Referral Marketing for CBD Businesses

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Personally, I'm an advocate of both pharmaceutical, industrial, and recreational use of cannabis.

I'm really happy that the stigma of using hemp products is fading.

The cannabis industry is booming, and of course, along with it comes the people producing their own, non-approved, products.

This fact, along with the constant war from big pharmaceutical and oil corporations, resulted in many big platforms (such as Facebook), banning ads for CBD products; which is a huge bummer, especially for new companies trying to enter the game.

I wrote an article the other day about how someone can market a CBD brand without paid advertising, and one of the ways mentioned was referral marketing.

Inside the article, I mentioned Messenger Giveaways as one of the ways to do it.

We came in contact with William for Warrior and we both agreed that we should expand a bit more about how CBD brands can leverage referral marketing (which is our specialty) to promote their products and drive sales.

Enjoy!

Why referral marketing for a CBD brand?
As I mentioned above, running ads for a CBD brand is not an option anymore.

Plus, I bet that if you're using cannabis products you know some people that use them as well (wink, wink).

About 82% of people consult their friends and family before making a purchase. This is a bigger percentage than the people who drink water daily in the US (76%).

This means that if people start referring your CBD products to their friends, your chances of making the sale increase drastically.

But by just deciding to run a referral campaign (or program) for your CBD brand, it doesn't ensure that it's going to be successful.

You need some sort of strategy.

You need to define a few things before putting things into work:
  • Incentives/rewards
  • Referral Mechanism
  • Lead nurturing

You have to approach your referral campaign as any other marketing experiment.

Let's expand a bit.

Incentives & Rewards.

Yes, if you offer amazing products it's very possible that people will refer you to their friends.

But trust me; this amount of referrals is not enough.

You have to find a way to encourage referrals, and what's better than offering a nice gift in exchange?

There are 4 ways to reward people for referring:
  1. Free Shipping.
  2. Discounts.
  3. Products.
  4. All the above together.

The first 2 kinds of rewards are pretty straight forward. Please earn free shipping or a discount for successful referrals.

A good tactic is to make the reward 2-sided, which means that both the referrer and the referee get a reward. This method was popularized by Airbnb which offered travel credits to both sides.



Now, if you decide to reward people with a product, you don't only have to find the right one, but also find a way to present it in a way that's attractive to people.

How do you do that?

Let's say for example that you're willing to give away some CBD oil.

If you already have an existing database of customers, you can pick one of the best selling products.

If you want to use another approach and rediscover what people interested in CBD products are looking for, this is where your keyword research skills come in hand. If you have no such skills, you don't have to worry as I've already covered everything you need to know in our keyword research for eCommerce article (which by the way uses CBD oil as an example).

I'll try to sum things up for you here as well.

Go to Google Trends and search for "CBD oil". Scroll down and take a look at the related topics and queries.

As you can see, one of the related topics is "Anxiety-Emotional disorder".



This could be a nice start. You can create a bundle pack of CBD products that treat anxiety problems.

You can also try to search your main query in Amazon, and see how other people present their products.

These are the free options that you have, but you can also use an SEO tool like Ahrefs to make more advanced research.

More or less these SEO tools work in the same way, so the process is rather simple:
  1. Insert your main keyword- CBD oil in this instance.
  2. Export the results.
  3. Sort the results based on Keyword Difficult (optional) and search volume (the more, the better).

The procedure will provide you with a list of keywords that will help you understand what people are really interested in, thus you can give offer more suitable rewards.

Choosing the Referral Mechanism.

I don't want to waste your time explaining all the different types of referral campaigns existing, so I'll just present the best options - according to my experience, you have.

There are 2 types of campaign you can run:
  • A Giveaway.
  • A Milestone referral campaign.

How do you choose the right type of campaign for your needs?

It depends in what you're willing to offer to your campaign's participants. If you choose to offer only one reward, you should go with a viral giveaway.

On the other hand, if you want to offer multiple rewards, you should try the Milestone Referral approach.

How the mechanics work

For a Viral Giveaway, every time someone participates, they get 1 entry. Every time they refer a friend, they get additional entries increasing their chances to win the prize.

Recently, Beardbrand run a viral Giveaway offering free grooming products for a year.



For a Milestone Referral campaign, things are a bit different as you'll have to offer multiple rewards.

First, you have to decide how many rewards you'll offer and how many successful referrals are required for each reward.

Let's say you decide you want to offer 3 rewards:
  1. Free Shipping- 1 successful referral.
  2. 25% discount- 3 successful referrals.
  3. Free anti-anxiety bundle- 5 successful referrals.

This is the approach that Joeywears used during their pre-launch period.

Choosing the right platform to run your Referral Campaign.

Traditionally, referral campaigns use email as the main platform to generate and nurture leads, but recently we (Viral Loops) created a new way.

People buy from their phone more and more, and Messenger is an app that almost everybody with a smartphone has installed.

That's the reason we decided to create both our Giveaway and Milestone template for Facebook Messenger.

I'm not trying to do any hard promotion here, but we're the only available option for referral campaigns on Facebook Messenger.

If you want to know exactly how these templates work, let me know and I can do a case study article breaking down all the steps.

Whether you choose to run your campaigns the traditional way (gathering email addresses), or on Facebook Messenger (gathering Messenger subscribers), the mechanics work the same, but every platform has its pros and cons.

Messenger Pros:
  • High Open & Click-through Rates.
  • Personalized communication.
  • Access to lot more data without any touchpoints.
  • Build audiences for Ads quickly and easily.
Messenger Cons:
  • You can send bite-sized content only.
  • Not an owned marketing asset- It means it's around only for as much as Facebook is around.
Email Pros:
  1. It's an owned asset.
  2. No need for bite-sized content.
  3. Build audiences for Ads.
  4. People are used to marketing newsletters.
Email Cons:
  • Lower engagement rates than Messenger.
  • We need more touchpoints to gather data.
  • It takes more time to segment your users.

Distribution

Since you choose the type of campaign, and the platform you're going to use, you have to build your campaign.

Let's say you've built it; now what?

I don't want to disappoint you, but it's very possible that people will not start flooding your website and referring like crazy.

You have to come up with ways for people to discover your referral campaign. Let's discover some of your options:
  • Create a landing page for your campaign.
  • Place widgets on your website.
  • Post on social media.
  • Send newsletters.
  • Run paid advertising.
  • Post in relevant communities.
  • Create content about it.

The best place to start is your existing customer base or the people that already visit your website.

It's very possible that you have a Facebook Pixel on your website (if you don't, please install it). That means that you can re-target your visitors with ads about your campaign.

Your campaign's landing page should have a carefully crafted copy, giving a clear explanation about how your campaign works, and a strong Call-to-Action.

The same applies for your newsletter or email sequences; you can craft an email that will be delivered to your existing customers communicating the message about your referral campaign.

All the email platforms out there have features for building automated emails. You can build an automated email that is triggered 2 days after a customer's 1st purchase, for example.

This is what The Hustle did.



Now considering the communities in your niche, I know it's very tempting to go to Facebook Groups and Subreddits and start promoting it, but this might do more bad than good. People hate to be spammed, and communities are all about providing and receiving value.

So, before posting in a community about your referral campaign, make sure you're already active in the community. If you're not active in any community, see this as an opportunity to start doing it. You'll learn more about your audience, and you'll also network with other people in the business.

Before you go.
Let's recap the step you have to take for CBD referral campaign:
Choose the number and types of reward.
Decide on the type of referral campaign, and platform.
Build the actual campaign.
Come up with a distribution plan and start promoting your campaign.

In case you have any questions, I'll be more than happy to answer everything, so just leave a comment below.

Keep being awesome.
#businesses #cbd #marketing #referral
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  • Profile picture of the author jameessmiithh
    Thanks for sharing. I found a lot of interesting information about CBD Business here. A really good post, very thankful and hopeful that you will write many more posts like this one.
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    • Profile picture of the author Nikitas Filosofof
      Originally Posted by jameessmiithh View Post

      Thanks for sharing. I found a lot of interesting information about CBD Business here. A really good post, very thankful and hopeful that you will write many more posts like this one.
      Appreciate it James

      Originally Posted by webbusineses View Post

      I think email is serving as a mainstream channel for spreading the words about the products in this niche, I've worked with a client in the past that belong to this niche. I think most people weren't aware of the potential of messenger marketing in this, it would help them explore a new way.
      Thanks for noticing, Messenger is a very valuable upcoming channel only if you use it right tho!

      Originally Posted by John Jonas Phil VA View Post

      I think this strategy can work with a good number of industries. I like how it rewards loyal customers over influencers.
      That's right John, and this is why we consider it a great and agile strategy!

      Originally Posted by Medon View Post

      An interesting post on CBD, Unfortunately, it was long and did not have time to read the whole of it. Anyway, I need to do more research on messenger marketing to see how to leverage the strategy when selling other products.
      Happy we got you interested in messenger marketing! To help you with your research I'd suggest to:

      - Check out this complete guide from Manychat (https://manychat.com/blog/ultimate-g...book-chatbots/)
      - Visit (https://www.schoolofbots.co/welcome) where there is a lot of free content and a very helpful Facebook group.
      - Search Warrior Forum and even our blog if you want.

      Originally Posted by shivanshu digibask View Post

      thanks for sharing useful information. this information is very helpfull for me. I enjoy reading the post
      We are very happy that you found it helpful.
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  • Profile picture of the author webbusineses
    I think email is serving as a mainstream channel for spreading the words about the products in this niche, I've worked with a client in the past that belong to this niche. I think most people weren't aware of the potential of messenger marketing in this, it would help them explore a new way.
    Signature

    Email Marketing & Lead Sourcing
    https://www.fiverr.com/users/adnanavailable

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  • I think this strategy can work with a good number of industries. I like how it rewards loyal customers over influencers.
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  • Profile picture of the author Medon
    An interesting post on CBD, Unfortunately, it was long and did not have time to read the whole of it. Anyway, I need to do more research on messenger marketing to see how to leverage the strategy when selling other products.
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  • Profile picture of the author shivanshu digibask
    Banned
    thanks for sharing useful information. this information is very helpfull for me. I enjoy reading the post
    {{ DiscussionBoard.errors[11530256].message }}
  • Profile picture of the author grandstar
    Why not simply use network marketing to achieve the same result? The only minus I see with network marketing is that the monies paid to the distributors and their downlines will be added unto the product and will therefore lead to it costing more than the competition.

    This however shouldn't be a problem as MLM companies always claim their products are of the highest purity/quality and therefore worth the extra cost.

    Also, the passion which the marketers push the product ensures fast and speedy sales. I am sure if perfected, sales can easily hit a $50m a year within 2 years.
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    • Profile picture of the author wentzco
      Originally Posted by grandstar View Post

      Why not simply use network marketing to achieve the same result? The only minus I see with network marketing is that the monies paid to the distributors and their downlines will be added unto the product and will therefore lead to it costing more than the competition.

      This however shouldn't be a problem as MLM companies always claim their products are of the highest purity/quality and therefore worth the extra cost.

      Also, the passion which the marketers push the product ensures fast and speedy sales. I am sure if perfected, sales can easily hit a $50m a year within 2 years.

      It really is a fallacy that if you move a product via network marketing that commssions paid to distributors/reps will cause an increase on product price. There are several network marketing companies marketing CBD and the prices are similar to non-MLM company prices. As I'm in a CBD network marketing company... I also see many customer purchases who aren't affiliates/reps. Non-MLM companies have higher marketing costs pushing their brand and that has to be built into product prices as well.

      It is true that "some" MLM company products actually are of higher quality. Our company was one of the first 13 CBD companies awarded with the high-quality seal by the U.S. Hemp Authority. Safety & product quality should be a concern for everyone if you are a marketer or a consumer. The FDA is going to be a very busy bee with CBD exploding into a mega-billion dollar product category. Medical claims, product safety/quality issues, product labeling, etc. - they will have to police 30x more companies at this time next year.

      As far as a MLM company selling CBD hitting $50 Million within 2 years if the marketing system is perfected... you are correct. I say that because the company I'm with started selling CBD products in the May 2017 with 2017 sales hitting $9.6 million. 2018 sales hit $100 million which is around a 900% increase. That's the largest CBD company in the US sales-wise. It's the online system which real has pushed sales as it has attracted people (like myself) who didn't want to do traditional network marketing with constant meetings, 3-way calls, etc... .
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  • Profile picture of the author sgalla414
    What a great post for people not only in CBD but in other "hard to market" or "taboo" industries.
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  • My cousin work on CBD market he had his own lab.. maybe i can ask him whats the best way for that thing! By the way im new here..
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  • Profile picture of the author newxxx
    definitely not legal yet in iowa
    Signature
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