Council Post: The Most Important Attributes For Choosing A Brand License Partner

President of global licensing industry trade association Licensing International, 20 years’ experience at Sesame Street, MTV and others.

Long considered one of the fastest and most profitable ways to grow a business, brand licensing has become even more appealing now that so many industries are reeling from unforeseen hits to their bottom lines due to the pandemic. While some business leaders are lying low to weather the storm, others are actively looking for opportunities to make up lost revenue, including strategic brand licensing programs.

Brand licensing might not be the first business strategy that comes to mind in an economic downturn, but it’s one of the savviest. When done well, brand licensing deals can create a new revenue stream with very little risk and minimal investment. They can effectively extend a brand into new markets and categories, as well as to new audiences. 

But before signing a licensing deal, it’s important to understand what makes a brand appealing to companies or manufacturers (the licensee) looking to launch a licensing program. In other words, what value does the brand bring to an outside product or service?

What follows are the four most important brand attributes for choosing a brand license partner. (Full disclosure: Peanuts and FAO Schwarz are members of our organization, and Peeps, Harley Davidson and Scotts Miracle-Gro are represented by licensing agencies that are members of our organization.)

Brand Heritage

Even the most popular brands can have a limited shelf life. The more important measurement of brand strength is its sustained relevance over time. Heritage brands come with built-in equity. That’s why they are particularly appealing to licensees looking to sign a licensing deal. Potential buyers already know what the brand stands for, and licensees can rely on that to bring long-term value to the product or service to which it’s applied.

A good example of this is the Peanuts brand: It’s a classic comic strip that has become so much more impactful since its inception. It’s universally beloved across the world due to its endearing and relatable characters, which has made it a desirable license in more than 100 countries. You can find Peanuts in fashion, experiential entertainment, art, education and more, all because the brand prioritizes on-trend collaborations and relevant projects. 

High Emotional Currency

One of the most powerful drivers-to-purchase is a consumer’s emotional connection to a brand. Highly emotive brands are able to tap into a buyer’s psyche, causing them to think not only with their heads but also with their hearts. Usually, brands do this through intuitive storytelling that goes far beyond product benefits. Brands with strong emotional pull develop fiercely loyal followings, often resulting in brand advocacy.

Take Harley-Davidson as an example: The brand markets itself as more than a motorcycle; it taps into the emotion of the lifestyle it sells to its customers, which in turn creates consumers who actively advocate for the brand.

World-renowned toy brand FAO Schwarz is another example of a brand with strong emotional ties. Around for more than 150 years, the retailer pioneered experiential marketing with its over-the-top displays and in-store activations. It’s long been known as more than a store; it’s a shopping destination. Because of the fun and wondrous experience it offers, particularly at the New York City flagship store, mention of FAO Schwarz can flood children with happiness and adults with nostalgia, instantly transporting them back to their own childhoods.

It’s no wonder that companies or manufacturers interested in licensing a brand look for one with high emotional currency.

Relevance

It might go without saying, but the most powerful brands are one of two things: timeless, which of course many heritage brands are, or timely, which speaks to brands that see great success around specific moments in time, like holidays. What it comes down to is relevancy: Does the brand fit into consumers’ lives in a meaningful way?

For example, Peeps has been gracing Easter baskets for almost 70 years, becoming a quintessential part of the spring season. While best known for its marshmallow treats, Peeps has made strides into a multitude of other categories beyond confections in recent years. Licensing deals have taken it into branded plush toys, home scents and greeting cards, according to Adweek (registration required).

A brand’s ownership over a season (like Peeps’ over Easter) provides it with built-in timeliness, and therefore relevance with each passing year. This is what makes a brand a desirable license for seasonal sales.

Unique Value Proposition

A brand’s unique value proposition is what makes consumers choose it over other competitors in the space. Most importantly, the value proposition highlights the problem that the brand solves for the consumer. This becomes important in brand licensing because licensees want to capitalize on the high level of trust that brands with powerful value propositions have built with their customers; it’s what directly translates to those same customers purchasing a licensed item based on the merit of the brand.

Scotts Miracle-Gro brand is an example: It built its core business on the foundation of products that solve consumers’ lawn and garden problems. Because it gained consumer trust over the years, the brand developed a loyal customer base willing to follow it into new, related categories. Scotts Miracle-Gro now licenses its brand to manufacturers of power tools and garden accessories.

Perhaps the most important factor for a licensee to consider, however, is not a brand attribute, but rather the overall business rationale of the licensing deal. Even if the brand license being considered meets all the above criteria, it must first and foremost align with the revenue and company objectives. Otherwise, the deal puts the licensee at risk. If all makes sense from a business perspective, move on to vetting potential licensing partners with the aforementioned brand attributes in mind. It can be the difference between a successful partnership and one that falls flat.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?