How to find and qualify new licensing opportunities

January 18, 2018 Licensing Comments (2) 425

One of the most significant challenges for licen­sors is to keep the opportunity pipeline full. Regardless of the size of the licensing pro­gram, finding and qualifying prospective li­censees can be a challenge. Some licensors need more opportunities to explore, while other licensors have the opportunities but do not have a defined qualification pro­cess. Unfortunately, some licensors have both challenges. To overcome those challenges a licensor might consider the following sales and business development techniques.

Key assumptions

Let’s start with three fundamental assumptions:

  • You have a strategy for each of your licensed properties;
  • You’ve identified the product cat­egories that align with your core brand message and best support your li­censing growth goals; and
  • You have a realistic understanding of the value of your brand and licensed properties.

While having a defined strategy for each licensed property and knowing the catego­ries which each property fits best is a great starting point, you also need to have a real­istic expectation of your licensed property’s value to a prospective licensee. For example, you may have a top brand in one category, but your brand might not bring significant or even incremental value to the market leader in another category that you’re targeting; therefore, your brand probably has less value for that category leader than it would for the number two or number three player. This will be a crucial factor in targeting and qualifying licensing prospects.

With these assumptions in mind, you can begin developing or refining the process to grow your licensing program.

Finding prospective licensees

Prospective licensees fall into two camps: Those who know and see value in your brand, and those who do not. The former is likely to be already knocking at the door to pitch new ideas, but the latter creates the biggest challenge for most licen­sors.

The best way to identify possible new op­portunities is through Environmental Scan­ning—careful monitoring of the marketplace—for new licensing deals in your target product categories. You can also identify potential opportunities by not­ing specific changes at companies within those target categories, which might in­clude:

  • Changes in licensing, marketing, or other senior leaders;
  • A shift in organizational strategy, new product line development or line extensions; or
  • Expanding markets—either demo­graphic or geographic.

Excellent sources of such information for Environmental Scanning purposes include LIMA, licensing trade publications and other marketing and business publications. It is important to note that Environmental Scanning typically provides advance indica­tors of possible opportunities, not those op­portunities already clearly defined. You will have to invest time to determine if an opportunity does indeed exist, and how you might leverage your licensed properties into the mix.

When a prospect is identified, it is impor­tant to create an ongoing marketing and sales program to keep connected. Like any type of marketing program, a prospective licensee needs regular communication to keep your brand top-of-mind for the time when the opportunity does present itself, and the licensor’s sales and business devel­opment team steps forward to qualify and close the opportunity.

Qualifying new opportunities

Regardless of the source, once you have identified what you believe to be an excellent prospective licensee, it is important to have objective criteria in place to help you evalu­ate fit with your brand. The majority of pro­spective licensees will look good on the surface and will be reputable, but a deeper dive will give you a clearer picture of how well the company, its products, and its busi­ness practices align with the values and ex­pectations of your business.

The first step in collecting the informa­tion you need to qualify further a prospec­tive licensee is via a licensing application. The qualification process should include a review of objective matters such as:

  • The applicant’s financial solvency, possible legal issues (including prod­uct recalls, infringements, social- and/or labor-related matters);
  • Experience in developing and launching similar products in the marketplace;
  • Experience working with other licen­sors, and;
  • Reputation in their distribution chan­nels for meeting demand.

A licensor may need advice from finance or legal experts for some areas of review.

 

Key Point – Ask: Does the market need this product? 

The market need or opportunity for the proposed licensed products is critical in the licensor’s decision process. A licensor should also evaluate the prospec­tive licensee’s understanding of the market­place, the market needs for the product, the strength of the product development and launch plan, and the company’s commit­ment to market the licensed product. Then consider whether the licensor’s brand truly brings value to the product in the marketplace. If all align, it might be a good opportunity to further consider.

 

These review steps are somewhat sub­jective, yet an experienced licensor will quickly spot those proposals that are likely to fall short of expected performance if a deal is completed.

A prospective licensee who scores well in all of these review categories is clearly a catch. Those who do not may still be a good match for a licensor; it depends on the tol­erance level for imperfect feedback in one or more of the review categories.

Some licensors develop a rubric or score­card for evaluating prospective licensees and their tolerance for variances in the review categories is built into the scoring process. This approach also helps to make the review process a little more objective. The most significant challenge in finding and qual­ifying new licensing opportunities has more to do with the lack of structured, formalized systems for achieving these goals.

Keep in mind the best opportunities for a licensor are not those that are readily ap­parent.  Licensors will have more significant success in growing licens­ing opportunities by looking not at “what is,” but at “what can be.” A defined process for identifying and qualifying opportunities will help you find and leverage “what can be” much more quickly.

 

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A version of this post was originally published in the Licensing Industry Merchandiser’s Association (LIMA) Bottom Line newsletter.

David Harkins is a serial entrepreneur with significant experience in branding, strategy, licensing and marketing.

In his spare time, he consults, coaches, speaks, writes, hikes, explores, and creates art. Although, not necessarily in that order.

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You cannot control your brand

January 3, 2011 Branding Comments (0) 358

A company, like an individual, can only control its intention, its action, and its reaction.

If you think about it, intention, action, and reaction are only about 1/4 of a brand’s value. The customer controls the remaining 3/4 of the brand’s value based on their perceptions of how the company delivers, whether it be product quality, service and fit the customer’s needs, values and expectations.

Company’s influence their brand value through interactions. Customer’s control brand value.

If you got up this morning believing your company is in control of its brand, your year is already off to a rocky start.

The good news is it’s only January 3. You still have a few days to make changes.

Will you make them?

David Harkins is a serial entrepreneur with significant experience in branding, strategy, licensing and marketing.

In his spare time, he consults, coaches, speaks, writes, hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below:

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People are talking. Are you listening?

April 28, 2009 Marketing Comments (0) 288

Hearing is a funny thing.

One can hear, but not be listening.  One can listen, but not hear what’s being said.  Either way, the conversation goes on just the same.  People are talking to you and about you, but you may not be making the connection that it’s “you” who is the topic of the conversation.  Take it from a guy who has had the benefit of hearing impairment most of his adult life.

Those same conversations go on about organizations and brands every day.  Everyone talks, but few organizations truly listen.  It seems to me that most organizations are “hearing or listening impaired,” and the older the organization, the worse the problem.  Most organizations try to hear what is being said, but some are still using an old-fashioned hearing aid (ear trumpet).  There are others who let their hearing aid batteries weaken or worst of all, even others have removed their hearing aids because they don’t like what their hearing.

Don’t believe me?  Do you work for any of these organizations?

The Ear Trumpets
Organizations listening to customers with the ear trumpet funnel many voices down a long tube where only the loudest are heard.  In an organization, this is like sending all the calls to “customer service” or the “help desk.”  The ear trumpet solution works poorly for the hearing impaired and even worse for organizations.  Think about it: just because the organization is not hearing the softer voices doesn’t mean friends, neighbors, and competitors aren’t.

The Weak Batteries
Those organizations that operate on weak battery power for their hearing device miss critical elements of the conversation with their customers.  The discussions continue, but the organization picks up only bits and pieces—like a conversation with your mom on a bad mobile phone connection.  She keeps talking; unfortunately, you’ve dropped enough of what she is saying that don’t realize you’ve been offered a free trip to the Bahamas and declined to go.  The same thing happens with customers when an organization only hears parts of the conversation—good opportunities are lost.

The Not Listenings
The organization that removes its hearing device, or has decided not to buy one in the first place, does not want to participate in the conversation with its customers.  It would rather yell at a customer and hope a few want what it’s selling than open up a conversation with the customer about needs, values, and expectations.  Who likes to be yelled at all the time?  Not me, and I’ll bet not you.  Aside from great products and exceptional service, all customers want is to be heard.

Social media tools help level the playing field for organizations that are “hearing impaired.”  It’s like having a pair of super-charged, digital hearing aids that help you amplify just those frequencies you need to hear.  This ability to listen, hear and actively engage in conversations 24/7 allow your organization incredible opportunities to learn from your customers, correct your mistakes, and build a loyal following.

Now, turn on those hearing aids and engage in conversation.  You’ll be surprised what you will learn when you start listening again.

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Featured Image Source: Randy Adams from Flickr under Creative Commons license.

David Harkins is a serial entrepreneur with significant experience in branding, strategy, licensing and marketing.

In his spare time, he consults, coaches, speaks, writes, hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below:

Continue Reading