Word of mouth is an interesting phenomenon. Although the internet is a close second, there's no substitute for a friend's recommendation that a certain school offers excellent tuition or any other supplier for that matter. Similarly, the brand licensing industry depends on word of mouth to underwrite the reputation of licensees and licensors.
Once a licensee has a bad name - for not paying royalties, for example - word spreads quickly from the licensor via agents through to the agent's contacts. Obviously licensing newbies don't know who to ask for a referral but once you're in the know you become a stakeholder in the reputation network and, as long as your own reputation stands up, your opinion can make or break a deal. Such is the responsibility of being a brand licensing consultant...
Wednesday, February 23, 2005
Thursday, February 17, 2005
Money for nothing....
Because many agencies only charge fees as a percentage share of royalty generated, it is tempting for brandowners to use licensing consultancies as a cheap way to investigate licensing opportunities. As Kirk Martensen points out in his paper on Licensing Dyslexia, there are many other factors to be taken into account when measuring a licensing strategy, and the worst licensing deals achieve high profile, huge royalties but bad fit with the brand's values. See paper on this....
The agency's goals must be aligned with brand fit as well as revenue generation to avoid the motivation to adopt a short-term mentality on both sides. Licensing agencies/consultancies need to think long-term to achieve brand fit ie: planning a brand licensing strategy, researching target markets, talking to key players and gathering and co-ordinating the flow of information between the brandowner and targeted licensees.
An initial investment from the brandowner shows commitment to a long-term licensing strategy, aligning the agency with the brand, and recognises the value of the agency's initial costs and strategic input. That's my argument and I'm sticking to it!
The agency's goals must be aligned with brand fit as well as revenue generation to avoid the motivation to adopt a short-term mentality on both sides. Licensing agencies/consultancies need to think long-term to achieve brand fit ie: planning a brand licensing strategy, researching target markets, talking to key players and gathering and co-ordinating the flow of information between the brandowner and targeted licensees.
An initial investment from the brandowner shows commitment to a long-term licensing strategy, aligning the agency with the brand, and recognises the value of the agency's initial costs and strategic input. That's my argument and I'm sticking to it!
Wednesday, February 16, 2005
Sudden Delays
It always surprises me when a conversation goes suddenly quiet. For example, I've recently been in the thick of negotiations on a potential deal when suddenly there was a deafening silence from the other side. It turns out my correspondent had booked two weeks holiday. Can you imagine if domestic life mirrored the business world:
“Honey, would you put the rubbish out?”
(Silence for two weeks)
“Honey where were you?”
“Oh, I went away for two weeks. Shall I put the rubbish out?”
“Honey, would you put the rubbish out?”
(Silence for two weeks)
“Honey where were you?”
“Oh, I went away for two weeks. Shall I put the rubbish out?”
Monday, February 14, 2005
On Valentine's Day make a match...
The interesting thing about being in the middle between brand owners and manufacturers is trying to find brands and licensees with matching promiscuity.... I suppose in some weird way that makes me a dating consultant?
The reason that few companies have a brand licensing strategy is that once the wrong licensing mentality has taken hold of a brand, it can lead to a slow death. Big fashion brands like Paco Rabanne and Yves Sant Laurent used to be the worst offenders (I remember an Yves Sant Laurent that was so poorly made it actually burnt my nipples). Like a lot of previously over-licensed brands, YSL’s owners are now attempting to reinvigorate the brand by killing off licenses and restablishing a high quality mentality. One thing’s for sure, at some point in the process the company stopped looking at licensing as anything other than the chance to make a quick buck. The reality is that licensing requires as stringent a new product development process as any other brand extension.
Licensees are no better! A typical new product development process is to identify a gap in market or some new technology that gives a competitive advantage, design a suitable product, market research the product, develop a marketing plan, market research the marketing plan and then execute a sales & marketing strategy. The majority of licensees circumvent this process by sourcing a product, looking at brands they'd like to license, attempting to license in a brand and, if this attempt is successful, adding the new brand to their existing product and relying on the product’s new design to convince retail buyers and consumers that there is a market opportunity.
The difficult role of the dating consultant is to convince both sides to make the necessary effort to make the other party feel valued. Given that we're paid on results it's tempting to advise our clients to take on every deal possible, however, the only way to gain credibility is to be honest. We've all seen what happens when a licensee just slaps a logo on something- it's no fun and the money's no good - so my advice, for what it's worth, is stay chaste and keep waiting for Mr Right, even if I get nothing for saying this (at least I don't have to be the one chasing down the bad date who abused my client and didn't even pay for the privilege). Choosing the wrong partner leads to tears before bed-time.
The reason that few companies have a brand licensing strategy is that once the wrong licensing mentality has taken hold of a brand, it can lead to a slow death. Big fashion brands like Paco Rabanne and Yves Sant Laurent used to be the worst offenders (I remember an Yves Sant Laurent that was so poorly made it actually burnt my nipples). Like a lot of previously over-licensed brands, YSL’s owners are now attempting to reinvigorate the brand by killing off licenses and restablishing a high quality mentality. One thing’s for sure, at some point in the process the company stopped looking at licensing as anything other than the chance to make a quick buck. The reality is that licensing requires as stringent a new product development process as any other brand extension.
Licensees are no better! A typical new product development process is to identify a gap in market or some new technology that gives a competitive advantage, design a suitable product, market research the product, develop a marketing plan, market research the marketing plan and then execute a sales & marketing strategy. The majority of licensees circumvent this process by sourcing a product, looking at brands they'd like to license, attempting to license in a brand and, if this attempt is successful, adding the new brand to their existing product and relying on the product’s new design to convince retail buyers and consumers that there is a market opportunity.
The difficult role of the dating consultant is to convince both sides to make the necessary effort to make the other party feel valued. Given that we're paid on results it's tempting to advise our clients to take on every deal possible, however, the only way to gain credibility is to be honest. We've all seen what happens when a licensee just slaps a logo on something- it's no fun and the money's no good - so my advice, for what it's worth, is stay chaste and keep waiting for Mr Right, even if I get nothing for saying this (at least I don't have to be the one chasing down the bad date who abused my client and didn't even pay for the privilege). Choosing the wrong partner leads to tears before bed-time.
Hello and welcome
Hi there,
welcome to my attempt to chronicle the growing pains of a new business. Well, when I say new I mean 2 years old, but it still feels new to me. This blog is intended to be a collection of thoughts and ideas about branding, brand licensing and what it means to be a brand licensing consultant. I hope that you find it interesting and stimulating. Personally I look forward to consulting this blog in about 3 years time and laughing my socks off at the naiivety it contains and regretting not actioning the things that turn out, with hindsight, to have been just the thing to do. Anyway, enough pre-amble and on with the blog...
welcome to my attempt to chronicle the growing pains of a new business. Well, when I say new I mean 2 years old, but it still feels new to me. This blog is intended to be a collection of thoughts and ideas about branding, brand licensing and what it means to be a brand licensing consultant. I hope that you find it interesting and stimulating. Personally I look forward to consulting this blog in about 3 years time and laughing my socks off at the naiivety it contains and regretting not actioning the things that turn out, with hindsight, to have been just the thing to do. Anyway, enough pre-amble and on with the blog...
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