Choosing the RIGHT Licensing Agency

My lost blog post dealt with how to sell the use of a brand licensing agency into your company. This blog post will deal with how you choose the right licensing agency to bring to your senior management for approval.

The process for choosing the right agency for your Corporate Brand Licensing Program is very similar to the very reasons that justify hiring a licensing agency at all. You hire a licensing agency for: 1) their experience in the categories you want to enter, 2) their strong network of manufacturers in those categories, 3) their ability to negotiate lucrative licensing deals in the past in those categories and finally 4) their track record of long term success.

As you evaluate licensing agencies, you want to do your due diligence in each of these 4 areas:


1) Their experience in the categories you want to enter
You really want to find an agency that has staff that has worked in the categories you are looking to license into. If your brand’s equity is fashion-based, you may want to find an agency that has shown success in soft goods, furniture, jewelry and fragrances. If you brand is food-based, you may want an agency who has expertise in licensing food categories and household goods. Perhaps your brand is a kids-based entertainment property, well then you would want to find an agency who has a good track record for success in the toy and gaming category. Or maybe your brand is a technology brand, you may want to look at an agency who has shown great success in licensing in the consumer electronics category.
A critical note of caution here. While you want an agency with experience in the categories you want to enter, you need to make sure that they are not already under contract with a brand that would be a direct head-to-head competitor with your brand across many categories as this would be unmanageable conflict of interest.

2) Their strong network of manufacturers in those categories
As part of your agency due diligence, you need to get an understanding of the strength of your agencies network in the categories you may want to enter. They may or may not have current deals going on with their network, but you will want to understand where their network is and how strong it is. Most agents probably won’t tell you the names of the licensees and manufacturers they work with until after you have hired them. But if you are a good sleuth, you may be able to piece things together from current deals they have and past deals they have done over the years as there will likely be a track record of PR around those deals.
3) Their ability to negotiate lucrative licensing deals in the past in those categories
This is where the rubber meets the road. While you want your licensing program to be first and foremost, a brand building exercise, you will be judged by how financially successful your program is. You are hiring an agent to be your sales force to bring in new licensing deals. You want to find an agent who has a track record of negotiating larger, financially successful licensing deals. When I ran AT&T’s program, I used to always say it took me the same amount of time to prospect, close and manage a 6-figure deal as it took me to do a 7-or 8- figure deal. Why would I want to spend my fixed amount of time on 6-figure deals. You need an agency that understands this and can deliver you the larger deals relative to your brand’s potential.

4) Their track record of long term success.
This is last in the pecking order because it is the order that I think you should attack your agency due diligence. It is the MOST important criteria for you to evaluate. You want to see that the agency you are looking at has a lot of long term clients. You want to see licensing deals that have lasted many years. You also want to see a lot of long-tenured employees. You want to ask the agency, precisely what personnel will be working on your account, what are their backgrounds in the industry and how long have they been with the agency. You a paying an agency to have seasoned employees with relevant backgrounds working on your account at the most junior levels. Very often agents are hired because of the strength of their senior leadership team during their sales pitch, but the reality is that you may only get a small fraction of senior leadership time working on your account. That’s OK if the agency’s junior managers have a strong track record of industry success. It’s also important to find out during due diligence just how much time will be devoted by all levels of agency management to your account. Long term success means an agent who: is able to find deals that last, has good people in their agency nurturing relationships with both licensors and licensees, retains valuable employees and retains valuable clients.


You may be asking yourself how in the world do I find all this information out about an agency during the due diligence process. Ask for references. And make sure to get references from both current and former clients. You may find this surprising, but a good agent will easily have former satisfied clients to use as references, companies where the agent grew and established their programs to a point where the client grew out of the need for an agency. You also want to make sure you get references from both current and former licensees as well. Lastly, you can hire an industry consultant, like myself, who has a great handle on the agents that are out there, what they are good at and which one might be the best fit for your licensing program.


I hope you have found my insights helpful here. I leave you with this applicable anecdote. In Indiana Jones & The Last Crusade, the culmination scene has Indy choosing the Holy Grail from a sea of chalices in all shapes and colors in an ancient temple. Before choosing, the Immortal Knight Templar guarding the Grail for centuries warns Indy, “But choose wisely, for while the true Grail will bring you life, the false Grail will take it from you.” The same goes here. Choose wisely, as an agency that is a good fit will breathe life into and grow your brand, while a bad fit could harm your brand and cripple your licensing program for years to come.

My next post will look at how to structure your licensing organization for success.


Mike Slusar


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


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