How To Win Toy Licenses – 5 Proven Tactics...
Licensing plays a major role in the Toy market. Whether it’s Toy companies licensing (mostly) Entertainment properties, or Toy Brand owners licensing out other categories on the Brands they own, there is no doubt that having hot licenses makes Toy (and Games) companies more attractive to retailers.
Moreover, it’s a proven fact that consumers will buy into products based on strong licenses. (This is especially the case in the North American Toy market, UK Toy market, Southern European Toy markets, and Australian Toy markets. Less the case in Germany, but anyway…!).
So Licensing products can really reduce our risk/chances of success on new product launches – as long as we manage our MG commitments prudently.
Which is all well and good, but one of the questions I get most often in my Consulting business is ‘How do we win the really big licenses?’
So to answer that question, here are 5 tried and tested tactics to secure hot Toy licenses:
1. Show passion for the Brand – some of the more cynical of you reading this may feel tempted to roll your eyes at this point, as it’s often perceived that all Licensors care about is the size of the M.G. However, if you bear in mind the investment that has driven the Brand that you want to license, both financial investment and emotional in many cases, it becomes likely that when faced with two equal pitches, a licensor is likely to be swayed by someone who truly believes in their Brand. Unless you are a tremendous actor, it’s hard to fake this kind of passion, so if you don’t have it for a particular Brand, is there anyone else on your team who does? If so, why not let them lead the pitch?
2. Don’t just talk product, talk grand vision – in the end, you have to develop some products, sell them and hope they sell through. Which is very straightforward and mundane really, and it’s also what most other companies pitching for the rights will be focused on. However, if you can create a vision beyond just cranking out a few more products, and get the licensor really enthused about your plans for the Brand, and the potential of your vision, then you instantly get a leg up in the pecking order.
3. Snipe behind the master Toy license – there are a number of companies who follow this model religiously and have significant success with it. In essence, if you wait for a Master Toy licensee to sign up, they will tend to commit a significant M.G., a weighty development slate and of course often agree to a marketing commitment. For smaller companies whose model is not to go down the master licensee path, picking off what’s left can be lucrative for the following reasons:
a). The licensor’s M.G. expectations from the Toy category have often been largely met by the master licensee.
b). There is a strong opportunity to piggy back the massive sales drive the master licensee will put behind the Brand at retail.
c). There is a strong opportunity to piggy back the often weighty marketing spend the master licensee puts behind the Brand.
4. Multiple stakeholder pitches – anyone who has ever pitched for a license has experienced the disappointment of convincing the commercial department within a Licensor’s company, only to fall foul of either a creative veto, a finance department veto or some other internal stakeholder. So why not make sure that any likely objectors are included in the pitch process…because it is so much easier to convince someone face to face than at arms length via the chinese whispers of indirect contact. This is really effective in my experience. Of the 200 or so licenses I’ve negotiated, I would say that this tactic has been the most effective. The reason being that there is always a reason why something might not work, or why someone might not like the concept that accompanies your pitch, but the closer you can get to any objectors, and the easier you can make it for your direct contact to sell the deal internally, the more easily you can address any concerns or stumbling blocks and address them!
5. Whose idea is it really – when dealing with creative issues on a licensed product or range, always try to tease and lead the most important creative stakeholder to your preferred conclusion, in such a way as to make them articulate why that path is the right path. Because we all want to be consistent with the positions we’ve previously taken, so your chances of being the preferred partner, and having the preferred concept will go up massively if key stakeholders express a preference in your favour, based on a thought process they believe is theirs. This is not being sneaky, it’s just genuine persuasion.
Obviously there are many more steps to successfully win top toy licenses, but these 5 I have seen work very well in practise myself, so can openly recommend them knowing they are proven…
All the best
P.S. Surprisingly (!), I publish a report on ‘How To Win Top Toy Licenses’, which includes more tactics and more detail on how to secure strong licenses to grow your business. For details, please go to www.stevenreece.com/shop
P.P.S. If you are a licensor, I’ll be posting an article soon how you can get the most out of your licensees, and how to select them in the first place.