tag:blogger.com,1999:blog-19644353431624319022024-03-13T11:13:55.460-07:00Best Practices in Brand LicensingMy Blog is intended to provide Licensors with unique insights about successfully managing a Corporate Brand Licensing Program. It is written from the perspective of someone who managed AT&T's Brand Licensing program for many years and has consulted in the Licensing Industry for the past 7 years.Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-1964435343162431902.post-50427533989536646302014-08-20T12:52:00.002-07:002014-08-21T10:20:00.980-07:00“The Right Fit”<div class="MsoNormal">
<span style="font-family: Calibri, sans-serif;">How often do we hear this term in
life.</span><span style="font-family: Calibri, sans-serif;"> </span><span style="font-family: Calibri, sans-serif;">IS it the right fit?</span><span style="font-family: Calibri, sans-serif;"> </span><span style="font-family: Calibri, sans-serif;">Well never has a term meant more to success in
Brand Licensing than “The Right Fit”.</span><span style="font-family: Calibri, sans-serif;">
</span><span style="font-family: Calibri, sans-serif;">The marriage of the right brand with the right product category with the
right Licensee in the right channels at the right price. All must be “right” to
achieve a successful licensed product entry for your brand.</span><span style="font-family: Calibri, sans-serif;"> </span><span style="font-family: Calibri, sans-serif;">But how do you as a brand owner insure that
all is “right” with the world for your licensed property.</span><span style="font-family: Calibri, sans-serif;"> </span><span style="font-family: Calibri, sans-serif;">One word:</span><span style="font-family: Calibri, sans-serif;">
</span><span style="font-family: Calibri, sans-serif;">RESEARCH.</span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">If you want to have a successful
licensing program one where your brand is the right fit for every product category
you enter, you need to take the time, have the discipline and invest the money
to conduct both primary and secondary market research on the product categories
that you are considering licensing your brand into. You also need to invest in brand perception research
upfront to understand what your brand means to target customers through the
attributes it elicits and the awareness it has. <o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Once you understand what your
brand attributes are, you can engage in fielding Brand Extension Research to
understand if the people in the market to purchase in a prospective product category
give your brand “permission” to enter that category. By that I mean that your research needs to
uncover whether the target customer would 1) <u>consider</u> your brand when purchasing
a product in the category and 2) actually <u>purchase</u> your brand over the
competitive brands in that category. By checking in with the actual “in-market” customers
through research, you gain an understanding of whether your brand will “fit”
well in that prospective licensing category.<o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Once you answer the brand fit
question, you can use the many sources out there of secondary industry research
to answer questions like market size & growth rate, royalty rates and
market share to prioritize what licensing categories and what licensees to go
after first and how to negotiate the best royalty rates and minimums possible. And your research results will also help you
sell the best potential licensees out there on why they want your brand on
their product. Why? Because you can
prove it fits!<o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">If you are unsure of how to
tackle either primary or secondary market research in product extension categories,
then consider getting help from a reasonably priced brand licensing firm like
mine, <a href="http://www.brandar.com/">Brandar
Consulting, LLC</a> <o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Insure your success by spending
the time and money to do the research to find the RIGHT FIT for your brand in a
licensed product category. The cost of
this research will pay itself back ten-fold by drastically increasing your
probability of success. You get only one
chance to build a great licensing program; don’t squander it. <o:p></o:p></span></div>
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<span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Mike Slusar<br />
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Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com"><span style="color: #094eb8; text-decoration: none; text-underline: none;">mike@brandar.com</span></a><br />
<br />
<a href="http://www.brandar.com/"><span style="color: #094eb8; text-decoration: none; text-underline: none;">http://www.brandar.com/</span></a><br />
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copyright © 2014 Brandar Consulting, LLC All Rights Reserved<o:p></o:p></span></div>
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com2tag:blogger.com,1999:blog-1964435343162431902.post-13008145543285822762014-01-07T10:18:00.000-08:002014-01-07T10:54:34.376-08:00Commitment<br />
<o:p></o:p><div class="MsoNormal" style="margin: 0in 0in 0pt;">
Happy New Year.<span style="mso-spacerun: yes;"> </span>My
first post of 2014 has to do with that big “C” word Commitment.<span style="mso-spacerun: yes;"> </span>We often hear about the fear of commitment,
but I want to talk today about the lack of commitment and how that impacts
brand licensing. <span style="mso-spacerun: yes;"> </span>More and more I have
been finding that the biggest difference between long term licensing success
and failure is a lack of 100% commitment by the Licensor to their licensing
program.<span style="mso-spacerun: yes;"> </span>Everyone loves the idea of
licensing their brand, building more and new brand equity and, of course,
making more money off their trademark.<span style="mso-spacerun: yes;">
</span>But taking the idea from concept to actual business success takes more
than just deciding that your firm wants to license its brand marks.<span style="mso-spacerun: yes;"> </span>Even if you make the effort to hire an agent
and start prospecting for licensees, are you committed to brand licensing?<span style="mso-spacerun: yes;"> </span>If you find some prospects and sign some
licensing deals, are you committed to brand licensing?<span style="mso-spacerun: yes;"> </span>If you create an annual licensing plan every
year and sign a few more licensees, are you committed to brand licensing?<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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<o:p> </o:p></div>
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True Brand Licensing success resides in 100% commitment to
your Brand Licensing Program over a sustained period of time. <span style="mso-spacerun: yes;"> </span>I have seen clients say they want to start
or revive a faltering licensing program, spend tens of thousands of dollars on
research and planning and then fail to get management commitment to pull the
trigger on a new licensing program.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Worse yet, I have also seen Brand Licensing
Directors succeed in getting approval for their new licensing programs from
upper management, only to find out that that support was just lukewarm and that
their management had no intent of actually signing deals, let alone supporting
licensing agreements once they were signed.<span style="mso-spacerun: yes;">
</span>IF YOUR ORGANIZATION WANTS TO BE SUCCESSFUL AT BRAND LICENSING, YOU NEED
100% COMMITMENT FROM THE ENTIRE ORGANIZATION TO YOUR LICENSING PROGRAM OVER THE
LONG TERM. <o:p></o:p></div>
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<o:p> </o:p></div>
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What is 100% commitment?<span style="mso-spacerun: yes;">
</span>It is a commitment to the discipline needed to be successful at Brand
Licensing.<span style="mso-spacerun: yes;"> </span>You have to be committed to
doing an annual licensing plan and soliciting an annual budget.<span style="mso-spacerun: yes;"> </span>You need to be committed to getting new deals
signed in a timely fashion once they are brought to you. <span style="mso-spacerun: yes;"> </span>You then need to be committed to having the
right organization in place at all times to support your deals.<span style="mso-spacerun: yes;"> </span>Once deals are signed you have to be
committed to supporting and managing the Licensees to success every step of the
way: from timely product development approvals, product approvals, marketing
approvals to ongoing quality control inspections. <span style="mso-spacerun: yes;"> </span>You must align your entire company around
delivering this. <span style="mso-spacerun: yes;"> </span>You have to be
committed to integrating your licensee with the rest of your licensing program
and your core business, particularly at retailers.<span style="mso-spacerun: yes;"> </span>You need to be committed to gaining the
commitment of your core business towards supporting your licensing program. <span style="mso-spacerun: yes;"> </span>You need to be focused on getting your core
business managers and your licensees working together on cross marketing all
branded products. <span style="mso-spacerun: yes;"> </span>You need to be
committed to reselling the merits of your licensing program internally at your
company every year, every month, every day, every minute because that is how
often the winds of change occur in corporate environments.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Commitment to Brand Licensing has to be earned
every day from your Upper Management no matter who they are and it is your job
as Brand Licensing Director to make that happen with your planning, with your
effort and with your actions. <span style="mso-spacerun: yes;"> </span>Brand
Licensing can’t be a side show to your organization because it runs the risk of
being a passing fancy. <span style="mso-spacerun: yes;"> </span>Put simply, there
must be organizational commitment to Brand Licensing as a major initiative in
your firm’s Brand Management Mix on an ongoing basis. Embrace making the Commitment happen and if you need help in making this happen consider contacting my firm <a href="http://www.brandar.com/" target="_blank">Brandar Consulting</a>. <o:p></o:p></div>
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Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-71745827733001814892013-08-26T15:54:00.000-07:002013-08-26T15:54:55.907-07:00The Best Story Never Told - Part 2
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A few years ago, I wrote a blog entry on the <a href="http://licensingbestpractices.blogspot.com/2010/09/best-story-never-told.html"><span style="color: blue;">Best
Story Never Told</span></a> .<span style="mso-spacerun: yes;"> </span>The story
centered on taking the time to build an effective Brand Selling Presentation
for your brand to use with outside partners.<span style="mso-spacerun: yes;">
</span>Never assume that a retailer, brand partner or licensee has any pre-conceived
knowledge about your brand before you meet them.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Don’t
assume your brand sells itself. <span style="mso-spacerun: yes;"> </span>My first
blog post on this topic was admittedly a bit light on the most vital part of
your Brand Selling Story: conducting primary Market Research to measure your
brand’s awareness, equity, and extendibility.<o:p></o:p><br />
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When trying to sell any outside party on your brand, it is
very important that you present them with real customer data from a
statistically significant market research study that is conducted by an unbiased
third party vendor.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Your
main job above all else is to demonstrate your brand’s strength against its
competitive set.<span style="mso-spacerun: yes;"> </span>The typical brand
health measures you want to discuss are unaided and aided awareness, brand
purchase consideration, brand share, net promoter score and brand purchase
intent in new product extension categories.<span style="mso-spacerun: yes;"> </span>It
is very important that you contract with a market research vendor that has both
extensive experience in the branding industry and the market research
discipline; a firm like my company, <a href="http://www.brandar.com/"><span style="color: blue;">Brandar
Consulting, LLC</span></a><span class="MsoHyperlink"><u><span style="color: blue;">,</span></u></span> is an example of one such
firm.<o:p></o:p></div>
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Prior to starting your research project, you will need to
work with your Brand team to “brandstorm” what you believe your brand stands
for and the product categories you think your brand can extend into.<span style="mso-spacerun: yes;"> </span>You then need to use your Brand Research to
validate your perceived brand attributes, purchase drivers and extension categories.<span style="mso-spacerun: yes;"> </span>I call this conducting Brand Permission
research; it is research to determine whether your customer target gives your
brand permission to extend into a new product category – whether that be
through brand licensing, manufacturing it yourself or sourcing product. <span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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Once you conclude your Brand Equity & Extension
Research, you next need to work with your research vendor to effectively
package the results into Brand Selling Slides so that you can tell the story of
your brand’s equity and extendibility through your customer’s eyes and not your
own.<span style="mso-spacerun: yes;"> </span>While you are paid to be your
brand’s biggest disciple, your customer target is your brand’s true fortune
teller.<span style="mso-spacerun: yes;"> </span>Their feedback through your
research study is what matters most to a potential brand partner looking to
leverage your brand.<span style="mso-spacerun: yes;"> </span>So take the time and
expense to solicit your customer target’s opinions so they can tell the best
story possible about your brand.<o:p></o:p></div>
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com1tag:blogger.com,1999:blog-1964435343162431902.post-26582352447887123642013-03-26T12:48:00.002-07:002013-05-07T12:40:14.277-07:00Sizable Guarantees or No Guarantees? Long Term Success May Depend on the AnswerI recently read <a href="http://www.epmcom.com/public/department33.cfm"><span style="color: blue;">The Licensing Letter’s</span></a>
Annual Business Survey results article in their March Issue. <span style="mso-spacerun: yes;"> </span>The
headline was “Royalties Steady, But Licensors and Licensees seek Greater
Flexibility in Total Licensing Payment Packages”.<span style="mso-spacerun: yes;"> </span>The gist of the study was that the
continued increased willingness to negotiate the terms of licensing deals was
affecting guarantees and advances much more than royalty rates.<span style="mso-spacerun: yes;"> </span>Nothing has put more pressure on the size of
guarantees/advances as the poor economy of the last 5 years.<span style="mso-spacerun: yes;"> </span>Licensees have continually pummeled
Licensors with the point that in this economy they bare such increased business
risk in just investing in a new licensed product line, why should they increase
their risk further by having to pay an advance and/or minimum guarantees if they
are not successful.<span style="mso-spacerun: yes;"> </span>I even had one Licensee
client of mine who was arguing hard over minimum guarantees and sales volume
projections say to one Agent, “here is how much guarantee I am willing to pay,
you make up the product sales projections you need to share with your Licensor
client <span style="mso-spacerun: yes;"> </span>‘cause I really don’t care what
that number is.”<span style="mso-spacerun: yes;"> </span>A quote from an agent
in the Licensing Letter article also stated, “Long gone are the days of
licensees’ willingness to provide significant advances and guarantees.” <o:p></o:p><br />
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I decided after reading this article and given my own recent
experiences that this would make a good subject for my first blog post of 2013.
<span style="mso-spacerun: yes;"> </span>The tension that exists on the topic of
royalty guarantees and advances is very acute right now. However, it is a battle
that goes to the heart of long term success of the consummated deal.<span style="mso-spacerun: yes;"> </span>Guarantees exist for extremely good reason; they
were originally developed to protect the Licensor from “burying” the license
grant with a Licensee who is not really committed to the long term success of
the license.<span style="mso-spacerun: yes;"> </span>Guarantees must be sizable
enough as to create a vested interest on the part of the Licensee to make the license
deal successful over the long term. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>So to give too far on guarantees threatens the
long run success of the Licensing deal and long term royalty flows are really
the Holy Grail of brand licensing.<span style="mso-spacerun: yes;"> </span>It
is where the most wealth is created for all parties concerned.<span style="mso-spacerun: yes;"> </span>Guarantees are historically calculated as a
% of the Licensee’s annual sales projections over the life of the licensing
deal.<span style="mso-spacerun: yes;"> </span>What that % needs to be is where
the art of negotiating comes in and why you hire firms like <a href="http://www.brandar.com/"><span style="color: blue;">Brandar Consulting</span></a> to assist you.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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Certainly there can be a degree of flexibility and
creativity as to how the guarantees are negotiated. Cross-collateralizing the guarantees across
years is just one of my favorite ways to provide your licensee with needed flexibility.
<span style="mso-spacerun: yes;"> </span>Giving up on collecting an advance on
royalties is another such tool.<span style="mso-spacerun: yes;"> </span>To me
the advance is a tool that was developed by the Licensing Agent community as a
way to get an agent some commission $ to live off while waiting for the first
royalty streams to materialize, which can be 18 months down the road.<span style="mso-spacerun: yes;"> </span>While the agent may need the advance
commission, the Licensor usually can easily afford to live without it.<span style="mso-spacerun: yes;"> </span>The advance also immediately siphons off
investment dollars that the licensee should be investing on launching your
branded business.<span style="mso-spacerun: yes;"> </span>Guarantees are a
completely different matter; they are calculated and collected when the
Licensee’s Sales projections say they should be.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>For this very reason, relieving a
licensee of the obligation to pay sizable guarantees is a mistake that I
believe will not lead to licensing deals that perform in the long term.<span style="mso-spacerun: yes;"> </span>The guarantee is the skin in the game for the
Licensee over and above their business risk; which at times can only be a
fraction of the guarantee. <span style="mso-spacerun: yes;"> </span>Royalty
guarantees can create an extra sense of commitment from your Licensee that may
well mean the difference between success and failure. <span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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When I ran AT&T’s licensing program, we had an extremely
large guarantee that we negotiated with our largest licensee on a 10-year deal.<span style="mso-spacerun: yes;"> </span>Well the Licensee ran into business
difficulties early on and if we did not have that sizable guarantee in place, they most
certainly would have walked away from our agreement poisoning our most valuable
licensing category likely in perpetuity.<span style="mso-spacerun: yes;">
</span>Because the Licensee did not want to be on the hook for those sizable guarantees,
they remained committed to making the licensed business a success.<span style="mso-spacerun: yes;"> </span>Now we ultimately did lower the guarantees
because they were clearly based on faulty Sales projections, but we still
maintained the guarantees at a sizable enough level so as to maintain this Licensee’s
commitment to our branded product line over their own.<span style="mso-spacerun: yes;"> </span>This AT&T licensing relationship still
exists today some 13 years later and it stands as a testament to the importance
of substantive royalty guarantees in forging long term success in licensing
contracts. <o:p></o:p></div>
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<o:p>Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2013 Brandar Consulting, LLC All Rights Reserved</o:p><br />
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Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com5tag:blogger.com,1999:blog-1964435343162431902.post-22811930685839120682012-12-18T11:16:00.000-08:002013-05-07T12:39:36.165-07:00In times of Crisis, Great Brands can still turn to Brand Licensing<br />
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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.<o:p></o:p></div>
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And the best
place to start is to work with a company like mine, <a href="http://www.brandar.com/"><span style="color: blue;">Brandar Consulting</span></a>,
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.<o:p></o:p></div>
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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.<o:p></o:p></div>
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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.<o:p></o:p></div>
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<span style="font-size: medium;"><o:p><o:p>Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2012 Brandar Consulting, LLC All Rights Reserved</o:p> </o:p> </span> </div>
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<br />Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com1tag:blogger.com,1999:blog-1964435343162431902.post-52844440518998329122012-08-13T09:18:00.000-07:002013-05-07T12:38:06.272-07:00How Do You Define Success in Brand Licensing?<o:p> </o:p><br />
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While attending Licensing Expo 2012 this year in Las Vegas, <span style="mso-spacerun: yes;"> </span>I moderated a
panel on “How to Work Effectively with Licensing Agents and
Consultants?”<span style="mso-spacerun: yes;"> </span>One of the questions
from the audience was “How do you define Success in Brand Licensing.”<span style="mso-spacerun: yes;"> </span>My answer may surprise you.<span style="mso-spacerun: yes;"> </span>To me the ultimate signal of success is the
number of long-term licensing partnerships an agent, consultant, licensor or
licensee has.<span style="mso-spacerun: yes;"> </span>Why do I say this and not
the number of deals we signed this year or the amount of royalty revenue we are
earning.<span style="mso-spacerun: yes;"> </span>The reason I say this is
because the real hard work in licensing starts after the deal is signed.<span style="mso-spacerun: yes;"> </span>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. <span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>The real money to be earned
in licensing is in cultivating long-tenured licensing success stories. <o:p></o:p></div>
<br />
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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.<span style="mso-spacerun: yes;"> </span>Unfortunately, this is the rarity in the
licensing industry.<span style="mso-spacerun: yes;"> </span>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. <o:p></o:p></div>
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What’s the recipe for long-term success?<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;">
</span>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. <span style="mso-spacerun: yes;"> </span>What follows is a list of important steps to
making a licensee a long-tenured successful partner.</div>
<br />
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Engage in brand immersion with your licensee</div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Participate in the licensee’s Product
Development Process</div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Support your licensee’s Sales efforts with retailers</div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Assure that the licensee’s marketing materials
and packaging are consistent with your style guides</div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Monitor the licensee’s customer service center
to make sure the service experience is consistent with your brand and service
metrics</div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Test and approve all products with a defined
process before they are released in the marketplace</div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Continue to test products bought at retailers to
make sure they are maintaining quality over time</div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Inspect the factories where the product is being
made</div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Keep close tabs on the licensee’s Sales results
over time</div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Cross-market licensee product with other
licensees and your core business </div>
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span>Participate in your licensee’s annual product
and market planning processes</div>
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If you work hard at all these things you will have a chance
at having long-term successful licensing relationships.<o:p></o:p></div>
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One of my mentors in the industry was down on Licensing as a
profession when he retired.<span style="mso-spacerun: yes;"> </span>He felt that
licensing was just a “grand ruse” on the consumer;<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>I take a different view.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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. <span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
Look out for my next post coming this Fall on: Licensing:
Brand Building or Brand Busting?<br />
<br />
<o:p>Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2012 Brandar Consulting, LLC All Rights Reserved</o:p><br />
<o:p></o:p> </div>
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com4tag:blogger.com,1999:blog-1964435343162431902.post-73431981451054757082012-03-29T17:45:00.007-07:002013-05-07T12:37:23.387-07:00Getting 'em to Sign on the Line which is Dotted...Welcome to my first post of 2012.<span style="mso-spacerun: yes;"> </span>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!”<span style="mso-spacerun: yes;"> </span><br />
<br />
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,<span style="mso-spacerun: yes;"> </span>done all your due diligence to qualify your licensee and you have written and negotiated the contract.<span style="mso-spacerun: yes;"> </span>All that is left is getting your Senior Management to sign on the dotted line of the contract.<span style="mso-spacerun: yes;"> </span>This is the easy part, right?<span style="mso-spacerun: yes;"> </span>WRONG.<span style="mso-spacerun: yes;"> </span>This can be the very hardest part of the licensing process.<span style="mso-spacerun: yes;"> </span>It’s what puts gray hair on Licensing Agents’ heads.<span style="mso-spacerun: yes;"> </span>This part of the process is very often taken for granted by Licensing Managers at Corporate Licensors.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p><br />
<br />
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</div>
Often Brand Licensing Managers/Directors don’t take the time to sell their key management stakeholders on the merits of a new licensing deal.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Very often your management’s <span style="mso-spacerun: yes;"> </span>response can be: “you are licensing our company’s more valuable asset, our brand, to a no-name company for how much money?!”<o:p></o:p><br />
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How do you avoid this situation and get your Executive Management committed to your deal.<span style="mso-spacerun: yes;"> </span>First off, you start the process by talking with your Senior Management long before they need to sign your deal.<span style="mso-spacerun: yes;"> </span>You explain what it means to license your brand, the partnership you are seeking, and the product category you are targeting.<span style="mso-spacerun: yes;"> </span>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. <span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><o:p></o:p><br />
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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.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Typically these brand impressions will drive far more value to your brand than the royalties you generate.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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, <a href="http://www.brandar.com/"><span style="color: blue;">Brandar Consulting</span></a>, to assist you. <o:p></o:p><br />
<br />
<br />
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” <span style="mso-spacerun: yes;"> </span>and enable you to “<a href="http://licensingbestpractices.blogspot.com/2011_08_01_archive.html"><span style="color: blue;">be a closer</span></a>.”<o:p></o:p><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><o:p>Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2012 Brandar Consulting, LLC All Rights Reserved</o:p></o:p></div>
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-58892843059729640682011-11-03T11:17:00.000-07:002014-08-20T12:44:57.313-07:00Coffee's For Closers<div class="MsoNormal" style="margin: 0in 0in 0pt;">
Summer’s over and Fall is in full swing so it is time to work our butts off again.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>It is really those 8 months out of the year that drive most of our productivity.<span style="mso-spacerun: yes;"> </span>Well now that I am in the stretch run of busy mode again, I thought I would make my last post of this year.<span style="mso-spacerun: yes;"> </span>It has to do with following up my <a href="http://licensingbestpractices.blogspot.com/2011/08/be-closer.html"><span style="color: blue;">Be A Closer</span></a> Post.<o:p></o:p></div>
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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.<span style="mso-spacerun: yes;"> </span>If you have ever seen the movie Glengary Glen Ross, you will remember the infamous line from the all-time classic <a href="https://www.youtube.com/watch?v=-AB-iLaEisU"><span style="color: blue;">5 minute cameo</span></a> of Alec Baldwin: “Coffee’s for Closers Only.” <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>You can click on the link if you have not seen it; I warn you it has some very graphic language.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>And this is the parallel that I can draw to your Corporate Brand Licensing Function.<span style="mso-spacerun: yes;"> </span>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. <o:p></o:p></div>
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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.<span style="mso-spacerun: yes;"> </span>Without it, you are doomed to fail before you even have your first prospective licensee meeting.<span style="mso-spacerun: yes;"> </span>Why do I say this, well because when you engage in brand licensing you are licensing your company’s most valuable asset.<span style="mso-spacerun: yes;"> </span>And while Brand Licensing done well can be a great brand building tool; Licensing done poorly can damage your brand badly. (See post <a href="http://licensingbestpractices.blogspot.com/2010/04/why-good-brand-licensors-sleep-at-night.html"><span style="color: blue;">“Why Good Brand Licensors Sleep at Night”) </span></a><span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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So how do you figure out where the best organization is for Brand Licensing to report to?<span style="mso-spacerun: yes;"> </span>Survey your company and pinpoint the organization that will be most threatened by your licensing function.<span style="mso-spacerun: yes;"> </span>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. <span style="mso-spacerun: yes;"> Another possible landing spot could also be an </span>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. <o:p></o:p></div>
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And THAT is really the hardest part of closing Corporate Brand Licensing deals: getting your Senior Management to “<strong>sign on the line which is dotted</strong>.” More on that next time…<br />
<br />
<o:p>Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
“Helping Brands Reach for The Stars”<br />
<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2011 Brandar Consulting, LLC All Rights Reserved</o:p> </div>
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-63645776424082920592011-08-02T14:43:00.000-07:002013-05-07T12:32:21.304-07:00BE A CLOSERI’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:<br />
<br />
<br />
“The key to this business is personal relationships”<br />
<br />
“If this [points to heart] is empty, then this [points to head] doesn't matter.”<br />
<br />
“Roll with the punches, tomorrow is another day.”<br />
<br />
“ 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.”<br />
<br />
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: <br />
<br />
“Remember people want to work with closers. So <strong>BE A CLOSER!”</strong><br />
<strong></strong><br />
Mike Slusar<br />
<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
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copyright © 2011 Brandar Consulting, LLC All Rights ReservedMike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-88764633544888168672011-05-10T10:31:00.000-07:002013-05-07T11:40:49.330-07:00Internal Selling, It Never EndsWell 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.<br />
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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. <br />
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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.<br />
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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. <br />
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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.<br />
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Mike Slusar<br />
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Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
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<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2011 Brandar Consulting, LLC All Rights Reserved<br />
Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-60612052787919925772010-09-01T11:37:00.000-07:002013-08-26T15:50:25.152-07:00The Best Story Never ToldWell 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.” <br />
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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.<br />
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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, <a href="http://www.brandar.com/" target="_blank">Brandar Consulting, LLC</a>, 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.Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com2tag:blogger.com,1999:blog-1964435343162431902.post-19044386603249308962010-06-16T08:24:00.000-07:002013-05-07T11:39:36.900-07:00Why Good Brand Licensors Sleep at Night – Part 2I just returned from the International Licensing Expo in Las Vegas. While I was there, I was able to participate in Licensing University and run some seminars; one of which was Best Practices in Corporate Trademark Licensing. I met a fair amount of people who are new to brand licensing at the show and it was clear to me that this blog post: Why Good Brand Licensors Sleep at Night – Part 2 is long overdue for many. In my last post I spoke about the organizational structure of your Licensing Function being absolutely critical to your overall long term licensing success. Well in Part 2, I am cutting to the chase. You want to know the main reason I slept at night when I ran AT&T’s brand licensing program for ten years? I had outstanding Legal support and a world class Quality Assurance Function. To me, that is where the rubber meets the road in successful brand licensing functions. It was no accident that I had great support in these two areas because I went out to find, lobby and recruit that support.<br />
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My main legal support was Frank Politano, AT&T’s Senior Trademark Counsel. I really did not know just how skilled Frank was at brand licensing until I sought him out to see if he could support the proactive expansion of our Brand Licensing function. You see at times Trademark Lawyers may not have a lot of experience in actually doing Trademark Licensing. In Frank’s case, he was a tremendous resource for me as he had so much experience he has actually co-authored a book on the topic for Aspen Law: Drafting License Agreements, now in its Fourth Edition. I also negotiated supplementary legal support from my licensing agency as well. It was up to Frank to manage and utilize those additional resources. He did this quite often. I cannot stress enough the value of having a great Trademark Legal team to insure your contracts are drafted in such a way as to fully protect you as the licensor. Fortunately for me, Frank actually left AT&T and is now available for hire to all in the licensing industry at K&L Gates. <br />
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The other critical aspect to my being able to sleep at night when I ran AT&T’s licensing function was having a world class Quality Assurance function. Because of the nature of our program, we did a lot of licensing in the consumer electronics category. My first thought was to see if I could find a resource internally at AT&T Labs that could perform this type of Quality Assurance. I was lucky enough to find some Electrical Engineers who had spent 20 years designing and doing quality assurance for AT&T branded phones and cell phones. They were more than eager to help me. They were trained as ISO auditors and in Six Sigma Quality processes. I was able to pay them an annual fee to do all my quality assurance. Eventually, AT&T laid them off so they formed Quality Assurance Management Inc. www.pqam.com . The company is run by Jeff Lumpkin. Jeff has a passion for Quality Assurance. This blog post is really the brain child of Jeff as he used to introduce himself as “the reason I sleep at night”. He used to say that he didn’t sleep at night so I could. At the end of the day, Quality Assurance is the bedrock of any long-term successful Brand Licensing Program. Poor product quality has ended many licensing relationships prematurely and indeed, ends many Corporate Brand Licensing programs abruptly as well. So if you are building a brand licensing function, take the time to find extremely qualified Quality Assurance resources. Ideally, you want professionals who are trained in ISO and Six Sigma compliance, have a passion for product quality and have an engineering or quality testing background. <br />
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When people ask me the key to successful Brand Licensing Programs, I tell them its making sure you secure and utilize strong legal support and quality assurance functions from your program’s very start. Why? So you can Sleep at Night!<br />
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Mike Slusar<br />
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Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
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copyright © 2010 Brandar Consulting, LLC All Rights ReservedMike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-366120807888413902010-04-21T11:04:00.001-07:002013-05-07T11:38:44.312-07:00Why Good Brand Licensors Sleep at Night – Part 1I know from my many years of running AT&T’s brand licensing program that it can be tough to learn to live with the risk that is associated with licensing your company’s most valuable asset; its brand. While I was licensing AT&T’s brand to other firms to use on their product or service, I had to live with the fact that if my licensee screwed up, AT&T’s brand could be severely damaged in the marketplace. And that damage could be very visible to my senior management. I always lived under the mantra that I was one bad licensing deal away from ending AT&T’s brand licensing program. The reason I made this connection was because I knew that the royalty revenue I could earn AT&T from my licensing program paled in comparison to the monetary damage one of my licensees could do to the AT&T brand. You see royalty revenue is usually a drop in the corporate ocean of revenue and with AT&T generating $123 Billion in Revenue annually, my tiny royalty stream was less then a drop, it was a molecule. Hence, if any of my deals ended extremely badly, it would probably mean the cancellation of my licensing program entirely and the end of my career at AT&T. While I was running AT&T’s program, one of my contemporaries at a competitive company met this fate when the wife of the CEO of that firm noticed one of their licensed products in a close-out bargain bin at a Consumer Electronics retailer. She bought the product and shared the story and the product with her husband. It was the end of the brand licensing program at that firm and the end of that Brand Licensing Director’s job.<br />
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So that begs the question, why did I assume the Director of Licensing role at AT&T and bare that level of risk. The simple answer is that brand licensing done well can be tremendously successful, rewarding personally and value-added for your company both in terms of brand building and revenue generation. The problem is that it takes tremendous vigilance and hard work to do brand licensing really well. And far more deals fail then succeed. The key is working hard to build a licensing organization around you that is filled with extremely talented people all working toward the common goals of: 1) attracting only the best licensees to your brand, 2) choosing the right categories to enter into, 3) doing extremely thorough due diligence to choose the “right” licensee, 4) negotiating a thorough contract and 5) proactively managing & partnering with your licensee to insure their marketplace success. If you do all these things well, you sleep well at night. BUT you must surround yourself with the right team to make that happen. This is not to say your team always sleeps well at night. ;-) There are always going to be issues to manage, but if you pool the risk of brand licensing around a talented licensing group, everyone is better able to manage that risk appropriately and succeed. The key is how you build that organization.<br />
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More on that next time in Part 2 of this thread.<br />
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Mike Slusar<br />
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<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2010 Brandar Consulting, LLC All Rights ReservedMike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-83065619333818728892009-12-27T10:28:00.000-08:002013-05-07T11:37:27.977-07:00Choosing the RIGHT Licensing AgencyMy 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.<br />
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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.<br />
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As you evaluate licensing agencies, you want to do your due diligence in each of these 4 areas:<br />
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<strong>1) Their experience in the categories you want to enter</strong><br />
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. <br />
<strong>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.</strong><br />
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<strong>2) Their strong network of manufacturers in those categories</strong><br />
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.<br />
<strong>3) Their ability to negotiate lucrative licensing deals in the past in those categories</strong><br />
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.<br />
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<strong>4) Their track record of long term success.</strong><br />
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.<br />
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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. <br />
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I hope you have found my insights helpful here. I leave you with this applicable anecdote. In <em>Indiana Jones & The Last Crusade</em>, 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. <br />
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My next post will look at how to structure your licensing organization for success.<br />
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Mike Slusar<br />
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Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2009 Brandar Consulting, LLC All Rights Reserved<br />
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Mike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com3tag:blogger.com,1999:blog-1964435343162431902.post-50688206977710411422009-12-09T12:35:00.001-08:002013-05-07T11:36:31.112-07:00Selling a Licensing Agency In for Your Corporate Brand Licensing ProgramMy last blog post dealt with the lack of adequate resources being one of the major impediments to building a successful Brand Licensing Program. At the end of that post, I talked about one of the best ways to supplement the resources of your Corporate Licensing Function is to research and hire a good brand licensing agency. The process of finding the right agency and compensating them at a fair rate can be the topic of my next blog post. This post will deal with how you sell hiring an agency to your Senior Management once you think you have found an agent that meets your needs at the right price.<br />
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My experience running AT&T’s licensing program for a number of years taught me that you must sell your Agency to Senior Management for that model to be a success over the long term. Each time a new Chief Marketing Officer came in, I had to bid out and resell the merits of using a licensing agency as part of my licensing program. The cold reality is that many Senior Managers in Corporations view the use of an Agent as a cop-out by the Licensing Director. In their minds, farming out the License Prospecting Function to an outside group is handing over a responsibility that the Licensing Director should be doing on their own. This gets compounded when Senior Management sees the size of the agent commission. They view the commission as giving the company’s money away. Opposition can be strong and once you sell your agent in, the process never ends. You must constantly continue demonstrating their worth to Senior Management.<br />
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So what are the best ways to sell having an agent for your Corporate Licensing program. First it is important that you work together with your chosen agent on their Sales presentation making sure it is customized to your industry and has examples in it that you know your Senior Management can relate well too. If you have chosen your Agent wisely, they should have a lot of examples of prior success that fall in or close to your industry. At the same time, it is very important that you document just how much time and equivalent headcount it would take internally to perform the role that your agent would fill. As I explained in my last post, it is very likely that your company will give you no where near the headcount you need to build a successful Licensee Sales function. Licensee Sales is the most time consuming function in your licensing program. What results from your under-resourced function is a Licensing Program that flounders; growing very slowly and certainly not at a level Senior Management expects. Use the Agent’s presentation to Senior Management to demonstrate the size and power of the Agent’s network and the value to be exacted by putting that network to work for your company!<br />
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Make sure that you bring your prospective Agent in for a meeting when all the key Senior Management stakeholders are available. If an important stakeholder cancels, re-schedule the meeting. Also I always found it best to allow time for Senior Management to get to know the key players from the Licensing Agency on a personal level. So if at all possible, see if you can schedule a lunch or a dinner around the meeting, even if the lunch is sandwiches brought into a meeting room. Hitting it off on a personal level with Senior Management is one of the best selling tools there is. I always wanted my Senior Management and my Agent to feel like they had built a relationship in that very first meeting. And I wanted that relationship to lead to talking to each other directly down the road without my presence or facilitation. I never felt threatened by my Agent and my CMO having direct conversations; to the contrary, I actually felt better about my position in our organization because my management would dial up my agent at any time to ask them a question. It gave my Senior Management more of a stake in my success and I felt like I created a new resource for them to tap.<br />
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The final critical area you will need to tackle will be paying the agent’s commission. This is not a topic that your Agent should deal with in their presentation. You should address this with your Senior Management yourself after the meeting. Make sure you have done your homework and gathered benchmarking data on standard agent commissions. Try to demonstrate how the commission structure you negotiated with this agent is unique and slightly below the average. The going rate for most corporate licensing programs is 35% of the net royalty stream. This commission rate is for a full service agency; by this I mean an agent that does license program planning, licensee prospecting, due diligence, deal negotiations, contract drafting, contract administration, royalty administration and assists with marketing & product approvals as well as ongoing quality control. You can get lower commission rates for less services from your agent. I don’t recommend this approach and a good agent won’t like it either. You see a good agent will recognize that your success is their success. They only get paid if a license turns out to be successful. A good agent will want an involved role in insuring success. Lower commission rates can also be had for more established or promising brands where the agent sees a large upside. I digress though. The main thing you need to sell your Management on in terms of paying a commission is that they are paying a commission on NEW revenues. Yes a good agent should be able to find and close deals that you could not get or negotiate on your own. So getting 65% of new revenues is better than getting 100% of no revenue at all. The other point to make to your Management is that a 65% margin is likely to be a much higher margin than the standard margin for the core business of your company. Even with these points their may still be reticence in your Management to bring the agent on board to represent your WHOLE licensing business. When this hurdle came up with my own AT&T program, I was able to convince my agent that we would assign them certain product categories to work each year. Once AT&T assigned them a category it was theirs to work for the year. If we then received inquiries directly at AT&T about that category, we passed them to our agent to work. In this fashion, we were able to keep certain categories which were extremely close to our core equity for ourselves as they were easier to do licensing deals on and receive 100% compensation; my Management felt this was a more equitable approach.<br />
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Hope this helps. Next time we will look at how to find the right agent for your corporate licensing program. And after that I will turn to how to staff a licensing function for success.<br />
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Mike Slusar<br />
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<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a> <br />
<br />
<br />
“Helping Brands Reach for The Stars”<br />
<br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
<br />
copyright © 2009 Brandar Consulting, LLC All Rights ReservedMike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0tag:blogger.com,1999:blog-1964435343162431902.post-87333493085848402222009-12-01T11:16:00.000-08:002009-12-03T11:50:18.065-08:00What's one of the Biggest Hurdles to building a Successful Licensing ProgramWhat's often the biggest barrier to success in terms of starting up or expanding a Brand Licensing Program? This is a common question that I get asked a lot as a consultant in the industry. I will tell you, more often then not, it is trying to build a brand licensing program without receiving adequate resources from your company to do the job right. Typically a Licensing function in a corporation might be staffed by a Director of Licensing and maybe one support person if you are lucky. What will come along with that title is probably an aggressive royalty revenue target that you will need to achieve in your first year. Unfortunately, most licensing functions are borne out of a desire to generate additional revenues from you brand, but there is very little forethought or research that goes into staffing a successful licensing function to achieve such a goal. Very often the company setting up the function may be under headcount growth restrictions particularly for non-core activities like brand licensing. I would say the norm in the industry is that a company NEVER will give its licensing function the resources it really needs to be successful. <br />
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There also can be a chicken or the egg mentality in that management will tell you that you can have more resources once you close a few successful deals and start generating a profitable revenue stream. The problem is getting those first few licensing deals closed can be the hardest part of starting a licensing program. Often programs will languish for a year or two as one or two licensing professionals try to act as their own sales force in scouting out new licensing deals. But serving as your own sales force is more than a full time job for a Director of Licensing whose responsibilities also include legacy licensee management, licensed product quality control, cross marketing between licensees and internal business units, marketing approvals and meeting with retailers to help get licensed product wider distribution. Trying to cover new License Sales on a part-time basis is simply a recipe for very slow program development. <br />
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So what's a Corporate Licensing Director to do? My advice is to quickly tee up the analysis and discussion of what resources your licensing function truly needs to achieve its goals. If your company is unwilling or constrained from providing these resources, then it is time to consider hiring a licensing agent. Licensing Agencies can serve as your outsourced sales force, aid in licensee background due diligence, negotiate your licensing deals and assist in contract drafting. Once a deal a signed an agent can also be helpful in on-boarding your new licensee and assisting in executing on the promise of the new licensing relationship. Remember their compensation is commission based so the new licensee’s success is their success. Their interests are perfectly aligned. To me a good licensing agent can be the biggest key to success for a new licensing program.<br />
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At times, licensors have to arrive at this conclusion the hard way, they try to go-it-alone without the proper resources, experience or the network to be a successful licensor and their program will languish for a few years with very poor results. Fed up with the lackluster performance Management finally will bite the bullet and decide it can now stomach paying an agent their commission rate in return for getting the licensing program on a much faster track for success. Unfortunately, by that point they have lost time, licensing opportunities and years of royalty revenues. The reticence to bring an agent on-board quickly in the early stages of a licensing program because of the "dreaded' commission payment is the biggest hurdle to building a successful licensing program with limited resources. When I encounter this "commission" reticence, I ask my clients this simple question, which is better getting 70% of millions of dollars in agent generated royalties or getting 100% of the zero dollars or much lower royalties revenues that you may be able to generate on your own. The healthiest way to look at agents is that a good agent will typically generate royalty revenue that you would not be able to attract on your own; truly incremental revenue. I’ll pay a commission on revenue incremental to my own licensing efforts every time. <br />
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My next post will deal with successfully selling a licensing agent into senior management.<br />
<br />
Mike Slusar<br />
<br />
Managing Director & Owner<br />
Brandar Consulting, LLC<br />
<br />
“Helping Brands Reach for The Stars”<br />
email: <a href="mailto:mike@brandar.com">mike@brandar.com</a><br />
<a href="http://www.brandar.com/">http://www.brandar.com/</a><br />
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copyright © 2009 Brandar Consulting, LLC All Rights ReservedMike Slusar - Brandar Consulting, LLChttp://www.blogger.com/profile/09505905877655816962noreply@blogger.com0