October 5, 2018 Last updated September 30th, 2018 64 Reads share

Marketing Challenges in the Cannabis Industry

Image Credit: AdobeStock

With the tough competition, advertising restrictions, social media marketing bans and federal and state laws, offline marketing challenges for a cannabis business are not going to disappear anytime soon.  

And if you’re a medical marijuana business owner, you’re also probably in a constant battle to prove your legitimacy to the overall industry critics.    For this reason, you should be innovative in approaching this highly regulated industry to market your brand. It begins by knowing the major challenges that offline cannabis marketing faces.

The Effectiveness of Campaigns

Rules vary from state to state, so creating an effective campaign that will engage more customers is a major challenge for cannabis dispensaries, growers and other industry professionals.  So even with great marijuana deals, businesses might find it hard to realize their campaign goals – including its ROI.

Customer Engagement

With marketing campaigns comes customer engagement.  But it isn’t all easy, too.  Cannabis businesses should engage not only their current customers but also attract new ones – and it’s one of the few objectives of a campaign.

[With an effective one, you can drive more foot traffic to your store.  

And once a customer walks in to your store, the next challenge is how you must deliver quality customer service to increase your chance of capturing him/her as a repeat (or loyal) customer.]

Prevention of cannabis use and cannabis related promotions

It is another obstacle of cannabis businesses, so marketing offline becomes a more challenging because businesses find it hard to achieve customer loyalty especially with customers having many options today.

Remember, brands cannot just make a product to sell, but they also have to introduce innovation into their line of products or services while updating their marketing efforts. If not, a competitor or two will be able to do that and take your market share away. So brands should formulate  unique selling proposition, present exactly the one detail with which they stand out from the competition. This unique selling point should consistently correspond to the  general positioning, i.e. the corporate strategy.

Brands should do their homework, spend time on innovation and be more creative if they want to stay ahead of the game.

[Check out this image on the Current Cannabis Advertising, Promotion and Sponsorship (CAPS) Regulation around the world.]

Traditional Advertising Methods

Leverage the power of print advertising. It is one of the offline marketing techniques cannabis businesses overlook.   

Check out marijuana-friendly publications and submit an article on them (with a mention of your website). You can also make use of direct mail offers, such as marijuana deals that can send and increase foot traffic to your store.  

Bottom line: Don’t ignore the power of traditional marketing methods – especially in this highly regulated industry where offline marketing is the foundation of a great campaign.

Sponsorships and local community services

Both are effective cannabis marketing tactics. After all,   it is all about reaching out and making customers feel your presence in the real world.   The best part of it – these techniques offer the potential of positioning you as an industry leader.

Booking interviews, using public relations and finding media outreach opportunities, new and established brands can increase customer awareness and improve loyalty. Plus, there is word of mouth marketing, a benefit of sponsorships, events and community services.

And these are geared towards building consumer trust and changing their perception of the industry.  But to make it happen, you must tap on the power of community events and sponsorship now.

Offline vs. Online Marijuana Marketing: Which Brings Up More Challenges?

Let’s try to measure the return on investment of online and offline marketing for a cannabis business.  There is no doubt that event marketing is a great way of capturing new B2B leads (offline marketing). On the other hand, online marketing proves to be more valuable in engaging new and loyal customers (B2C).

But the lowest cost per lead or prospect was from email marketing, digital ads and SEO.  They’re part of an online lead development infrastructure that’s focused on converting visitors to leads – all on the business’ website.  Oppositely, the highest cost per lead was from trade shows, each totaling to an average of $15,000 – and that’s a small team with a small budget. And if you’d attend four and you’d walk away with a total of 200 leads per year, you’d spend $300/lead.    

That’s 200 times costlier than what you would have to spend on digital marketing, specifically on display advertising, costing only $1/lead vs. $300 on event marketing, based on this detailed example.

Bottom Line:  The above just factored in cost as the major challenge and which one is more cost-effective especially if we’re talking for small or startup businesses. The more challenge comes from offline marketing because cannabis professionals and business owners also have more options to market their products or services on the web than they do in offline marketing. But that is not to say that offline marketing is ineffective. In fact, it is the foundation of any marketing plan that you should not ignore.

Final Thoughts

The cannabis industry is profitable nowadays, but the industry is competitive too. Adding offline marketing to your marketing strategy is a good decision for your success.

Gaining a thorough understanding on the challenges of offline marketing for a cannabis business, you can take advantage of opportunities as they’re coming about, and definitely, seeking help from marijuana social media marketing, SEO and advertising experts online, offline cannabis marketing campaigns would become more fruitful. Combined, both channels contribute to its success – targeting more customers, building an established brand and increasing a company’s bottom line. 

Bjorn Wallman

Bjorn Wallman

Bjorn Wallman is the co-founder and CEO at Hazy Marketing, a specialized marketing agency catering to the cannabis industry. Founder and CEO at Once Interactive as well, he has 8+ years of experience in transforming businesses to digital. Also a designer, crossfitter, Liverpool FC fan and a tech geek.

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