make a quick buck, it won’t make you big or last long. This practice is highly untrustworthy.
CBD startups need to avoid marketing that is based on a trending commodity. You should not market your products as a solution to every problem a customer may face, but rather focus on a validated niche. This principle is not only bad or misleading marketing, but it can also attract fire from the Food and Drug Administration and Federal Trade Commission.
Communication and defining your company’s purpose and authentic story can help you avoid these mistakes. Simon Sinek said, “People don’t buy what you do, they buy why.” This is how you can avoid making these mistakes.
This framework allows you to tell your story through authentic content that is relevant to your niche. You can also get exposure via earned media from trusted outlets. Unfortunately, CBD ads are not featured on many paid-media platforms. However, I have found that these ads are much less valuable than honest reviews in trusted publications.
3. Concentrate on the customer.
Everything comes down to the customer and how they use your brand. Quality is the foundation of all product development. To build trust, CBD entrepreneurs need to engage with customers.
* Use customer surveys and other feedback methods to find ways you can improve. Trusted e-commerce platforms can be used to collect verified buyer reviews, which add credibility to product pages.
* Get testimonials or video from real customers about how your product has improved their lives.
* Display and achieve other objective trust indicators such as high Better Business Bureau ratings (BBB).
* Offer fast shipping and human customer service (no robots!). You can be sure that all your customers’ needs will be met with our 100% money-back guarantee. The Delivering Happiness book by Tony Hsieh, founder of Zappos, and its philosophy are excellent resources.
Every business needs trust. CBD is everything.
Some of the challenges facing CBD-industry may disappear one day, hopefully very soon. Smart government rules, self-regulation, standards that are accepted, wider marketing options, and customers voting with dollars will allow quality products and companies to rise to the top of an older industry.
However, CBD players, both new and established, must work harder to gain the trust that will benefit our industry, our customers, and ourselves. Even though there are some challenges, the steps above will still be good business practices.
Although there will be more quality brands, many of my colleagues are open to new players in the industry who share our values. Trust is the key to our industry’s success. A rising tide lifts all boats.
