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Licensology: Securing an A+ License

Jan 1, 06

Looking for growth? Looking for that sustainable competitive edge? Securing that A+ brand has proven to be the answer for many companies.

Prepare yourself with research Relationship build with the potential partner Expectations need to be managed Professional presentations should be well written and contain all the relevant information Patience is a virtue and a requirement

Whether it was Gund landing Disney's Pooh brand. Marchon eyewear signing the Calvin Klein brand. or Electronic Arts scoring the NFL brand, licensing the A+ brand can be a guaranteed path to sales growth and sustainable profits.

I have developed a calculated approach termed "PREPP" to help you prepare for the pursuit of an A+ brand for your company. You DO have a shot at securing this A+ brand. Do not be intimidated by the large size of tile potential partner. Many are that size because of hardworking, trusted licensing partners like you.

The licensing deal-making process was much more casual and subjective when I was managing licensing for Yves Saint Laurent in 1991. Today's business is more sophisticated and objective, relying upon the proposal and the presentation. My client deals. as a licensing consultant. benefit from my PREPP approach.

Prepare yourself with research. My firm recently purchased scan data from NPD to show real market share numbers and illustrate exactly where the market opportunity is for the potential branded product. Some other items you need to research include: overall brand research (Q-score for some brands); the list of current licensees: the current retail programs; and overall success in the marketplace.

Relationship build with the potential partner. This will never be entirely supplanted by today's objective approach. I recently presented a client proposal to Todd Oldham Studios. and Todd required that he and his team personally meet with the potentiall licensee's team before Todd's executives would comment on the proposal.

Expectations need to be managed, including creating a realistic sales estimate. One of my clients was compelled to pitch the NFL. with a seven-figure guarantee to seem "worthy." However, after a thorough sales projection showed realistic projections by retail account, he secured a license with only a five-figure guarantee. Expectations also refer to managing your boss' expectations for sales and profits.

Professional presentations should be well written and include your company information, management team bios, operations capabilities, licensing plan. product concepts, marketing programs, retail distribution plans, and timelines. Professional presentations also illustrate your ability to meet the licensor's many future demands for detailed reports on royalties and retail accounts.

Patience Is a virtue and a requirement, as licensors operate on their strategy's schedule: Your category may not be part of their plan for months. One of my clients approached a top brand only to be politely told, "Call me In a year when we'll be ready for that category: A year later, the company was happy to receive the proposal and negotiate a deal.

Lastly. if you have a team to execute this PREPP approach. then great. However, you may consider hiring a licensing consultant. A consultant can accelerate the process by providing quick access to licensors. efficient guidance when developing the proposal, and expert advice when negotiating the deal.