Building Reputational Capital Is a Must for Succeeding as a Cannabis Brand
Customers can buy whatever you sell from somebody else. They'll decide based on your reputation.
The cannabis industry competes in a very crowded market that will only get more crowded as states like Missouri and Michigan join the fray in coming years. This presents a major challenge for cannabis companies and brands working to distinguish themselves. In an increasingly crowded market, how can cannabis companies stand apart and distinguish themselves?
The answer is by building reputational capital.
What is reputational capital?
Reputational capital is the sum of how both your customers and employees perceive you and your company. However, this concept is more than just a binary opinion of good or bad -- it is a measure of your actions, their outcomes and how willing someone is to trust or help you.
The best way to view reputational capital is as if it is a real-world currency. Every positive action your company takes, every promise kept and every satisfied customer increases the value of your reputational capital. Conversely, every angry customer, broken promise and bad move made by your company depletes your reputational capital.
In that way, cannabis business owners need to jealously guard and constantly build upon their reputational capital. The more you develop this reputational capital, the more your company will stand out and the more likely you are to build a successful business. A company with strong reputational capital is much better suited to weather a crisis or an egregious mistake.
Building reputational capital is a process that takes time -- it does not happen overnight. Building a good reputation takes years to solidify, but it is worth the effort. Conversely, while it may take years to accumulate a fair amount of reputational capital, there are some things you can do to hasten the process.
Behaving ethically is a rule that should go without saying, but ethical behavior is not always a valued virtue in the world of business. Acting ethically is both the morally correct thing to do and good for business. No one wants to work with a company that lies and steals. No one wants to work with people who cheat and behave opportunistically. No customer wants to purchase goods and services from a company that cheats its customers.
Aside from basic human decency, ethical behavior also extends to other kinds of business practices. People value companies that care about the environment, pursue gender/racial equity and tirelessly strive to improve their community. There are investment funds that specifically look to invest in ethical companies.
Deliver on your promises.
It is not enough to simply behave ethically; one must also be able to deliver on their promises. You can have the best products and services in the cannabis industry, but if people don't get what they expect from you, it doesn't matter. To use an extreme example, if you purchased a soda and instead got a bottle of antifreeze, it wouldn't matter if it was the world's top brand of antifreeze or how friendly the sales associate was. Odds are, you probably wouldn't go back to that brand ever again.
Similarly, your brand needs to follow-through with everything it promises. Every fulfilled promise represents a little bit more trust from your customers, and every broken promise (no matter how small) chips away at your credibility and reputation.
Establish thought leadership.
For many people, the term "thought leader" is a wishy-washy phrase that gets thrown around way too much. However, establishing yourself as thought leader is one of the most effective ways to build your reputational capital. Simply put, becoming a thought leader means that your peers and customers regard you as an expert in your field. Your voice is respected and your opinions matter.
Much like building your reputational capital, becoming a thought leader takes time and effort. One way to establish thought leadership is by interacting with your business community by writing articles and blog posts about your area of expertise. If your company distributes cannabis, start writing about the issues facing distribution companies. Reach out to prominent publications and see if you can submit a story. The more you get your voice out there, the more people will start to listen to you.
In the world of business, reputations are earned, not given. Although it takes time to build up reputational capital, time is not always on your side in a nascent industry like cannabis. It is paramount that entrepreneurs take concerted steps towards building their reputation. By using the methods outlined above, creating a strong and reliable reputation is an attainable goal for almost anyone willing to put in the time and effort.