The Bass Line

Adam Bass, md of Golden Goose, talks through a number of reasons why a brand might reject a licensing opportunity and why ‘no’ is such an important word, both in life and licensing.

The power of

One of the first projects I worked on when starting up Golden Goose way, way back in 2002, was an idea to develop a Trebor minty breath spray. As a young(ish) newbie to the licensing world I helped pitch this into Cadburys before the idea was eventually subjected to the rigours of their gate process. When the opportunity was finally rejected after several months of work I was completely dumbfounded. My manufacturer partner was delivering a brand extension opportunity, coupled with significant amounts of cash for the rights to their, quite frankly, archaic brand. However, the answer, after multiple meetings and presentations, was still a painfully hard no.

During the following two decades, as Golden Goose grew and we developed a degree of experience, I experienced this pain of rejection multiple times, often from venerable clients who, in their wisdom, decided to reject ideas that, to my mind, were no-brainers. Of course the fact that our agency only earned commission on royalty generated may have affected our impartiality, but this didn’t dissipate the feeling of frustration when brand owners rejected licensing opportunities that we bought them.

Thanks to these rejections, some of our greatest product ideas and opportunities never saw the light of day but now, with the benefit of hindsight and multiple product launches under our belt, the rejection is easier to understand. In fact, while it’s not an exact formula, there’s probably some truth in the idea that a brand’s value is directly in proportion to the value of the opportunities it rejects.

Inset: An over excited licensee could over-estimate the effect a brand might have on their category.

The over-excited licensee

Often wide-eyed from a first visit to BLE, these manufacturers are usually new to licensing and tend to over-estimate the effect a brand might have on their category. While they may already have a partially successful product in play, the potential addition of your brand will tip them over the edge, securing massive retail listings and huge revenues with only a 5% market share. While it may be tempting to say yes to their enthusiasm and draw up an agreement with some hefty minimum guarantees, the reality is that, in 18-24 months time after the product hasn’t quite cut through (tanked) and the only income due is minimum guarantee payments, you’re in for some very difficult conversations.

The reputational risk assessment

In a conversation with a licensee about branded child car seats, my more experienced colleague suddenly grew dour and pessimistic, even with significant numbers on the table. It was only after the meeting that he shared with me the concern that our client would likely feel that this product was a risk too far for their brand. Other deals I’ve worked on have floundered because of too much soy (or soy from the wrong place), concerns over manufacturing practise and, increasingly, environmental/sustainability issues. It’s great that brands are embracing these important trends and that they are now part of the NPD process, because licensing has a responsibility to ensure that products and brands that espouse their core values do not undermine those values in their manufacturing methods.

Inset: Potential deals have been known to flounder because of too much soy (or soy from the wrong place) and, increasingly, environmental/sustainability issues.

Having started off 20 years ago as someone who didn’t understand why a brand might reject a licensing opportunity, I can now think of a number of reasons.

The additional product grab

Let’s say you have a gardening accessories licensee who sells gloves, pots and a few other bits and pieces. Let’s say that, because of a request from a retailer, they want to move into a gift featuring a pair of garden shears. This classic product grab is one you need to handle with care because, if your brand has the credentials to move into garden tools, this simple grant could potentially scupper that opportunity, leaving you with only one gifting licensee rather than the potentially very valuable addition of a specialist in the more serious garden tools category.

The over-engineered product

While it might sound odd, products that are too good and over deliver for the brand will surprise and confuse consumers who might be expecting a lower price and better value. It’s always difficult to tell licensees (who you trust to be the expert in their category) to tone down their product quality, but getting this wrong will just mean that you lose momentum and have to reformulate in 18 months after the sellthrough is worse than expected and retailers are pressuring you to delist the product. Asking for a reduction in quality and added value is a sign of a mature brand licensing programme that knows its positioning and audience.

The under-engineered product

Once you get past the excitement of receiving product submissions, you need to step away, step back and ask yourself the question, is this product actually any good? While it’s relatively easy to spot a cheap and nasty product, a poor quality submission may unfortunately be the symptom of the wrong partner and sometimes, no matter how much you reject, the licensee may just never get it right. However, you must persist. Saying no to the wrong product is a critical part of the licensing process.

These are just a small selection of the reasons to say no. No is such an important word in life; it requires courage, conviction and sometimes even moral rectitude to turn down, reject or deny yourself opportunities that might seem tempting or exciting. So, perverse as it may seem, these days I often tell licensees that they are paying for the brand owner to say no. Just ask any parent, it’s easy to say yes all the time but it doesn’t help you in the long run.

Next time, before you give the green light to a product or a licensee just remember that there is one, two letter word that can protect your reputation, save you time, insure you against disaster and generally keep you out of trouble.

Sure, yes is sexy and positive and optimistic and salesy, but if you want to know what you’re really worth, try saying ‘no’ once in a while.