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Raj Nijjer
VP Marketing @ Yotpo
April 27th, 2020

Leveraging UGC and Loyalty with Medterra CBD

I spoke with Jay Hartenbach, Co-founder and CEO of Medterra CBD, about the impact of COVID-19, how they’re building customer loyalty, and what’s next in the Health & Wellness space.

Table Of Contents

Tell us about Medterra and the CBD space

I am the Co-founder and CEO of Medterra CBD. I’ve been doing this for about 3 years. We started out in my living room, grew considerably, and now we have 15k retailers, sell internationally, and have a pretty large eCommerce presence. It’s been a fun ride.

As far as the CBD space goes, things really got started in 2014 when a pharm bill was passed that made it legal to sell CBD and grow hemp for the first time since 1937. In 2015, the industry started to grow some legs, going from nothing to projecting the massive growth that we’ve continued to see year-over-year. It gives so much credibility to what we’re doing. I don’t think we would have seen that kind of success if CBD wasn’t really helping people. It’s an entrepreneur’s dream to pick up customer service phone calls and hear people thanking you for helping them.

How are you getting your brand name in front of new customers?

When we were supplying wholesale CBD companies, we saw a huge opportunity in the CBD education space. It’s awesome if someone already knows they like CBD, but there are so many people on the fence — they may have heard about it, but they’re not sure about it.

With that said, we put ourselves into the consumer’s shoes and started going to high-trafficked places for CBD education and doing full-page takeovers. We were advertising to consumers that wanted to educate themselves, which put us in a place where we could help them along their consumer journey. It was really effective and got the Medterra brand name out there.

In this day and age, with so many different ads served on social media, direct response, display, and so on, consumers are getting more and more savvy. We found that if you can be somewhat native or help customers along their journey in a transparent way, it typically resonates better with them. That’s also where you see the benefits of social proof and being able to give consumers an honest third-party opinion to help decide whether the product is right for them or not.

How are you using social proof to build authenticity and loyalty with your customers?

The easiest way for us is by using reviews — that’s why a partner like Yotpo can be super helpful. When everyone realized reviews were powerful, people started gaming the system, but then consumers started getting smarter. Even on Amazon you’ve got all these people writing fake reviews — but Yotpo has really come in and helped us avoid that gamification. With Yotpo, our reviews have been verified so it’s easier for us to earn that social trust.

We are also focusing heavily on cultivating authenticity throughout all of our marketing efforts. When you can talk about something you believe in and have confidence that people will reorder, you can start building campaigns that are education or brand-focused and top-of-funnel instead of ‘buy now, 50% off.’ When consumers are confident in the product, they have a higher likelihood of reordering and you won’t need to throw yourself at their feet.

How have reviews impacted your business? How are you leveraging those reviews?

Before we partnered with Yotpo, some of our best-selling products only had about 30-40 reviews. At the time, we were selling 200-300 orders of those products per day, so there was a huge disconnect. It all came back to putting ourselves in the consumer’s shoes — I buy a ton of products online and I often don’t leave reviews because I forget about it. But when you have a partner like Yotpo that has built a consumer-friendly system, it’s so much easier to write reviews. Yotpo has become a total game changer.

With Yotpo, one of our products went from 50 reviews to 1,100 reviews. We’re talking about massive growth in a four-month span.

The traffic was there, and we knew people liked the product, but the obstacle was how we were gathering our reviews — Yotpo changed that for us. Our conversion rates shot through the roof. Which makes sense, right?

When people land on the page, we see them read the short description, look at the photos, then scroll to the bottom for the reviews. At that point, they decide “great, I’ll come back to the marketing copy if the reviews check out.” For us, not only having a good volume of reviews is important, but we also focus on the freshness of these reviews, many of which are coming in on a daily or hourly basis.

With this huge collection of reviews, a major focus for us is how we can deploy them in a meaningful way. Now, we’re starting to integrate reviews into our emails: “Don’t take it from us, look at 50 reviews you can trust!” People are trusting us because we’re not scared to put our customer feedback front and center.

With Yotpo, our products have a good volume of authentic reviews, which creates transparency and trust with our customers.

How has COVID-19 impacted your business and how are you responding?

Business has seen a shift. We’re thankful to be in an industry not as significantly hit as others.

We’ve seen a big spike in traffic with online sales going up 30-40%. Less people are searching online organically, but that traffic conversion is super high. I think when people are getting online and shopping, it’s a very dedicated and intentional experience.

We recognize that some people are in difficult financial situations, so we’re working with our customer care team to support our customers or help with returns in any way we can. Because we’re doing well online, we can take advantage of that success and figure out how to help our customers and community.

We just ran a new promotion all throughout the month of April, and more likely than not, we’ll extend it through May. We’re giving away a free hand sanitizer with every Medterra purchase. People have no idea why they now have a Medterra hand sanitizer but they’re thanking us because it’s something they really needed.

We had the opportunity to help in a small way, so we took it. Just like any other company right now, we had a discussion where we thought, “Is this something that we actually want to sell?” We decided absolutely not — we’ll never sell Medterra hand sanitizer because there’s no CBD in it and we’re not specialists. We’re just fortunate enough to have a relationship with one of the largest OTC manufacturers in the US and they said they could help us make this promotion a reality.

How are you building loyalty with existing and new customers?

It’s a tough thing and it’s getting harder if you’re selling a commodity product.

When we started Medterra, I had some experience with online marketing (with limited success) but quickly learned that it’s not about the initial order, it’s about the reorder of our products. So how do you create a product or service that people are going to come back to? When we developed our products, we knew we had to make them effective so people would want to come back, so we priced them at a point where they could.

If you’re selling a legitimate product, you need those shoppers to come back or you’re going to have a very short-lived eCommerce business.

We sell incredibly high-quality CBD that our consumers can have confidence in. That’s a huge selling point for us.

Beyond that, when you’re selling products that have more than CBD in them, you’re able to create brand loyalty because you have something they can’t find anywhere else. It’s a double-benefit because the product fulfills a specific need and if they like it, they know where to come back and get it. Because it’s unique, it’s more effective.

The future of Medterra is all about creating unique blends that ultimately make the product more efficacious, which helps to foster loyalty.

Let’s talk tech. How are you building loyalty and making it scalable?

One of the easiest ways to build loyalty is to optimize your customer care team. Any time a customer has a question, you need to have a customer care team that is scalable and can answer those questions.

We have some people that will spend 30-40 minutes on the phone. For us, it’s not about how many calls you can take in an hour, it’s always about the customer satisfaction rating. Staying in communication with your customers is key to building loyalty, especially with all of the current uncertainty.

Going into the holiday season, I got emails saying “Order now,” then “Get 30% off,” and then, the next day it’s “Take 40% off.” Now I’m thinking, “Are they desperate?” I don’t think people have an issue with brands emailing them as long as it’s not constant deals-of-the-day.

We constantly look at open rates and unsubscribe rates, and we’ve gotten really favorable statistics because we’re not just selling a product, but trying to educate our community beyond that product.

Talk to us about your rewards and referrals program. How’s it working? How are you using it?

Our rewards program has been huge. What we’re doing with it now is very different from what we were doing in the beginning.

In the beginning, we had a basic rewards program that was ultimately turning people off from utilizing it. With our new system, it’s super easy for people to accumulate points and apply those points at checkout.

We’re now able to say “Hey, by the way, don’t spend that $50, you’ve got $25 in potential rewards savings, so make sure you use that!” — building loyalty, trust, and helping keep our retention rates up.

Our returning customer rate has gone up at least 15-20%.

What’s next in the Health & Wellness and CBD space?

The standard now is that it has to be about more than the CBD product.

Turmeric is a great example of this. Five to ten years ago, turmeric was the end-all-be-all and people were selling basic turmeric capsules. Now, you rarely see a pure turmeric capsule; you see a blend driving that additional efficacy. The health and wellness space and CBD industry is going to see that same change.

We know CBD works well and see a huge benefit provided to our consumers, but as we look forward, we don’t anticipate the same standard pure CBD play being as successful as it is now. It’s going to be driven away by consumers demanding more from products and companies.

CBD is mainstream in the sense that it’s everywhere. However, mainstream adoption is not there; people are still skeptical, they’re questioning its relationship to marijuana, whether it’s a fad, the lack of medical research, and so on.

I think one of the next big things will be medical research; showing the data to back up our claims, being transparent about how we’re formulating our products, and then engaging customers with that information.

How is Medterra different from other CBD companies?

When we started 3 years ago, we were actually supplying other CBD companies with raw materials. We started looking around and saw a huge opportunity to be disruptive. At a significant price, there was very little focus on customer experience and companies were taking 7-10 days to ship. At that time, with so much uncertainty around CBD, people were calling and asking questions like “Is this going to get me arrested? Is it going to get me high? Am I going to fail a drug test?” All those questions would go straight to voicemail.

The industry, and Medterra as a company, has matured considerably, but we’ve continued to maintain the same values: if we deliver products that we truly believe in, and do it at a fair, affordable price, then we’ll be successful.

Some of that might sound cliche or aspirational, but it’s what ultimately differentiates us from the other CBD brands out there.

When it comes to the product, we have to believe in what we’re selling. After all of the research and growth over the past couple of years, it would be unfair to the consumers and we wouldn’t be doing our best work if we weren’t continuously innovating. At Medterra, we constantly ask ourselves: how are we moving the needle? And how are we making our products even more effective? We don’t want to become stagnant.

Our other big focus is on quality. A lot of CBD companies are sourcing from a variety of farms and don’t necessarily know where they’re getting their CBD from, but we work directly with our farms. We know the quality and consistency, and we can pass those savings onto our consumers, rather than rely on brokers in the middle.

That innovation, tied to an infrastructure of scalability and compliance, has allowed us to leapfrog in the industry and continue to do well.

Who is your target customer?

Because we have such a strong eCommerce presence, we’re able to gather a lot of data from our customer base. What we’re seeing is that members of the younger demographic (under 30) are huge adopters in the CBD space. They’re more willing to try new things, question the status quo, and prioritize mental health and wellness. Then, we see this U shape with Under 30 on one side and then 50 & older on the other side — they don’t really care what’s in it, but if it can help them, they’re all in.

How are you messaging to these distinct customer profiles?

When we started Medterra, we were pretty unsophisticated in how we were marketing it. It was really about letting people discover that they wanted CBD and then coming to us as they were trying to find the best CBD product. Now, we’re trying to both acquire new customers and educate them, which can be a challenge.

We’re launching a campaign this year showing that CBD can have a variety of uses. Whether you have trouble sleeping, or you’re really active, or working out for the first time, CBD can be useful for you. It’s for the never-sleepers, the never-too-old-runners, the early-risers, and more. When you can build a campaign that’s not about the individuals but about the activities they can relate to, you can appeal to a broader demographic.

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