WHAT WOULD YOU DO IF YOU WERE NEVER ALLOWED TO ADVERTISE AGAIN? Most brand leaders would freak out because their playbooks are predominantly paid media. But cigarette brands as far back as the 1960s have been wildly successful despite public health concerns that drove regulatory changes to the way they advertised. Gone were Joe Camel, endorsements from old white men in lab coats, celebrities laughing with a smoking dart on their hands, and our beloved Marlboro Man (may he rest in peace).

Most would agree that these restrictions were for the better, preventing cigarette companies from targeting youth or glamorizing an unhealthy habit. But the tobacco industry had a giant head start so their businesses did not suffer much. Major tobacco brands were already cemented into the cultural landscape, and brand pref-erence was passed down generationally, from father to son, stolen out of half-smoked packs on the way out the door to high school parties. The lack of advertising barely slowed these megacorporations, and certainly failed to kill the industry.

ENLIGHTENMENT SERIES

© 2018 Cult Collective LP

Disruptive thinking for challenger brands.

October 2018

CannabisHow to Grow

(Brands)THRIVING IN AN INDUSTRY WITHOUT ADVERTISING

But what happens when a burgeoning industry gets sty-mied with similarly austere regulations before brands even have a chance to introduce themselves to consumers? With the legalization of recreational cannabis looming, many traditional marketers are struggling to navigate the restrictions that will be placed on their marketing commu-nications before they even sell a gram of recreational bud.

WHAT ARE THE IMPLICATIONS?Marketers the world over have adhered to an almost single-minded focus on new customer acquisition, with the favourite tactic in their playbook being paid media and costly promotions. But, at least for now, marketers in the cannabis industry have their favour-ite tools strongly restricted or removed entirely from their toolbox. Like it or not, it appears the government is cautiously proceeding with legalizing marijuana for the recreational market with strict guidelines about how, and where, products and brands can be promot-ed. And massive platforms like Google and Facebook (which comprise over 90% of digital advertising) main-tain their stance on preventing promotions in this space.

However, Cult is undeterred by these limitations on tra-ditional advertising approaches. Success for cannabis brands is no different than how success for most “cult brands” is achieved. What’s required is a heightened em-phasis on customer loyalty and advocacy, and flexing other muscles that many marketers are not in the habit of flexing.

Fortunately, there is an enlightened path to follow, one that we at Cult have been studying and guiding coura-geous brand leaders through for years.

During the opening months of legalized cannabis, the excitement and anticipation among consumers is going to drive a lot of trial. Retailers and LP’s alike will have an opportunity to make a first impression on their key markets without having to pay for their attention through costly ads or bribery. The real challenge, therefore, will be to win the loyalty of those trial customers in rapid fash-ion before they migrate elsewhere, or before someone else does a better job and their first followers begin to advocate on their behalf.

Cult brands have been forging the way without relying on advertising for over a century. Starbucks was already a household name well before it launched its first mass media campaign. Lululemon succeeded in inventing a whole new category of apparel while spending a signifi-

cantly smaller portion of its budget shouting and bribing than its competition. Har-ley Davidson spends 85% of its marketing on owners, not on new customer ac-quisition. These brands win incredible amounts of affini-ty from their customers and eventually, transformational advocacy, to spur growth at incredible speeds—all by fol-

lowing a different path.

Myriad articles discuss alternative approaches to cus-tomer acquisition for cannabis companies, either by exploiting supposed loopholes in the regulations, or by pumping useless content to win SEO battles. Fortunately, there is an alternate path—one that may only be followed by a brave few, but if executed properly, will lead to a far more sustainable position and will more fully exploit this once-in-a-lifetime opportunity.

© 2018 Cult Collective LP

Fortunately, there is an enlightened path to follow,

one that we at Cult have been studying and guiding courageous brand leaders

through for years.

There are four critical considerations that all cannabis brand leaders must master in order to rise above the competition and build loyal followings:

I. AIM HIGHER THAN GETTING HIGHAudiences engage strongly with brands that they feel reflect values they hold dear. A sense of shared values is most easily conveyed through a clear and compelling purpose, one that extends beyond the drive for profitabil-ity or shareholder value. But just as the pursuit of money will fail as an inspiring ethos for your organization’s au-diences, so too will an overemphasis on helping people get high.

There is a lot of excitement around the legalization of marijuana, and inevitably this kind of froth will fuel initial sales and get a lot of people talking and thinking about getting high. But the industry will mature rapidly, and al-ternative use cases will develop quickly as previously uninitiated customer segments look more closely at can-nabis as a viable natural healthcare alternative, and as the once sceptical consumers begin to explore it as a healthier social enhancement than alcohol. Additionally, as further delivery formats are legalized, cannabis prod-ucts will have a greater presence at dinner parties, date nights and daily routines with an aim to enhance, rather than intoxicate. Your individual products can vary by seg-ment, but your house brand must have a noble purpose that is higher than getting people high.

Electrifying PurposeTesla has succeeded in growing an incredibly passionate group of followers, before many of them have even sat in, much less driven a car that Tesla has produced. While the company isn’t without its challenges, clearly it has struck a chord with its audience through a clearly articulated purpose manifest in creative ways throughout the brand experience.

II. START WITH YOUR TRUE FIRST FOLLOWERSOrganizations experiencing hyper growth -- technically defined as 2000% revenue growth year over year, find themselves doubling staff a few times a year. It is ex-tremely challenging to inculcate your brand’s purpose down through the ranks when this happens. Oftentimes, the things that made an organization special, the ele-ments of uniqueness that fueled the hyper growth in the first place, are lost within rapid hiring cycles.

This cannot happen for brands that are aiming to win the long race. Your staff represent your first level of ad-vocates in the marketplace. While the organization is bound by restrictions on communication, your employ-ees are not, and many are personally connected to the consumer group after 5pm outside of the office.

The organizations that will come out on top in the ini-tial rush will do so with an army of non-commissioned “sales people” who’ve been properly indoctrinated from the outset about why their employer is the best option for the marketplace to buy from. Kindling this kind of fire among your employee audience relies on three things:

i. A marked decision from leadership to invest in internal engagement.

ii. A clear distillation of your organization’s purpose manifest in internal communications.

iii. Finally,properlyorientedhiring,firingand reward/recognition decisions around operationalized corporate values.

You cannot pay lip service to your employee engagement and still expect to win in a world without advertising.

III. SET A NEW STANDARD FOR REMARKABILITYNo one has set a standard for what a remarkable buy-ing experience is in the cannabis space. Certainly, a lot can be learned from other retail industries about cus-

© 2018 Cult Collective LP

As further delivery formats are legalized, cannabis products will have a greater presence at dinner parties, date nights and daily routines with an aim to enhance, rather than intoxicate.

tomer service, fulfillment expectations for online sales, loyalty programs and the like. The recreational cannabis industry offers an incredible opportunity to start fresh, de-signing what will fuel advocacy from your first followers as you elevate their expectations of what it’s like to buy weed in a store, as opposed to a parking lot.

Weave remarkability into every single aspect of your business, from your store design to your staff training. Reimage how your call centre handles complaints and recovery issues. Be intentional in how you usher first-time users into the World of Cannabis. Do something bold and buzzworthy with your online presence or your new product innovation. Leave no stone unturned in your quest to be remarkable. Because the only effective way to build an audience in this industry is to garner pos-itive word of mouth from your early customers, devoting an inordinate amount of effort in giving your early adopt-ers something cool to talk about.

Reinvented Retail MartinPatrick3 is a high-end lifestyle retailer that sells clothing, jewelry, furniture and housewares, among other things. To date, it has defied sta-tistics, creating a thriving bricks and mortar only business that is growing rapidly in an era of highly commoditized competitive substitutes and Ama-zon Prime convenience. Shopping in their store is an experience unlike any other. It features a col-lection of boutique-curated rooms, with an air of high-end hotel service and the sophistication of an art gallery all at once. Concierges help shoppers experience the store itself as well as experiences

in the city like restaurants, events and destinations and, for interested parties, ancillary services such as the barber shop, and event hosting have been added to round out what is truly a reinvention of the retail experience.

IV. WHEN YOU CAN’T SPEAK, YOU MIGHT AS WELL LISTENCult brands spend as much time, if not more, listening to their customers as they do talking to them. In order to foster real relationships, and better craft business mod-els that deliver exactly what your core audience wants, cannabis companies must deliberately collaborate with their customers. In the absence of a megaphone, the brands racing into this space will have to possess the presence of mind to listen, and develop the products, ex-periences and services that their customers want.

Instead of trying to grow followers, cult brands will endeav-our to follow, and create meaningful connections with consumers. Join the passionate communities that already exist, or build your own that align with the noble purpose of your brand. Release the ownership of your products, processes, and programs to your most loyal customers, and let them shape the brand. It’s certainly daunting to relinquish this kind of control to your audience, but Cult’s studies have proven it to be one of the most effective ways to generate strong bonds and powerful advocacy.

Let Them Build It, They Will ComeLego relies almost exclusively on their community to develop and launch new products. Through a Lego-branded community platform, passionate

© 2018 Cult Collective LP

© 2018 Cult Collective LP

fans are able to submit their own ideas and allow other community members to vote for the idea. Once a concept wins enough votes from the community, Lego puts it into a review phase, and then production, and does so with a high degree of confidence that demand is high enough for it to be profitable, developing the products that its customers want.

A final word of caution: If you are considering hinging your brand’s narrative around concepts of craft, organ-ic, or small batch cannabis the same way that niche craft breweries have done, be careful. Some LP’s will be able to make this work, but the premium prices that the craft approach typically coincides with is less likely to be as influential on an ignorant or sceptical audience—particularly without the help of unique, highly branded packaging in the in-store environment.

AN ENLIGHTENED PATHPolicies may change in the future, but for the near term, one of the most exciting things about this industry is the challenge it puts on marketers to do real marketing, in-stead of simply relying on mass media or markdowns.

Truly sustainable competitive advantage comes from the paradigm shift of moving the goal post from simple customer acquisition into loyalty, and eventually into the promised land of audience advocacy. Cannabis brands will be forced to follow this path, or languish in mediocrity.

That’s because the world’s most enviable brands—the brands with the most passionate followers and who rare-ly rely on advertising to grow their businesses—believe and behave this way. The current regulations, though heavy handed, will force cannabis brand leaders to do what they should be doing regardless of the legislative climate: aggressively pursue the enlightened path of building healthy, remarkable, cult-like brands.

Undoubtedly, a few brave organizations, led by fearless leaders, will rise above the fray and leave their mediocre peers scratching their heads wondering why they aren’t relishing in the rich rewards of an engaged audience.

Which leader will you be?

THE PATH TO ENLIGHTENED MARKETING STARTS HERE. Cult Collective helps brands win a sustainable competitive advantage by focusing on proven platforms that drive customer and employee engagement, and forge fanatical loyalty.

Learn how we keep brands relevant and remarkable by visiting us at cultideas.com or email us at enlightenme@cultideas.com

Owen Reader Owen Reader is a Chief Engagement Officer at Cult where he leads strategic outputs for the firm and expertly guides organizations through the fundamental changes required to surpass their peers and create meaningful (and sustainable) competitive advantage. e: owen@cultideas.com t: @CultIdeas