From December 2012 BottomLine, Licensing Industry Publication One of the biggest challenges for licensors is to keep the opportunity pipeline full. Regardless of the size of the licensing program, finding and qualifying prospective licensees can be a challenge. Some licensors need more opportunities to explore, while other licensors have the opportunities but don’t have an effective qualification process. This article explores how to identify and qualify new opportunities.

1. Licensing Clinic UPCOMING EVENTS
Hong Kong International Licensing Show
How to find and qualify new licensing opportunities 1/7-9
Hong Kong Convention & Exhibition Centre - Wanchai HK
www.hktdc.com/hklicensingshow
By David Harkins
Associate Director, Retail Business Development LIMA China Networking Cocktail Reception
Boy Scouts of America 1/7
Hong Kong Convention & Exhibition Centre
One of the biggest challenges for licen- prospects. www.licensing.org/events/view/971/
sors is to keep the opportunity pipeline full. With these assumptions in mind, you can
Regardless of the size of the licensing pro- begin developing or refining the process to
gram, finding and qualifying prospective li- grow your licensing program. International Consumer Electronics Show (CES)
censees can be a challenge. Some licensors 1/8-11
need more opportunities to explore, while Finding prospective licensees
other licensors have the opportunities but Prospective licensees fall into two Las Vegas Convention Center - Las Vegas, NV
don’t have an effective qualification pro- camps: Those who know and see value in www.cesweb.org
cess. your brand, and those who don’t. It’s likely
Unfortunately, some licensors have both the former are already knocking at the door Sports Licensing and Tailgate Show
challenges. To overcome them, a licensor to pitch new ideas, but it’s the latter that 1/17-19
might consider the following sales and pose the biggest challenge for most licen-
business development techniques. sors.
Las Vegas Convention Center - Las Vegas, NV
The best way to identify possible new op- http://showproco.com
Key assumptions portunities is through Environmental Scan-
Let’s start with three key assumptions: ning—essentially careful monitoring of New York International Gift Fair
• You have a strategy for each of your the marketplace—for new licensing deals 1/26-30
licensed properties; in your target product categories. You can
• You’ve identified the product cat- also identify potential opportunities by not-
Jacob K. Javits Convention Center and Passenger Ship
egories that align to your core brand ing specific changes at companies within Terminal Piers - New York, NY
message and best support your li- those target categories, which might in- www.nyigf.com
censing growth goals; and clude:
• You have a realistic understanding of • Changes in licensing, marketing, or
the value of your brand and licensed other senior leaders; International Toy Fair Nuremberg
properties. • A shift in organizational strategy, 1/30-2/4
While having a defined strategy for each new product line development or Nuremberg Exhibition Center - Nuremberg, Germany
licensed property and knowing the catego- line extensions; or www.toyfair.de
ries which each property fits best is a great • Expanding markets—either demo-
starting point, you also need to have a real- graphic or geographic.
istic expectation of your licensed property’s Great sources of such information for Spring Fair International
value to a prospective licensee. Environmental Scanning purposes include 2/3-2/7
For example, you may have a top brand LIMA, licensing trade publications and
in one category, but your brand might not other marketing and business publications. NEC Birmingham - Birmingham UK
bring significant or even incremental value It’s important to note that Environmental www.springfair.com
to the market leader in another category Scanning typically provides advance indica-
that you’re targeting; therefore, your brand tors of possible opportunities, not those op- Toy Fair 2013
probably has less value for that category portunities that already are clearly defined.
leader than it would for the number two You’ll have to work a little to determine if 2/10-13
or number three player. This will be a key an opportunity does indeed exist and how Jacob K. Javits Convention Center, New York, NY
factor in targeting and qualifying licensing Please turn to page 7 www.toyassociation.org
www.licensing.org
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2. Licensing Clinic CONTINUED FROM PAGE6
you might leverage your licensed properties place, the market need for the product, the
into the mix. strength of the product development and
When a prospect is identified, it’s impor- launch plan, and the company’s commit-
tant to create an ongoing marketing and ment to market the licensed product.
sales program to keep connected. Like any These review steps are somewhat sub-
type of marketing program, a prospective jective, yet an experienced licensor will
licensee needs regular communication to quickly spot those proposals that are likely
keep your brand top-of-mind for the time to fall short of expected performance if a
when the opportunity does present itself, deal is completed.
and the licensor’s sales and business devel- A prospective licensee who scores well
opment team steps forward to qualify and in all of these review categories is clearly a
close the opportunity. catch. Those who don’t may still be a good
match for a licensor; it depends on the tol-
Qualifying new opportunities erance level for imperfect feedback in one
Regardless of the source, once you’ve or more of the review categories.
identified what you believe to be a good
prospective licensee, it’s important to have
Some licensors develop a rubric or score-
card for evaluating prospective licensees,
“Keep in mind the best oppor-
objective criteria in place to help you evalu-
ate fit with your brand. The majority of pro-
and their tolerance for variances in the
review categories is built into the scoring tunities for a licensor are not
spective licensees will look good on the process. This approach also helps to make
surface and will be reputable, but a deeper the review process a little more objective. those that are readily apparent;
dive will give you a clearer picture of how The biggest challenge in finding and qual-
well the company, its products, and its busi-
ness practices align with the values and ex-
ifying new licensing opportunities has more
to do with the lack of structured, formalized
greater success in growing
pectations of your company.
The first step in collecting the informa-
processes for achieving these goals.
Keep in mind the best opportunities for a
licensing opportunities comes
tion you need to further qualify a prospec-
tive licensee is via a licensing application.
licensor are not those that are readily ap-
parent; greater success in growing licens- not from ‘what is,’ but from
The qualification process should include a ing opportunities comes not from “what is,”
review of objective matters such as: but from “what can be.” A defined process ‘what can be.’”
• the applicant’s financial solvency, for identifying and qualifying opportunities
possible legal issues (including prod- will help you find “what can be” much more
uct recalls, infringements, social- quickly.
and/or labor-related matters);
• experience in developing and David Harkins is Associate Director,
launching similar products in the Retail Business Development for the Boy
marketplace; Scouts of America (BSA) National Coun-
• experience working with other licen- cil. In addition to overseeing the licensing
sors: and program, his latest projects include appli-
• reputation in their distribution chan- cations of mobile technologies in customer-
nels for meeting demand. focused retail and electronic publishing.
A licensor may need advice from finance
or legal experts for some areas of review.
LIMA Wishes Everyone a
Does the market need this?
The market need or opportunity for the Joyous Holiday Season,
proposed licensed products is obviously and a Happy and Healthy
critical in the licensor’s decision process. A
licensor should also evaluate the prospec- New Year
tive licensee’s understanding of the market-
www.licensing.org
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