How One CBD Brand Scaled From 0 To 1,500 Stores Using Influencer Marketing
Influencer marketing has been around for some time now, but how do you convert social media followers into loyal customers? I recently spoke with Alex Valley, CEO of UNITY, about how he used influencer marketing to effectively scale his CBD brand’s eCommerce sales and get his products into 1,500 stores across the country.
Gary Drenik: Using influencers to help scale a business isn’t new. What did UNITY do differently to use influencers to drive sales?
Alex Valley: Being a pandemic-era brand breeds many consequences. One of the biggest amongst them is the ability to drive product trial. Traditionally, brands would use sampling (think Redbull or Costco) to generate awareness of their products and, in turn, drive sales. During Covid-19 times, sampling is not the same as it once was. How can a brand generate awareness, trial, and sales all at one time if sampling is not the go-to option? Influencer marketing. That said, the key here is the execution. We saw people racing for the macro-influencers with millions of followers and decided to do things differently. We target influencers with 20,000-100,000 followers. Those who have a large, authentic influence over their followers and are willing to post for a low price (or free product) about a genuine product to them. Somebody that will talk about UNITY with their friends—not because they are paid to but because they truly do appreciate the product. That word of mouth is important. According to a recent Prosper Insights & Analytics Survey, 26.4% of adults are influenced by word of mouth when choosing grocery items.
Further, Prosper Insights & Analytics Survey notes that 18.9% of Gen-Z and 19.7% of Millennials make grocery purchases based on social media.
Knowing the purchasing influences, we decided to focus on the niche influencers in a very grassroots effort. In August, our eCommerce sales were up 610% from last year and we’ve scaled from 0 stores to 1,500 stores since March of 2020, so something is working!
Drenik: Were investors impressed with your influencer strategy?
Valley: It depends. The investor space is a large one, making it tough to generalize. The traditional investor skews older and often sticks to the “tried and true” methods of 5 years previous. The bigger problem we have faced when speaking to this type of investor is conveying what CBD is and why to believe in it. UNITY does things differently—from what we sell, how we sell it, and why we exist. The investors that we align most with typically have the same unconventional approach to doing business. These investors usually skew younger and are up to date on wellness trends. Since investing is such a large commitment for all involved, aligning yourself with a team that values the same strategies and values is essential. We have been lucky enough to do that.
Drenik: What other kinds of things does a startup have to have or do to impress investors?
Valley: The founding team is essential. Ideas are useless—execution is the game. That means that the team must have tenacity, relentless passion, and adaptability. Are you willing to do whatever it takes, do it with excitement, and pivot when you are wrong? That is what I look for when I invest. From there, it’s important to have a sound strategy, some early adoption/traction, and product-market fit.
Drenik: As a founder without an extensive background in the space, how are you able to stand out from the competition?
Valley: Unrivaled persistence and hard work. Become a cockroach that's hard to kill. When you are down and out, pivot until something works. Failure is necessary to hash out what will win. Most people take a loss as a sign to quit. I took those signs as signals for what to change and what we could do better. I have always spun the negative as a chance to prove myself. Honestly, being written off initially as an influencer turned beverage entrepreneur was the best gift I was given. Nobody thought I could or would “do it” so nobody tried to stop me until we were cemented as a top-three CBD beverage company in the US. As I call it, trial by gunfire is the best way to learn in a new space until you can command the space you occupy. To this date, I am competing against people that have way more experience, are twice my age, have better or more funding, and are working with some of the legacy brands to execute...and still here I am a cockroach surviving and thriving.
Drenik: Is CBD just a fad? Where is the industry headed?
Valley: No way. Poor quality products are the only thing that will be short-lived. CBD is here to stay. As a recent Prosper Insights & Analytics Survey’s data outlines, 63.6% of Gen Z and 53.2% of Millennials regularly use CBD products for mental health.
One of the gifts that the pandemic gave us is a heightened awareness of the importance of mental health. Many consumers are using CBD in an attempt to help with their mental health. As our industry ages and evolves, there is a higher focus on quality, transparency, and efficacy. Consumers want to know they are getting the best. Businesses like UNITY aim to give that to them. We take pride in using the best extraction methods while prioritizing sustainable, organic farming practices that yield vegan, natural, non-GMO, and non-allergen products. People buy CBD for health, so settling for anything less just doesn’t make sense in the eyes of our consumers. Further, transparency is essential. Companies will be expected to post their lab results on their sites with QR codes on the bottles in the future. From there, the expectation will be for high efficacy. People want to feel the effects. We have had great results from our patented, nano-available CBD. The science behind it is that this CBD is smaller and can pass through the blood-brain barrier more easily to give people more of the CBD faster. The industry is heading toward a constantly elevated standard that will allow all of us to be better! After quality is addressed, more definitive CBD regulations will take place. We look forward to this time because it will set a gold standard across the industry for all suppliers to live up to. Once that happens the larger players will have more confidence to jump into the space and you will see CBD in any restaurant, bar, grocery store, or convenience store that you go to! CBD is here to stay.
Drenik: Thanks, Alex, for your insights on how to use influencer marketing to successfully scale a CBD business.