By: Ted Curtin, CMO, LMCA
(Originally Published in Total Brand Licensing Autumn 19)
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You’ve seen it before. Similar brands, licensing into the same places, with also-ran products that neither move the needle from a business perspective nor excite the consumer enough to truly build brand equity and customer loyalty. Is there revenue to be made? Yes, in the short run. Is there a risk of brand erosion? Absolutely.
Licensing is an incredibly powerful business tool, capable of generating significant new revenue streams, reaching new audiences, accessing new distribution channels, strengthening your core businesses’ competitive positioning and increasing brand equity. But like any other tool, in business or elsewhere, these tools need to be kept sharp and tuned.
How can you think outside of the box and still stay true to protecting and enhancing brand equity?
Innovation is one of an organization’s most important competitive strengths. It’s an organization’s ability to anticipate and identify new opportunities, adapt to changing conditions and respond to change quickly. The pace of innovation today is relentless and with competitive threats, emerging technological trends and changing consumer preferences, the cost of not innovating can be devastating for a company. The same holds true for company’s licensing initiatives.
The fact is, innovation from within is a challenge that even the most creative companies wrestle with. Yet companies that fail to innovate and stay ahead of market trends and competitive threats, risk significant loss of brand equity or worse, disruption that threatens their long-term stability or the long-term stability of their licensing program.
Innovation – when done right – can help you find creative solutions and extensions for your brand that add long-term value to your licensing program and your company’s bottom line. Here are some ways to identify innovative brand extension opportunities for your brand:
1. Look Left and Right!
Too many organizations wind up with siloed licensing functions. Often, companies are sitting on top of great brand extension opportunities but don’t know where to look. Consider creating cross-functional teams from all corners of your organization – especially people with access to the front lines, where your customers directly and indirectly encounter the various touch points of your brand. Here is where you get a street-level view of your brand, the competitive landscape and gaps in the market that could be a perfect complement to your brand.
2. Talk to your customers.
It’s often said that your brand is nothing more than what your customers say it is. It’s not your logo, it’s not what you or your advertisements say about your brand or your products. Your brand is defined by your customers expectations and experiences – for better or worse. And it’s your customers who will decide whether or not your brand is allowed to extend into product “X” or category “y”. The problem with this approach is the notion that customers don’t know what they want until you present them with the offering. You’ve heard the quote (factual or not) that when Henry Ford asked people what they wanted, they unanimously said, “faster horses.” We also know that no-one asked for the iPhone before it was introduced. As such, the prospect of discovering truly innovative licensing simply by polling your customers could be limiting.
3. Look outside the box for new target products and categories.
External innovation adds a level of reach and depth that provides fresh, unencumbered outside thinking to truly understand your brand’s potential. External innovation can take many forms and come from a variety of sources. The success of any external innovation initiative will rest upon the caliber of ideas you can tap into as well as the ability to mine the data for the rich insights that will lead to long-term licensing successes.
Whether companies utilize the expertise of outside resources or look internally to develop their strategy around brand licensing, an innovative approach and strategic focus is critical when considering which products and categories opportunities are right for your brand. It is vital to make sure that the licensing opportunities you pursue addresses the needs of the consumer and the equity of your brand. Done right, developing a innovative approach to your licensing initiative will not just drive new revenue opportunities through royalties but also create incremental pull for your brand’s core products and services.