In times of Crisis, Great Brands can still turn to Brand Licensing

Happy Holidays 2012.  I just had an email from one of my Blog readers that has prompted me to include the topic of his question in my latest post.  At times a great Brand can hit a crossroads in its life and become “defunct”.  It may be because of a bankruptcy, a patent expiring, product substitutes, fads ending or years of business mismanagement.  The result is that a Brand that has built up tremendous brand equity over a lifetime is no longer viable for its own core business.  There are plenty of examples of such “defunct” brands like Sharper Image, Xerox, Polaroid, Linens N Things, Op, and Starter.  When a crisis hits a brand, Brand Licensing should strongly be considered as a viable option to leverage the huge and expensive brand equity that has been built up over the brand’s lifespan.   It would be a shame to simply walk away from this equity.  Indeed, companies like Hilco Streambank,  Authentic Brands and Iconix have made a business model out of buying up such brands and re-launching them to the market via licensing.   The important point is that owners of Corporate Trademarks in crisis mode can use Brand Licensing to keep their defunct brands alive in the hearts and minds of consumers and make money off the equity they have built via royalties.

And the best place to start is to work with a company like mine, Brandar Consulting, so you can take measure of your Brand’s equity through market research;  finding out  what your Brand’s current awareness, opinion and preference numbers look like in the consumer’s mind today.   If your Brand does indeed remain strong in awareness and equity , you can also use market research to determine what product categories that customers give your Brand “permission” to extend into via Licensing.  The output from your research can then be turned around and used to put together a “Brand Selling” presentation to sell prospective manufacturers on licensing your brand into new product categories.

There is tension in success here though.   As you build out your program, you will hopefully find some very successful licensees who are going to do better a job than you would yourself  with your brand if you entered the same product category. This is part of the reason you license your brand. You find someone with much more core competency in a product category than your  own company could ever hope to have.  If a Licensee is very successful in a product category it becomes a new brand building experience for your  “defunct” Brand.  This is the holy grail of licensing.  It is what you hope for.  The partnership thrives because you benefit from new brand equity and royalty revenues and your Licensees benefit from borrowing your Brand name because it is too expensive for them to build a Brand on their own.  While the licensee's operational excellence is a big part of the success of your licensed products, your brand is also playing a large role in their success; even if the mother company is now doing very little to build your own brand.   Remember, companies license the brand equity you have already built through many long years of brand investment, not the brand equity you are going to build.   Here’s where the tension creeps in; I have seen licensees start to feel like they are doing more to build the Licensor’s brand than the Licensor actually is.  Over time, this can lead to Licensees deciding they can be a success without the licensed brand and they part ways and enter the product category with their own brand or a new licensed brand.   The problem with this scenario is that you the Licensor can always turn around and re-enter the category with a new Licensee.  A good example of this type of scenario is the company Avenues parting ways with the Wenger Swiss Gear brand license in the Cases and Backpacks segment.

The best bet to avoid this scenario as a Licensor of a “defunct” Brand is to reinvest some of your royalty revenue back into the Brand you are licensing and be very vocal with your Licensees about what you are doing to support the Brand they are licensing.  The other thing you can do is build a broad-based Stable of licensees across  product categories that are supporting each other at retail, so the rising tide of your Brand’s licensing program can lift all boats.   Brand Licensing needs to always be treated as a two-way street.   If you maintain this partnership mentality within your program, even if you start with a “defunct” brand, you will be successful in the long term.

Mike Slusar

Managing Director & Owner
Brandar Consulting, LLC
“Helping Brands Reach for The Stars”

email: mike@brandar.com

http://www.brandar.com/

copyright © 2012 Brandar Consulting, LLC  All Rights Reserved   

How Do You Define Success in Brand Licensing?

 

While attending Licensing Expo 2012 this year in Las Vegas,    I moderated a panel on “How to Work Effectively with Licensing Agents and Consultants?”    One of the questions from the audience was “How do you define Success in Brand Licensing.”   My answer may surprise you.  To me the ultimate signal of success is the number of long-term licensing partnerships an agent, consultant, licensor or licensee has.   Why do I say this and not the number of deals we signed this year or the amount of royalty revenue we are earning.  The reason I say this is because the real hard work in licensing starts after the deal is signed.   While finding a licensee, negotiating the deal terms and drafting a licensing contract seem like hard work, it pales in comparison to having the drive and expending the effort to make a licensing deal successful in the long term.   That’s where real brand-building occurs in your licensing program and making your licensing relationships build equity in your brand is the ultimate success in this business.  Too often people in our industry sign a deal and then are off chasing the next licensing deal vs. expending the hard effort of making their existing licensing deals long-term successes.  The real money to be earned in licensing is in cultivating long-tenured licensing success stories.

When I was running AT&T’s licensing program, one of the things I was most proud of is that our agent, The Beanstalk Group and our most valuable licensees (VTech for telephones and Citibank for the AT&T Universal Credit Card) were with us for the whole time I managed the program and all those relationships still exist today over a dozen years later.  Unfortunately, this is the rarity in the licensing industry.  But if you want to generate real value in trademark licensing you need balance your time in chasing new deals with expending the necessary energy to make your current deals long-term successes.

What’s the recipe for long-term success?  Well it starts with taking the time to give your licensee a brand immersion presentation so they come to learn the essence of your brand as well as you do and, most importantly, understand how to work within your brand management processes.   You see the only hope you have of achieving the ultimate goal in licensing, “the customer never ever suspecting that a licensed product is not coming from the mother company”, is to make sure your licensee understands your brand well enough to fully replicate your branded product experience.  What follows is a list of important steps to making a licensee a long-tenured successful partner.

·       Engage in brand immersion with your licensee

·       Participate in the licensee’s Product Development Process

·       Support your licensee’s Sales efforts with retailers

·       Assure that the licensee’s marketing materials and packaging are consistent with your style guides

·       Monitor the licensee’s customer service center to make sure the service experience is consistent with your brand and service metrics

·       Test and approve all products with a defined process before they are released in the marketplace

·       Continue to test products bought at retailers to make sure they are maintaining quality over time

·       Inspect the factories where the product is being made

·       Keep close tabs on the licensee’s Sales results over time

·       Cross-market licensee product with other licensees and your core business

·       Participate in your licensee’s annual product and market planning processes

If you work hard at all these things you will have a chance at having long-term successful licensing relationships.

One of my mentors in the industry was down on Licensing as a profession when he retired.  He felt that licensing was just a “grand ruse” on the consumer;  deceiving them into believing that a licensed product was legitimately being produced by the branded company itself and that was really not a fun way to make a living in his mind.  I take a different view.  If you take the time to really do brand licensing well, you the licensor are actually providing a service to the licensed product consumer because you are extending your branded product experience to well-managed licensees delivering that same experience to the marketplace in wider product categories.   You see the Licensor’s core competency is really that branded product experience and successful licensing is all about extending your already popular branded product experience to your licensees’ products over the long term.   

Look out for my next post coming this Fall on:  Licensing: Brand Building or Brand Busting?

Mike Slusar

Managing Director & Owner
Brandar Consulting, LLC
“Helping Brands Reach for The Stars”

email: mike@brandar.com

http://www.brandar.com/

copyright © 2012 Brandar Consulting, LLC  All Rights Reserved
 

Getting 'em to Sign on the Line which is Dotted...

Welcome to my first post of 2012.  I want to return to the theme of closing deals and try to fulfill Alec Baldwin’s famous line from his cameo in Glengarry Glen Ross: “Because only one thing counts in this life: Get them to sign on the line which is dotted!”  

Well you or your licensing agent have done all the hard work: you’ve found a licensee in an attractive product category, you’ve negotiated great business terms,  done all your due diligence to qualify your licensee and you have written and negotiated the contract.   All that is left is getting your Senior Management to sign on the dotted line of the contract.   This is the easy part, right?  WRONG.    This can be the very hardest part of the licensing process.  It’s what puts gray hair on Licensing Agents’ heads.   This part of the process is very often taken for granted by Licensing Managers at Corporate Licensors.  Most assume that a licensing deal will just sell itself on its face and the process of getting Senior Management sign-off is just a formality.

Often Brand Licensing Managers/Directors don’t take the time to sell their key management stakeholders on the merits of a new licensing deal.  And what results is you and your agent’s worse nightmare; a fully negotiated licensing deal that never gets signed. The reason for this is what I call the “drop in the ocean effect”; the $ value of the royalties your new licensing deal will collect is a mere drop in the corporate ocean, hardly enough to cause a blip on the corporate revenue radar.  Very often your management’s  response can be: “you are licensing our company’s more valuable asset, our brand, to a no-name company for how much money?!”

How do you avoid this situation and get your Executive Management committed to your deal.   First off, you start the process by talking with your Senior Management long before they need to sign your deal.  You explain what it means to license your brand, the partnership you are seeking, and the product category you are targeting.  You may want to share the results of your Brand Extension market research showing that customers were very accepting of your brand entering this product category.  You should also explain why you are talking to certain business partners. Next check in periodically with your management apprising them of your progress in striking a deal.   By the time you get to the point where you are ready to ask for their signature on the contract, your management will hopefully have heard about your deal a few times already.  

When presenting the contract for signature, put the signature page upfront with a short 3-5 page presentation outlining the merits of the deal and the critical points contained in the contract.   Your overview should not only focus on the royalties the deal will generate, but also demonstrate how your licensing deal will cause a bigger wave in the corporate ocean through: 1) stretching your brand into a new product category whereby building new brand equity, and 2) creating new brand impressions from the retail distribution and advertising of your prospective licensee.  Typically these brand impressions will drive far more value to your brand than the royalties you generate.  Figure out a way to quantify the number of brand impressions that will be created and put a monetary value on it. When I ran AT&T’s licensing program, we were able to put a precise monetary value on our licensee brand impressions and they were 15 times more valuable to AT&T than the royalties we generated annually.  If you need help modeling your royalty revenue potential, running your Brand Extension market research, calculating the amount of brand impressions a new licensing deal will generate or valuing these brand impressions consider hiring my firm, Brandar Consulting, to assist you.


The key here is to prove the value of your licensing deal beyond the obvious royalty revenue and also to prove to your management that you’ve written your contract in such a way as to mitigate the brand risk to your firm so the upside deal potential clearly outweighs the downside brand risk. Doing all this will get you that signature on “the line which is dotted”  and enable you to “be a closer.”

Mike Slusar

Managing Director & Owner
Brandar Consulting, LLC
“Helping Brands Reach for The Stars”

email: mike@brandar.com

http://www.brandar.com/

copyright © 2012 Brandar Consulting, LLC  All Rights Reserved

Coffee's For Closers

Summer’s over and Fall is in full swing so it is time to work our butts off again.   People laugh at me, but I always say the busiest time in the US service economy always seems to be from Labor Weekend to Thanksgiving and from January 2nd to Memorial Day Weekend.  It is really those 8 months out of the year that drive most of our productivity.   Well now that I am in the stretch run of busy mode again, I thought I would make my last post of this year.  It has to do with following up my Be A Closer Post.

As a corporate licensing professional, you can be the best closer in the world, but if you are not in the right place organizationally in your company, you have only a small chance of success.  If you have ever seen the movie Glengary Glen Ross, you will remember the infamous line from the all-time classic 5 minute cameo of Alec Baldwin: “Coffee’s for Closers Only.”   You can click on the link if you have not seen it; I warn you it has some very graphic language.  Why do I bring this harsh scene up, well Alec Baldwin waltzes into a realtor’s sales office and says he is from the “downtown office” and he is firing all the sales agents in one week, denying them access to the best leads and to even a cup of coffee until they start closing deals.  The sad reality of this movie is that this sales office is set up to fail because they are not aligned well with the downtown office.  And this is the parallel that I can draw to your Corporate Brand Licensing Function.  If you are a Director of Brand Licensing and setting up a new licensing function, you need to make sure your new organization is aligned in the best possible corporate department for success.

You need to take time to survey your company at the very start-up of your function and think about where your licensing organization will have the strongest support and air cover to succeed.  Without it, you are doomed to fail before you even have your first prospective licensee meeting.  Why do I say this, well because when you engage in brand licensing you are licensing your company’s most valuable asset.   And while Brand Licensing done well can be a great brand building tool; Licensing done poorly can damage your brand badly. (See post “Why Good Brand Licensors Sleep at Night”)  And people in your company will have a tendency to focus on the brand risks much more than the brand rewards, particularly if the rewards are not flowing back to them directly. 

So how do you figure out where the best organization is for Brand Licensing to report to?  Survey your company and pinpoint the organization that will be most threatened by your licensing function.  It could be the area where your licensing deals will have the most overlap in the marketplace, or the area where most of the brand equity has been created that you are trading off of.   Another possible landing spot could also be an organization that is already charged with managing your Brand companywide, trace back where that group reports to. Typically, you would want to align brand licensing with the senior most levels possible in your company so you have the air cover you will need. It is also at those levels where the decision authority will exist to actually sign a licensing deal for your company.

And THAT is really the hardest part of closing Corporate Brand Licensing deals: getting your Senior Management to “sign on the line which is dotted.” More on that next time…

Mike Slusar

Managing Director & Owner
Brandar Consulting, LLC
“Helping Brands Reach for The Stars”

email: mike@brandar.com

http://www.brandar.com/

copyright © 2011 Brandar Consulting, LLC  All Rights Reserved 

BE A CLOSER

I’ve just returned from a Summer Vacation and my batteries are again fully charged, so I thought I would return to my Blog for my 2nd posting of 2011. Just to pick up on my last theme of Internal Selling, I wanted to follow-up on the all important topic of closing corporate trademark licensing deals. Early on in my licensing career, I was lucky enough to meet a guy who became my mentor in the industry his name is Seth Siegel, co-founder of The Beanstalk Group Licensing Agency. To me, Seth is a legend in the industry. My relationship with Seth was not unlike the relationship that Jerry Maguire had with what he called his mentor, the late, great sports agent Dicky Fox. Dicky Fox is one of my all time favorite movie characters. His wisdom spread throughout the Jerry Maguire movie is one classic, but meaningful, cliché after another. Just to give you a few Dickyisms as I call them:


“The key to this business is personal relationships”

“If this [points to heart] is empty, then this [points to head] doesn't matter.”

“Roll with the punches, tomorrow is another day.”

“ Hey... I don't have all the answers. In life, to be honest, I have failed as much as I have succeeded. But I love my wife. I love my life. And I wish you my kind of success.”

Well I had a Dicky Fox moment one time when talking with Seth. Years after working with Seth and The Beanstalk Group, I asked him why he decided that AT&T would make a good licensing client for his agency and his response was something I will never forget. He said, “When I am evaluating whether I want to work with a client I look for closers.” My response was well what the heck does that mean? And Seth proceeded to tell me that he made sure that all his clients had at least one person on the Licensing team that he thought could get a deal closed internally at that company. He explained to me that my boss at the time was not a closer, but he had enough exposure to me to know that I was a closer and that sealed the deal for him. And to Seth a closer was a person who had the drive, enthusiasm and selling skills to get a negotiated licensing deal signed off on by senior management at their company. I thought that was a very shrewd observation because you see a Licensing Agent’s worst nightmare is to negotiate a major deal and get the licensee to sign off on it only to have his client, the licensor, fail to secure senior management sign-off. All the hard work is done to close the deal, but no one exists internally at the licensor to successfully sell the deal into senior management and get it closed. If you want to be a successful trademark licensor, BE A CLOSER. Be that person that is singularly and passionately focused on getting your deals signed off by your senior management. I was that person at AT&T and I was successful in getting signoff on 9-figure licensing deals as a result. So to create my own Dicky Fox line and to borrow from Seth:

“Remember people want to work with closers. So BE A CLOSER!”

Mike Slusar


Managing Director & Owner
Brandar Consulting, LLC
email: mike@brandar.com


“Helping Brands Reach for The Stars”

http://www.brandar.com/

copyright © 2011 Brandar Consulting, LLC  All Rights Reserved

Internal Selling, It Never Ends

Well I am again returning to my blog with my first post in 2011. Sorry for the long break. My preference is to only post very useful topics however infrequent and I think I found another useful discussion.


I often work with large Corporate Clients in my consulting practice at Brandar and the one thing that always surprises me is that many Corporate Brand Licensing Programs fail because of the inability of its managers to sell the merits of a licensing program internally. This often comes as a surprise because Licensing Director’s often focus on chasing and getting new lucrative deals and think that will enough to be successful long term. I have news for you, it won’t. Why you ask? Because brand licensing royalties usually pale in comparison to the core revenues of your company, your royalties are usually a drop in the proverbial corporate ocean.


Well how do you rise above this problem? The simple answer is understanding from the get-go that Brand Licensing cannot be a bottom-up initiative. In order to be successful a Corporate Brand Licensing Director, you must engage the strong support of your senior management. And this does not just include Senior Managers in your direct chain of command; it also includes garnering the support of any Senior Managers in your company that your licensing activities will touch in some way. Having top level cross-organizational support for your Licensing Program is the surest way to get new licensing deals approved despite the protests of lower level managers. News Flash: If your company is big enough, someone is always going to step forward to try to block a licensing deal. You need to be prepared to handle this and rise above the detractors with strong senior level support at your company.


The best way to attack this issue is to build an internal selling presentation that you can use to sell the merits of a proactive Brand Licensing Program to your senior management and your peers. Your story needs to focus on the merits of licensing way beyond royalty revenues. Once you have built this story, don’t treat it like a static document, but instead have it top of mind all the time, be on the look out for anything that builds the strength of your story and add it to your deck continually. If you need help building your story contact a Licensing Consultancy like Brandar to assist you. It is in this critical area that most Licensing Directors falter. Most Licensing Program Managers fail to recognize that the process of internally selling the merits of your licensing program NEVER ENDS.


The larger the company, the more personnel that change seats and the more organizational shifts that occur. Each time a change happens, the Licensing Director needs to be proactive and schedule time with the new players to walk them through the internal Licensing Selling Story and ASK FOR THEIR SUPPORT. It is a story that can never end and needs to build over time. It is also a story that must be revisited with the senior managers who are still in place, but need to hear your latest chapter to continue their support. You can’t afford to get complacent as a Licensing Director; constant internal selling needs to be part of your daily routine. If it is not, your ability to quickly close signed licensing deals internally at your company will be severely impaired. More on the topic of Closing Deals next time.

Mike Slusar


Managing Director & Owner
Brandar Consulting, LLC
email: mike@brandar.com


“Helping Brands Reach for The Stars”

http://www.brandar.com/

copyright © 2011 Brandar Consulting, LLC  All Rights Reserved

The Best Story Never Told

Well it’s September 1st and I'm returning to my Blog after taking a break this Summer with a story that has been on my mind for a few months.  I work with a lot of clients and prospective clients who are new to the world of Brand Licensing and very often I see Brand owners going out to shop their Brands to prospective licensees or licensing agencies with no real story to tell. What happens all too frequently is the licensor just assumes that the prospective licensee or agent has heard of their Brand and knows its equity and just how strong that equity can be when extended into new categories. It is an assumption that is borne out of being paid to be your Brand’s greatest champion day in and day out in your company. Unfortunately, it leads great Brand Managers to start to sell their Licensing program with no real story to tell at all. The thinking is: “I recognize my Brand is great and has been real successful in the marketplace so others will as well.”


This thinking only torpedoes what could be great licensing programs before they ever have a chance to get started.  Don’t fall prey to this syndrome. Start your licensing effort by working hard to pull together your Brand’s best selling story. Talk about its rich history. Present independent research that demonstrates your brand’s awareness, its equities, its strength and its extendibility. Pen your story as though you are selling to someone who has NEVER even heard of your Brand and sell them hard on why your Brand is right for their in-licensing program. Spend time talking about your Brand’s retail reach, depth and breadth. Provide examples of how and why your Brand is ripe to enter certain product categories. In essence, leave your initial meetings with prospective agents or licensees knowing that you told your Best Brand Story for that is the surest way for everyone to see the value of your brand as a licensable asset. Don’t assume others will see the value of your Brand; prove it to them with a well-researched and well-designed Brand Selling Story.

Often Brand Managers or Licensing Directors are too close to their Brands to be able to look at their Brand’s value objectively and then put together a competent Brand Story to prove it. If you are struggling with this, then I suggest you get help. There are many consultants in the brand licensing industry like my firm, Brandar Consulting, LLC, that can help you get your Brand Selling Story right and provide a strong start to your Brand Licensing Program launch or expansion. You often only get one crack at selling your Brand to a prospective agent or licensee. Don’t waste that opportunity; tell your Best Brand Story right out of the gates.