Should You Add Brand Licensing To Your Marketing Mix?

posted in news on 3/28/17

If you’re like most chief marketing officers, you know the value of promoting your brand. Social media, public relations, advertising — you know the drill. What you might not know is the value of diversifying your brand.

What does that mean? Is this just another one of those corporate buzzwords that have become a cliché? It’s not, I promise. Put simply, diversifying your brand means creating new ways for customers to find and buy your stuff — and thus for you to make more money.

Indeed, as any “finance 101” guide will tell you, it behooves you to diversify your assets. And what’s true for an investor is especially true for a businessman: Name virtually any Fortune 500 company, look at its quarterly earnings reports, and you’ll see multiple streams of income.

What about your company? Are you diversified or do you rely on one big cash cow alongside a collection of calves? Does that bullet point on your wish list to develop another blockbuster product never get crossed off? Do your management meetings always return to a Socratic dialogue about maximizing profits?

 Faced with these questions, many CMOs fall back on a conventional answer: Let’s contract with a communications agency. We’ll hire consultants to promote our blog posts, land our CEO quotes in the media, and secure product placements in movies.

There’s one just problem: This is what all your competitors are doing. In this age of information overload where every marketing penny needs to deliver an ROI dollar, the savvy CMO needs to think unconventionally — and one way to diversify his brand is by licensing it to certain trusted partners. (Think power tools from Ford, where the car company lends its name to power washers and generators, expanding its customer base from car buyers to car tinkerers. Or sweets from Baileys, where the alcoholic beverage is infused into delicious Häagen-Dazs ice cream.)

 So, let me introduce you to the world of licensing, a world that I’m familiar with as the owner of an agency that helps companies – including Ford and Baileys – license their brands. Here are the top three reasons you could be missing opportunities if you’re not licensing your brand.


When you a hire a conventional agency, you operate on conventional terms: Money goes from your bank account to theirs. With most agencies, a significant chunk of your income goes to vendors — content strategists, social media gurus, creative directors, editorial directors, and a half-dozen others.

But when you hire a licensing agency, the terms get inverted: The agency now pays you. For example, if you’ve ever spent money on advertising, you’ve bumped into the implacable reality of this field: Half your ads work, half don’t. The catch is to determine which is which. (To be sure, digital ads are more transparent, but, still, you can’t connect directly with your customers.)

By contrast with licensing, the lion’s share of labor — everything from strategy to execution — falls to the agency. As a result, you can be as involved or as hands-off as you want. And either way, new customers will now enjoy your products — using them, wearing them, maybe even eating them.


Your competitors gain customers the usual ways: through multimillion-dollar marketing campaigns, and/or massive R&D budgets in hopes of uncorking the next big thing. Of course, this road is expensive and time-consuming. And even if you and your consultants think the results are riveting, there’s no guarantee they’ll make a dent in your bottom line.

By contrast, partnering with a licensee shifts the risk from you to them. You’ve already done the hard work — developing the original products, building your reputation, nourishing customer loyalty. That’s where most companies stop.

But the savvy CMO knows that success isn’t an endpoint, rather it’s an ongoing process. He knows that now’s the time to elevate your efforts for your brand to conquer new territory. Licensing can propel you here.


Think about the process you endure to launch a new product: Market research. Product research. Focus groups. Strategy meetings. Budget meetings. Product testing. By the time you’re ready, your teenage customers have become parents. Now consider what happens when you team up with a licensee. Research is outsourced. Marathon meetings become status updates. You can finally spend time — the most precious resource of all — on what you do best.

 To be sure, licensing isn’t for everyone. Put simply, some brands aren’t ready for this. Agencies have turned down licensing for brands for many reasons, whether that is because a brand stands for something singular in customers’ minds, whether that allure cannot translate seamlessly to other industries, or whether its existing customers are not loyal enough to follow it there.

What’s more, let me add that licensing isn’t a panacea. It won’t make it rain overnight. A licensed product still needs to be marketed, still needs a distribution network, and still needs a sales force. And you need to find the right partner for your brand, too. (When trying to find an agency, there are the usual considerations, like how long have they been in business for and are there any competitive clients, but the one I feel is the most important is: Are they as passionate about your brand as you are?) But in the hands of seasoned counselors who specialize in this industry, these problems don’t all come crashing down on your shoulders — you can choose which to delegate and which to own.

So the next time your communications contract is up for renewal, consider broadening your horizons. While everyone else is playing checkers, you can take up chess — and turn your brand into an empire.