HOW TO DO A SUCCESSFUL PRODUCT LAUNCH IN THE CANNABIS INDUSTRY
Lately I’ve encountered several cannabis entrepreneurs with product launches who have told me they built this and create that, etc., and only NOW they are ready to start marketing. Backwards.
Business is not kumbaya and holding hands and dancing around a fire. Business is about winning and providing an awesome product or service. It’s also about making a profit. So when I see people doing a launch and then hoping it’s going to go well, that’s crazy. As a professional on the marketing end of the cannabis industry, I like to give myself an unfair advantage. Here’s an example: Let’s say a client wants to generate $25,000 in a launch. The first thing that client should be asking to see the math showing how we are going to get $50,000. Why? Because I have to assume that certain things are not going to work out, maybe someone is not going to open our finely crafted email, etc. So when you are doing a launch you never just go in hoping and praying for the best. That’s what amateurs do. The real top performers have numbers, they have assumption. With that said, the assumptions might be wrong but at least there are some assumptions and every time they go through them they get better and better. So, how do you guess these numbers? Well it’s just that, guessing when you start, but the discipline of at least putting some guess down on the paper is a good start. What people are typically going to do is say
“I want to make $25,000”. Well, what you want to do and what you are going to do are two different things. Who cares about what you want. So lets try it again; you say, “I’m going to generate $25,000”. Ok, great. Break that down. How many customers is that? Start at how many people are on your list? You’re saying you are going to generate 100 customers off a list of 1000 people. That’s 10%. Does that sound low or high? I don’t know. This is where you start going around to your friends, doing a little research and say hey is 10% normal? Is that high? So what we are doing is breaking down a launch into assumptions. Let me tell you point blank: your numbers are going to be all wrong. The first time, the second time, the fifth time. That’s ok. You’re not doing this to be right at first. What you are trying to do is examine your assumptions.
It is a guess when you first start but it’s the discipline of putting it down on paper and don’t just pick one number, break it down. How many customers? How much are they each going to be worth? Break it down into two or three numbers there. Then when they real numbers come in you can adjust… either your marketing or your expectations.
You have to do marketing before the product launch. You must do marketing before you create your first slide, first video, first sales page or first email. It doesn’t have to be as complicated as you think. Marketing is not simply writing a sales page and sending emails. Marketing is about knowing whom your audience is, asking them about their biggest challenge and then really listening. It’s not about going in there like “tell me your biggest challenge so I can sell you my product”, but rather saying,
“hey tell me what it is. What has worked, what hasn’t”? Do marketing at the listening level. For anyone who is kind of curious about how we break that down, just as a general rule of thumb I would say if we are launching a product we would spend 50% of our time on research. That’s listening, sending emails, doing surveys, just looking at what other people are doing and understanding where the product fits into the market place. We spend about 25% on the last mile phase. These are things like picking the name, creating sales propaganda, doing the emails. That stuff isn’t marketing in its entirety; it’s a component of marketing. So if there’s one big thing I can tell you, it’s that the marketing starts before you ever put pen to paper by deciding who it is you are going to serve, why are you different and what is it they really want that you can provide.
In launching a product, another rule of thumb we recommend is that you have at least 5 hard yes’. These are 5 people who are guaranteed to buy your product before you even launch. When you are asking people if they are going to buy your product, anything other than a “hell yes” is a no. An example of what people say that sound like a yes, but are actually a no are:
• Oh yeah it sounds like a lot of people would love it!
• Sounds interesting!
• Let me know when it comes out!
So when I say I want to give myself an unfair advantage, I want to know that I am going to generate $25,000 if not more. One of the ways you can do that is to have at least 5 hard yes’. If you can’t find them before you have a product, how are you going to find them after you have a product? You need to build the marketing muscle and the discipline to ask people what it is they want. A typical research progression would look something like this in that 50% area… we are not trying to sell anything. We don’t even have anything to sell. We have no pitch deck, no nothing. We are just listening. At a certain point I can reiterate what it sounds like I’m hearing. And maybe they will say “well kind of, but not really”. At a certain point I’ll get it and they will be like “OMG, yes!” and then I can start being descriptive saying “ok if I had something that would allow you to do xxx, and it looked like this and worked like that would you be interested?” When I finally nail it, and I haven’t even built anything yet, I’ll know it. That’s the hard yes. That’s the work you should be doing before you do all these fancy pitch decks, etc.
You would be amazed at how reluctant people are to get those 5 hard yes’ because it’s so much easier for people to sit up on that ivory throne and send out all these engagement emails and just look at the metrics. You have to actually talk to people. Real people. You have to be a normal human being who breathes oxygen. You can’t sit around and say let’s do an A/B test email. At TCML, we don’t care about any of that. We want to know what real people are doing and what will actually help them.
I love the idea of being the best. When I think of the best, I think of these iconic brands and people. I think of Rolls Royce, Gucci, etc. When you are in that mindset, it’s very clear who you need to be. For us, at The Cannabis Marketing Lab, we want to be the best through craftsmanship. It has become so popular that you should just throw something out there and see what sticks that this industry can easily become plastered with trash, with junk. I believe there is always a plight to quality. I see so many people trying so many things, just wasting their time and money. Some of them will give up. I feel bad for those because they found the wrong sources of information. They didn’t know and are now forever burned. Others will say “I’m ready to take this seriously” and rather than skip over the more expensive option, I value my time more than a few dollars and contract some professional marketing help. A determined person can always find out who the best is in a market. So, when those people come to us, price is a mere triviality. We want the best to be aligned with us so pricing can be worked out.
In the cannabis industry, we start by understanding our market. You know if you’ve emailed me I write back. I read every email and I respond. I do that because I get value from it. I learn. We test things a lot. We test them quietly. We don’t make a big deal about it; and then when it’s ready, when it’s the best, that’s when we release it to the public.
If you commit to being the best, that takes you on a different route than almost everyone else. You can commit to being the best and you can do micro testing. You can test it by testing your ideas and asking people “hey what do you think about this”? If nobody comes back and asks you about it a week or so later, you have the wrong product, or the wrong people. So you want to be able to button all these things up now so that when it launches, it’s a foregone conclusion that the product will be successful.
When you launch at low prices you are selling to a different audience. You are going to get a lower quality customer. There’s no surprise about that. You see a lot of people stay at the same price point forever. There are certain things that happen at those price points. There are different buyer psychologies at $1.97 vs. $4.97 and certainly once you get above $9.99. You have to know what you need to do at each and every price point. Don’t try to jump ahead too fast. But don’t stay at the same point forever either. People don’t impulse buy a $3,000 item. Understand the strategy. If you have a lower price point, they will buy any time. If you have a higher price point, you will need to change your marketing strategy to reach those people. It’s an escalation strategy.
Payment plans in general are going to boost your revenue. There is a lot you have to know before you do it, but it will almost always boost your revenue. If you have a product that that is selling from tiers, like $1,000, $2,000 and $3,000, a general rule of thumb is that you are probably going to make the most money from the $1,000. So you have to ask yourself how am I going to make money from the 2nd and 3rd tier and how much more work is there in delivering that much more value? You need
time and resources for additional tiers. It simply increases your average order value. It’s icing on the cake. It’s not necessary, but it’s nice to have. With that said, tiers are something you can worry about later on.
There are many excuses in this industry to not purchase your product during a launch. Maybe you’ve heard “I’ll do it later” or “the product isn’t right for me” or “people don’t know I smoke weed” Understand that people are also scared of being scammed, scared they can’t cancel, and scared they don’t have the time. Maybe some say “I need to get ducks in a row first”. The biggest one of all time: “I haven’t gotten around to it”.
Your job as a CEO is to give them a reason to take action. If you do nothing, your audience will not take action. All you can do is point at yourself. You did not do a good enough job of showing why your product should be getting their attention. Don’t blame others; look in the mirror on this one.
You have to give people a reason to act now. Do something to move them. The most common one people chose is to put something on an introductory sale. My recommendation is take that one off the table. It’s a cheap laugh; it’s not real comedy. You don’t have to discount if you can reach out to people and influence them in the right way. If your product were the best, why would you give it away at half off? How about launching with the scarcity tactic? Things may run out. Scarcity makes a lot of sense if it’s a high end product. However, if you embark time deadlines, stick to them. American’s don’t like to be told they can’t spend their money, but believe me; they will be the first ones there when the product goes available again. People are smart. They will detect if you are an authentic business owner or not. So, if you set a time frame that someone can purchase something, stick to it. Don’t take any sales after that until you “re-launch”.
What happens if you launch and the results aren’t what you thought they would be? The inability to be honest with yourself guarantees you will never be truly successful. I see it over and over again. Unsuccessful launches. They don’t know why and they don’t truly analyze it. When you have a laun
ch, look at the numbers and projections and be honest if you were successful or not. No excuses… don’t excuse your failures. It’s ok that you failed. But analyze it. Analyze the links in the chain. If you only sold 50 and thought you’d sell 500, then there’s one answer: start over from ground zero. Go back to the market and look at it. If you planned to have 1500 people on your email list and you had 1460, then that wasn’t it. You are golden there. Move on to the next link. Maybe it was your conversion rate… that you expected it to be x and it was something else. Well, talk to the people, why didn’t they buy. Get granular.
For those of you in the cannabis space that want to be the best and have a successful launch, well, it’s difficult and very challenging. But once you get it right, the rewards are disproportionate and they come in for years and years to come.