Licensing is the business of buying and selling rights to use intellectual property on consumer goods and services. It can help maintain sales, revenue and brand loyalty. But as a marketing strategy, it is under-used by companies. With consumer spending still low, licensing could help you boost market share and revenue.
1. Look for inspiration. Licensing is all around you—whether it's Peppa Pig on your child's schoolbag, or a V&A print on china. It's when you start thinking about these partnerships you can see the potential for licensing your brand.
2. Don't be afraid to let go. Licensing out your brand to a third party can seem daunting. You feel like you might lose control, or somehow dilute your name. But a good partner with expertise in specific product areas can increase your marketing impact as well bring in new income.
3. Look at different routes. A strong licensing programme doesn't just focus on one product line—you should consider relationships with different licensees. This can enhance your brand and expose it to new customers.
4. Licensing is about corporate brands, too. While most licensing firms look towards the entertainment industries, corporate brands such as Michelin use the industry to enhance touch points with consumers and strengthen visibility.
5. Buy into an established brand. Licensing a powerful brand allows manufacturers to buy into an established consumer franchise (in the widest sense of the word). Joe Jones's rubber kitchen gloves don't carry much instant brand appeal: Jamie Oliver's household gloves do.
6. Maximise shelf space. Persuading retailers to stock your goods is a challenge. Retailers are more likely to pay attention to a strong licensed offering, as they know consumers want to boost ties to a favourite sports team or TV character. Displaying a well-known brand on your products communicates value.
7. Watch out for tat. All too often, licensed products are lumped in with unlicensed merchandise as tat. Most professional licensors and licensees try to produce first-class goods and ensure high quality—after all, their reputation is at stake. Lima has a code of conduct for members covering areas such as ethical manufacturing standards.
8. Think big. The Walt Disney Company is reckoned to be the world's biggest licensor, with consumer goods worth £18bn a year sold by thousands of licensees. Many of these licensees are small, or niche, operators, but they prosper on Disney IP.
9. Boost staff morale. Much of the licensing industry is based on popular entertainment, sports, personalities, TV shows and movies. Wouldn't you and your staff enjoy new product development meetings when the topics for discussion are the relative merits of Thomas the Tank Engine versus Transformers?
10. Gain sales without discounting. Premium pricing is usually a viable option for licensed goods, so price-cutting can be avoided in favour of a value proposition. Royalties usually range from 12 to 15 per cent of sales generated but can vary. Take advice and consider what's right for you.
Kelvyn Gardner is UK managing director of Lima, the licensing industry merchandisers' association.