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/

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