Growing your business is an ongoing process. To grow and prosper, your business must acquire new customers and retain existing customers. Brand licensing is one strategy that can help you achieve these objectives. If you have an established business and are looking for ways to reach more customers and make more sales, brand licensing may be your next step.
What Is Brand Licensing?
Brand licensing is an agreement between your company and a third-party licensee that allows the licensee to produce products with your trademark in exchange for a royalty fee. Through your licensing agreement, you can control what products are produced with your trademark and how long the licensee may continue using your brand. Many people associate brand licensing with the entertainment industry, but it can be a powerful tool for business growth in many other sectors.
Why License Your Brand?
With brand licensing, you can expand your brand to include products that your customers want but your company can not produce by itself. For example, if your company manufactures power tools, customers who already use and trust your products might be eager to purchase work clothes, gloves, or home appliances bearing your brand name. Your company likely does not have the means to manufacture these products; this is where the licensee comes in. By letting the licensee handle the production, you can explore new product markets with minimal financial investment.
Brand licensing promotes business growth by offering new products to your existing customers, but it also helps you reach new customers. Licensed products can reach people outside of your original target market, increasing your visibility and name recognition. Licensing also allows you to offer products at a variety of price points, which can be a useful business growth strategy for higher-end brands.
How Should You Approach Brand Licensing?
Brand licensing must be approached thoughtfully. While the goal is to expand your reach into new markets, it’s important to maintain the integrity of your brand while doing so. The products you choose should complement your current product lines and reflect your company’s identity, and the licensees you work with must be able to meet your company’s standards and uphold your hard-earned reputation. Remember that a licensed product might be a new customer’s first experience with your brand, so it needs to be a positive one.
When it comes to business growth, there are many different strategies. If you want to grow your customer base and offer new products while maintaining the image you have worked hard to build, brand licensing can provide new opportunities for your company.