Episode 113: A Case For Licensing: The Fastest Way To Increase Your Reach, With Roland Frasier

Roland Frasier, Business Lunch Podcast, Business Strategy, Licensing, Business Growth

Are You “Sniffing The Neck”?

Roland gives us valuable content every Monday on how to achieve massive business growth. This episode is no different, with Roland sharing a Donna Karen story, shared with him by Bernt Ullman, who we had on the show earlier this year (episode 88).

As you think about growing your business, one of the fastest ways to increase your reach and your product line is to enter into licensing relationships with other businesses that have already been where you want to go in their market. Roland shares with us some great examples as well as the scenarios in which Licensing makes the most sense.

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Listen Today For

  • The Donna Karan success of almost an 8-fold increase in profits over the course of two years, largely as a result of licensing.

“You don’t have to be a huge world-renowned brand like Donna Karen to take advantage of licensing”. Roland Frasier

The Three Scenarios In Which Licensing Your Name or Brand Works best:

1. You have created a business with high brand equity and a loyal base of customers like Donna Karen did.

Here, you have a core-product and/or market, and you take the brand equity that you have created and leverage it by allowing third parties to use your brand to market the thing they are good at (like DK did with fragrances), to a market they have already developed (like Estee Lauder’s retail perfume store relationships).

2. If you are a personality or influencer with a large number of fans or followers.

This is basically the same as number 1 above, except it applies more to you as a personality as opposed to a personality-independent brand that you have developed.

3. If you have invented something but don’t already have a customer base or distribution channel to sell into. You could spend years and millions to acquire customers and master distribution, or you could just tap into someone else’s customers and sales channels.

“If you’re a small company with a great product, frequently, your best option is to go to a larger company that already has resources and distribution to get your product to market faster, or to help it reach larger markets”. Roland Frasier

Examples of Licensing Strategy And Success

  “Shark Tank.” The Sharks have relationships with (or just know about) companies that specialize in the distribution of products through their existing channels.

All the sharks have to do is take the new product to one of those companies and, boom, they have virtually instantaneous sales and profits.

Daymond John: This is exactly what Daymond John did when he worked with us to market and sell the “Spy Escape” product that he invested in on one of the Shark Tank shows. We had a huge audience of people who would be perfect buyers for the product. So, Daymond made a deal with us to market and sell the product to our existing customer base through our existing distribution channels (our website, email list and social media channels).

• Kylie Jenner: Another perfect example of someone who started out creating a social audience, then lent her name to other brands to create clothing lines and ultimately partnered with a world-class cosmetics manufacturer, Seed Beauty, to co-create products.

• Authors: While most of what we’ve talked about so far apply to physical products, you can also license your intellectual property, like courses you create, or stories or songs you write. Many well-known (and not so well-known) authors do this. They create a book or a course or a podcast or social media channel and then license their name or content or course to other people who have customer and distribution channels to market and sell it.

We see this quite a bit even in our own business where we license our content to other businesses that want digital marketing educational materials for their audiences. They pay us for the use of our content and then we benefit from royalty payments while they and their audiences benefit from having access to our training materials. It makes sense for us to do this because by doing it we receive brand exposure to huge audiences that we haven’t yet touched or that would be very expensive to build or acquire.

“Remember, licensing is all profit. Everything you receive from licensing royalties is falling to your bottom line.” – Roland Frasier

Consider This,

If you were to enter and develop a $10 million market yourself and operate at an 8% profit margin, that would generate an additional $800,000 in profit for you. But, if instead, you licensed your name or product or IP to someone else who had that market, you would save all the time and investment and risk of building that market yourself, and at a 10% license fee, you would actually make $200,000 more in profit!

“Licensing is one of the most proven and most profitable ways to expand your business. It’s definitely something to consider.  Roland Frasier

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