CBD Is a Crowded Industry. Here's How One Brand Learned to Stand Out.
In an industry as crowded as CBD, how can any startup stand out? It’s a question everyone in the space must answer, as a tsunami of CBD-infused products flood onto store shelves nationwide. So when the cofounders of Feals entered this space, they cooked up a plan to make themselves different. They’d do some customer acquisition research and then create the product people said they wanted.
For the Feals cofounders -- Alex Iwanchuk, Eric Scheibling, and Drew Todd -- this was a natural way of thinking. They’d previously built and sold an ad tech company, and they were big believers in data. So their team researched the CBD market and, for a year, tested a variety of products with more than 5,000 customers. By the end, they concluded that the big opportunity was in hemp-based CBD tinctures.
But when they dug deeper, they discovered a problem: People had no idea what dosage to take.
This, they realized, was a true white space in the industry. The opportunity wasn’t just in product -- it was in making sense of the product. “CBD is super personalized. It’s unique to the individual,” says Todd. “I compare it to a cup of coffee. One person can drink a single cup of coffee to get through their day, but another person needs 12, depending on how their system processes caffeine.” And if a customer didn’t know what worked for them personally, they’d be reluctant to buy anything at all.
What to do? The Feals team decided to look outside their industry for inspiration. They thought about Warby Parker, the online prescription eyeglass and sunglass retail store, which famously popularized the idea of at-home trials. (The company will mail five frames to a potential customer to try on at home and select the one they like.) Maybe there was a way to do that with CBD.
The Feals cofounders developed a product they called a “flight” -- three perfume-bottle-like vials. Each delivers a specific dose, 40 milligrams, 80 milligrams, or 160 milligrams, of CBD oil. They’d charge $20 for the flight, including shipping, and it would arrive with clear instructions for use. (Only one dose a day; let it sit under the tongue for 30 seconds.) Customers would be encouraged to start low and go slow.
Feals launched in March 2019 with the flights and saw almost immediate results. First, people’s buying habits shifted toward the most potent products. “People typically need to use more CBD than they initially believed to get their desired effects,” says Todd. Feals originally anticipated that its most potent bottle would constitute 2 to 5 percent of sales; now it’s close to 20 percent.
But even more intriguingly, Feals noticed that its customer service department was handling a large number of calls that averaged 12 minutes. It wasn’t because people were calling to complain. Rather, first-time CBD users were using Feals as an informational hotline; they were calling to learn more about CBD before trying it for the first time. So Feals leaned into its new role: The company developed “conversational commerce” -- sending a personalized text message once a flight reaches a new customer’s home, so the company can keep the conversation going.
“That’s what gets us really excited,” Todd says--because it means that Feals is now creating new customers, rather than just fighting for existing users. In a hot market like CBD, that’s the kind of difference that matters.