September 28, 2020

Cbd Customer Acquisition

As an upstart agency, ARSENL works with many challenger brands, ranging from start-ups to mid-sized organizations. Since the Farm Bill passed we’ve worked with four Cannabis companies including industry leaders like mary’s nutritionals to build brands and drive ecommerce. In any industry, customer acquisition is challenging and the associated costs are always in focus. In CBD, there are additional factors to consider – and additional opportunities. Here’s a read on both, as you get ready for your next phase of growth:


Uncertainty for consumers
Since 2018, over 3,500 new brands have entered the market, offering products ranging from tinctures to gummies to gel pens.  7-11 sells CBD. So does Martha Stewart. Not too long ago, these products were illegal in the minds of many consumers. And there is statistically very little relation between CBD price and CBD quality. The bottom line is that your prospects are going to shop around to learn as much as they can before purchase – even while you might still pay for the click.

Immunity to offers
At least for now in CBD, heavy discounts are the norm. Major brands are offering 40% off on a routine basis. For your brand, what might seem like a generous offer that should get consumers to purchase today might not be sufficiently differentiating. That can mean more advertising is required, with more attempts to generate a click and conversion.

The two best ad platforms for paid customer acquisition – Google and Facebook – won’t let you say ‘CBD’ in your ad or on your website. Programmatic offers more less restrictive options but native and display don’t typically convert as well. When you can’t say the product category name anywhere in the purchase cycle, you’ve got extra work to do. This means casting a wider net using proxy terms such as full spectrum hemp extract that don’t mean as much to consumers but are somewhat relatable.

If this is your daily, take heart. Even the Internet industry went through a bit of irrational exuberance, as Chairman Greenspan termed it. Too many advertisers for too few eyeballs led to the bust of 2000 in which brands like went out of business and Amazon’s stock slid to $12. The Internet has had a pretty good run since then, and you can bet that CBD will too.

If you’re a CBD brand, you’ve got to work extra hard to acquire customers and survive this saturated market. Start here:

  • 1. Invest in your brand. Take it from lead gen guys – brand is everything. In a competitive market, making sure your brand is delightful, resonating and distinct is your primary mission. We’re often approached by companies that are focused on the formula for ‘ad dollars in, ecommerce dollars out’. The truth is, results are usually linked to the previous efforts to build customer love for the brand. Lead gen is relatively easy for good and visible brands. It’s much more difficult to depend on ecommerce ads alone to drive the success of your business.
  • 2. Generate word-of-mouth. In every business, word of mouth and the proxy for word of mouth – customer reviews – is the ecommerce differentiator. In CBD, it’s paramount. Since few customers have long histories with Cannabis brands, everybody is asking everybody for a trustworthy recommendation. For you that means get products into consumers’ hands, manage the purchase experience and relationship well, and encourage your customers to recommend your brand.
  • 3. Depend on lots of channels. Organic, influencer and paid social. Organic and paid search. Affiliate marketing. Display. PR. Email. A typical ecommerce store gets 40% of its visits from organic search, 25% from paid media and the rest from a variety of other channels. Young brands need to stretch to communicate with potential audiences across as many quality touch points as possible.
  • 4. Own your own customer relationships. The focus on online ad privacy is intensifying and at some point Google and Apple could make significant privacy changes. This all points to the need to develop 1st party data that is actionable. Having your own prospect and customer lists and understanding how to leverage them for brand building and sales results has never been more important.
  • 5. Track and optimize. Customer Acquisition Cost (CAC) should be viewed as a benchmark against the potential lifetime value of the customer. Larger order sizes and subscriptions add to the value while your marketing costs are reduced as organic channels come into play.

We’re a performance-based digital media agency based in Miami. We help grow brands in cannabis, hospitality, leisure sports, specialty retail and other verticals. Our services include strategy, media and design. Find us at or connect with us at

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