CBD: Succeeding by Leading

Want to get established in the CBD market? Position your business to be an expert resource with the knowledge and ideas to lead your customers through the array of product options.

man meditating in front of puzzleFor most providers — and their customers — the CBD can seem like strange territory. Because CBD originates from the oft-maligned cannabis plant, and because it’s more akin to a nutritional supplement than a drug from a regulatory standpoint, many HME clients aren’t sure where to begin. That fact puts your HME provider business in an ideal position to capitalize on the massive CBD market opportunity.

And make no mistake, the CBD opportunity is massive. According to market researchers the Brightfield Group, the global CBD market could expand to $22 billion by 2022. Another study from Cowen and Company projects the U.S. CBD market to hit roughly $16 billion by 2025. Low or high — take your pick — those estimates speak to considerable existing market demand that will only grow over the near term.

The opportunity is definitely there for HME providers, according to Jonathan Fedele, CEO of CBD product maker PurWell, who adds that HME providers that do enter the CBD marketplace see steady sales volume. As a CBD product maker, Fedele comes at the HME industry from a knowledgeable standpoint: He owned a multi-location HME provider business in Florida. From there, he opened a home health agency and then started sleep and respirator testing company VirtuOx Inc.

“It’s a great product for an HME retailer in that it’s a cash sale and they’re creating a recurrent revenue or a repeat customer,” What we find is that about 60 percent of our [provider] customers who try the product come back and reorder it either every month or every 60 days.”

And the CBD-related traffic that providers attract has a modifier effect on the store’s retail traffic, because HME patients aren’t only looking for CBD, and CBD customers will likely have other, HME-related needs. Essentially, it’s the kind of feedback loop you want to have.

“The more foot traffic they have, the more repeat customers they have,” Fedele explains. “Not only are they going to gain sales from the CBD, but if those, maybe the next time the customer comes in, they also needed a walker or they need a knee brace or whatever. So it’s an opportunity to increase foot traffic and build a revenue stream, not only through the CBD sales, but also through other product sales, given the benefit of having the increased foot traffic.”

However, many patients are a little mystified by CBD. Who can blame them? CBD is in everything from lotions, to cosmetics, to dog food. They’ve heard that CBD might be able to help them, but they aren’t sure how, they don’t know what products are right for their needs, and, because they’re seeing it for sale in every place from the local beauty salon to the check-out counter at the local mini-mart, they might be a little skeptical of what’s being offered. Mix in the fact that CBD is associated with a plant that has been a bogeyman of America’s War on Drugs since the release of “Reefer Madness” and consumer hesitation is understandable.

These customers need an expert to guide them, and no local business is better positioned to do that than an HME provider, especially given that HME providers already work with so many patients and customer groups that could benefit from CBD. So how should providers get started?

Understanding the Product

One of the key ways that providers establish their expertise is by understanding the product solutions available to help their customers and referral partners. So let’s learn a little bit more about CBD products. For starters, what do those three letters stand for?

CBD is one of the compounds called cannabinoids that are produced by the cannabis plant. The first cannabinoid most everyone has heard of is THC, the psychoactive component in recreational marijuana. CBD, also known as cannabidiol, is the cannabinoid often used in managing pain issues, as well as insomnia and sometimes anxiety.

CBD products are sold in varying dosages that might or might not contain very small percentages of THC, as well. The products range from oil tinctures taken under the tongue, capsules, gummies and lotions. Consumers can buy them online and, depending on what state a person lives in, he or she can buy it at retail establishments.

In addition to the dosage amount and delivery, there are two “schools” of CBD products. There are products that are based on CBD isolate, meaning that the CBD has been isolated out of the hemp plant and in the product, and there are full-spectrum CBD products, which include all the other items that in the hemp plant.

There are 150 cannabinoids in the hemp plant, and that does not include the flavonoids and terpenes and other elements that are in the hemp. Those various elements work together in what is called an “entourage effect” that compounds the efficacy of the CBD.

“Those chemical compounds interact with one another, in some cases amplifying, in other cases inhibiting, in many cases still unknown how it all works,” Fedele says. “But I think that the consensus is that the full-spectrum hemp oil is the superior product in that they’ve found that it typically requires less precise dosing.

“When you isolate the singular molecule of cannabidiol or CBD research has shown that, basically, the therapeutic window for proper dosing of that single-molecule CBD is much more difficult to achieve than when using a full-spectrum product,” he continues. “So, in other words, if you take too little of the single-molecule CBD or the CBD isolate, or if you take too much of the CBD isolate, you’re not going to get the same therapeutic benefit. It’s more difficult to find that therapeutic window in the middle, whereas full-spectrum tends to work kind of better across all dosage.

This gives users some more flexibility in finding what works best for their needs.

“You could start at a lower dosage and simply titrate up or take a little bit more over the course of time as you are paying attention to the effects that it has on your body,” Fedele explains. “And when you achieve the desired effects, then you’ve kind of found your target dosage. Because cannabinoids affect humans or individuals each in a different way. So, what works for me might not exactly be what works for you.”

CBD is still a new category and that means it requires quite a bit of education. Fedele advises that providers start working with a manufacturer or supplier that is also going to provide comprehensive training and support. A good vendor can get a provider ramped up on product knowledge so that they can more expertly serve their local community.

“Everything revolves around the training,” he says. “So we have both a kind of a beginners level course, almost like a CliffsNotes version of CBD. Everything from what is CBD up through laws and regulations, the history of cannabis, the endocannabinoid system. And then we also have a 120-page comprehensive training academy that’s more of the advanced guide.”

In addition to those, PurWell offers its providers training videos and one-on-one sessions.

“When a DME or HME company becomes an authorized reseller, we sort of take them through a step by step process,” he says. “We kind of have a attend 10 steps for success and they go through and they kind of tick off each one of those. But it always starts with training.”

Besides the products, PurWell educates its providers on topics such as product placement in the store and how to engage a customer on the topic of CBD.

“You can be moderately successful just having a small display with CBD products up near the counter,” Fedele says. “But you’re going to be much more successful. Our most successful resellers are those that engage with their customers. So they have prominent displays that attract attention to the fact that they sell CBD.”

Be a Community Resource

It’s critical for a provider that plans to offer CBD products to serve its community. Does that mean that the provider needs to have a brick and mortar location? It depends on the provider, Fedele says.

When Fedele ran an HME business, he said boots-on-the-ground presence was an absolute given. However, these days, the scenario is a little more fluid. While a provider with a brick-and-mortar location will certainly have an easier time reaching a local market, it’s not the only way to approach serving local CBD markets.

“Over the years, obviously for the last 10, 15 years with competitive bidding, and this transformation of the industry, it’s gone to more of a general kind of a retail business — with a brick-and-mortar and also an e-commerce model,” He explains. “We’re working with several larger, Internet-based call center type companies that do DME supplies, like CPAP, diabetic supplies, and those sorts of things. And they’ve implemented programs to market and sell CBD products. So I wouldn’t necessarily say brick-and-mortar.”

What really counts, Fedele says, is how well the provider reaches the local market and how well it connects with those CBD customers.

“I would say that any DME company with a direct consumer relationship, whether it be brick and mortar or e-commerce, they’re in the best position I think to market and sell CBD products,” he says.

In terms of sales, like most retail HME products, the key is for the provider to engage with the customer and share their expert knowledge. Simply saying to the customer, “I don’t know if you noticed, but we’re now selling this full-spectrum CBD; have you ever tried it,” can unlock considerable sales potential. Most everybody has heard of CBD and many people have already tried it, so engaging their customers in a conversation and getting them interested in the product is an easy way to start the sales process in the store.

The RIGHT Marketing

Now, here’s the tricky part: Let’s say the provider has the right product knowledge and it is working to establish itself as a community expert resource on CBD products. How does it get the word out? Obviously, effective marketing is the starting point. However, there is a key rule governing the marketing of CBD products that is a little delicate, and the provider must stay within that boundary: They cannot make claims.

“In any kind of advertising [HME providers] want to be very cautious about making medical claims about CBD products,” he says. “I think that rule typically affects the manufacturer more — a company like ours would certainly be under a larger magnifying glass or greater scrutiny — but providers want to be cautious.”

The issue: Because CBD isn’t a regulated drug, and is treated more like a nutritional supplement, from a product law standpoint, businesses cannot advertise claims about its effectiveness in addressing specific conditions such as sleeplessness or pain. So, a provider can’t advertise in explicit terms that CBD helps people get a better night’s sleep; it can’t run an ad claiming that CBD can treat chronic pain issues; it can’t send out emails saying that CBD can help address someone’s anxiety.

For anyone who’s ever written advertising copy before, not being allowed to tell what your product does for its users is a bit of a puzzle (to put it mildly).

So what does Fedele suggest providers do to solve that puzzle? Start by assuming that the customer has already done some research or heard some word of mouth about what CBD accomplishes, and then focus more on your expertise as a reputable retailer.

“When we talk to DME companies that want to do some marketing and advertising, my recommendation is to try to focus more on the idea that they are a local source for information about CBD,” he says.

And, if the provider wants to do advertising that speaks to the benefits of CBD, a good idea is to use words, phrases, pictures and imagery that would imply the effects of CBD or what effect CBD may have on a person’s body, as opposed to actually making any written claims Doing so will create associations in the potential customer’s mind.

“For example, if you had a picture of someone who is in running shoes and running shorts or a running outfit and they’re sitting on the ground and they’re rubbing a CBD salve on their knee, I think that tells the story without saying anything,” Fedele says. “Runners tend to have joint pain in the knees, and the runner is rubbing this cream or this lotion or salve on an achy joint, so the audience can draw a conclusion.”

When it comes to one of the most effective marketing methods for reaching potential CBD customers, Fedele suggests advertising or promoting what would essentially be a “CBD 101” workshop or seminar that would let people in the community come to the provider’s location to learn more about CBD.

“That is one of the most effective methods that we teach our resellers,” he says. “It works really well. People are just starving for good, reliable information.

“This may kind of go back to the earlier point about how are HME companies in a good position,” he adds. “HME providers are looked upon as a healthcare professional, the information they provide is trusted by their customers. And with so much information that’s out there on the internet, how do you know who to believe and what to believe? So for customers to be able to go to a trusted source really helps, and that’s why the workshops work really well.”


This article originally appeared in the Jan/Feb 2020 issue of HME Business.

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