Are you a Good Licensor? Tips to Maximize your Partnership with Licensees

Julie Brown

March 31, 2020

As a licensor, you have high expectations of your licensees. And you should! You manage a leading brand and business in your category and should require the highest standards of your licensees. In exchange for your leading brand name, you expect licensees to invest in retail relationships, marketing initiatives, expedited commercialization of product, and guaranteed minimum royalties. But are you remembering your role in the success of these programs? Licensing is a relationship-driven business. The most successful programs are partnership driven with licensor and licensee working in coordination.

Below are helpful tips to ensure you’re getting the most out of your licensing partnerships.

Utilize internal resources to support your licensing programs

Assigned resources in Brand Management/Marketing, Product Quality, Legal and Finance departments are crucial to the success of your licensing program. Some licensors chose to dedicate full-time resources to some of these functions, while other choose part-time resources (.25 or .5 FTE’s) in collaboration with a brand licensing agent to manage the programs.  Whichever path you chose, it is important to note that licensees need access to contacts in each functional area. 

Create a fair deal with terms that incentivize and enable the licensee for growth

Squeezing a licensee for additional guaranteed minimum royalties or a higher royalty rate may seem like a logical path toward a more profitable program, but if licensees don’t have enough margin to produce quality products or funds to invest in marketing the products, the partnership won’t last. Licensing is a win-win game, so set licensees up for success by agreeing to fair and reasonable terms so they can invest in your partnership.  In return, you’ll reap the benefit of increased and sustained royalties. 

Communicate and define expectations

Within your licensing contracts and in kick-off meetings, you should define expectations for sales/performance requirements and hurdles for renewals. Licensees should clearly understand your expectations. As previously mentioned, licensing is a relationship-driven business and regular communication with licensees is a key element to the relationship.   At minimum, monthly status calls/touch bases should be your standard operating procedure. 

Create a clearly defined processes

As licensees develop new products, they need a clear understanding of expectations, deliverables and timeline for you to approve a new product.  The most successful licensors have transparent/non-subjective processes to guide licensees through commercialization of their new products.

Be swift in product and marketing approvals

Just as you are, licensees are under tight deadlines. At times, licensees will need urgent turnaround for marketing or product submissions.  Understanding licensee deadlines and working in partnership with them to quickly review and approve submissions ultimately helps both parties. 

Integrate your marketing efforts where possible

Licensees are invested in your licensing partnership because of your brand name recognition and marketing support. It’s often expected that you will collaborate with them to promote their licensed products. Financial arrangements can vary and don’t always fall under the licensor’s responsibility. Find creative ways to execute co-promotional displays, cross promote on social channels, offer cross couponing, and list licensed products on your company website.

View licensees as valued partners

Keep licensees informed of ongoing brand updates, host them/have them host you at annual review meetings and even consider hosting a licensing summit if you have multiple licensees. Reporting to your licensees with up-to-date and relevant brand information and data is incredibly helpful to your licensees and demonstrates your commitment to the partnership. Get in touch with us today if you’re interested in learning more.

IMC Licensing Logo Mark

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    September 25, 2009

  • Beyond Royalty Revenue: Measuring ROI from Licensing

    In recent surveys senior marketing professionals say that accountability for marketing services is more important than ever, and that they…

    Stephen Reily

    September 16, 2009

  • Trends in Inbound Licensing

    In the licensing industry, attention is typically focused on strategies to license a brand “out,” extending a brand into new…

    IMC Licensing

    August 19, 2008

  • The Brand Licensing Professional – Not One Size Fits All

    I cannot count the number of times I have heard companies talk about whether they should hire a “licensing professional”…

    Stephen Reily

    February 19, 2008

  • Licensing Agency Compensation: The Inside Story

    One of the needless mysteries of the licensing industry is the topic of agency compensation.  Although talented professionals neither gain…

    Stephen Reily

    February 19, 2007

  • The Bankruptcy Clause in a Licensing Agreement: Comforting but Useless

    An experienced reader of license agreements would know exactly where to find what I call the “bankruptcy clause” (about three…

    Stephen Reily

    March 1, 2003

  • When Trademark Licensing looks like Franchising: Avoiding Legal Risk

    If anyone doubted that trademark licensing has become an essential part of brand management, the recent Annual Meeting of the International…

    Stephen Reily

    September 8, 2002

  • The Risks a Licensor Poses to a Licensee: How Can They Be Limited?

    Most form license agreements assume that licensees pose greater threats to licensors than the other way around.  Aside from the…

    Stephen Reily

    August 8, 2002

  • Licensing to Preserve Trademark Ownership

    As all IP counsel know, registration of a trademark depends on that trademark’s use.  A trademark cannot be reserved indefinitely…

    Stephen Reily

    July 9, 2002

  • Trademarks Around the Edges

    Many years ago, companies that made a branded consumer product thought they did only one thing: make that product.  Their…

    Stephen Reily

    March 9, 2002

  • Watch What the Licensor Does, Not What it Says

    Hiring the best trademark counsel – and getting them to draft the best possible license agreement – will not alone…

    Stephen Reily

    March 9, 2002

  • How Accountants Will Change the Face of Trademark Licensing

    As the licensing industry frets about whether the biggest event of the year will be the performance of Harry Potter…

    Stephen Reily

    November 9, 2001

  • License Agreements: Partnerships Worth Getting Right

    Whenever you see a licensor and licensee in litigation with each other you should assume that something has gone wrong…

    Stephen Reily

    September 9, 2001

  • How Many People Does it take to Screw in a Trademark Licensing Agreement

    Because so many brand owners fail to appreciate how important licensing can be for their brand, many of those who…

    Stephen Reily

    August 9, 2001

  • Developing Branded Consumer Products like Consumer Products

    Last month I described how companies find themselves distributing or authorizing branded products that either weaken the protection of their…

    Stephen Reily

    July 14, 2001

  • Why Most Companies Have Too Many Licensors

    If you looked to a corporation’s internal licensing department for evidence of trademark usage and enforcement, as well as development…

    Stephen Reily

    May 20, 2001

  • Licensing Corporate Brands and Trademarks: Knowing What it Should Cost

    As someone who runs a licensing agency for the owners of brands and trademarks, I can be expected to argue…

    Stephen Reily

    February 19, 2001

Services

Licensing is a relationship not merely between brands, but among people. At IMC, we build and nurture both of those relationships while delivering top-notch customer care that treats — and protects — your brand as if it were our own.

About Us

We’re committed to fostering dynamic brand alliances. Often those alliances are born from one brand’s need and another’s ability to meet that need. The IMC team are experts at recognizing and creating those opportunities, but our real expertise is people. Standing side by side, as consultants, partners, peers, and as friends, we’re driven by a singular purpose: creating a smart idea.