One of the most important things you can do in licensing is listen to what a potential partner has to say about your intellectual property. Regardless of what type of IP you have – technology, character, software, formula or process – potential licensing partners will see it from a different perspective of how it can or cannot benefit their business.
By having an open ear, you’ll learn what the partner needs to make it worthwhile for them to license it. It’s an opportunity to find out how to customize your IP to overcome objections and make it attractive for the company to move forward with a license. One of my clients created a series of children’s books featuring a bear character. Because the character was unknown in the marketplace, it was challenging to find an early licensing partner who was willing to license the character and produce products.
In one situation we had a meeting with a toy company that makes stuffed animals. They liked the character and were interested in it for the hospital gift store market. However, because it was new, they were concerned about licensing it because their customers wouldn’t buy an unknown bear character.
This is why one it’s so important to listen and ask questions. They shared some critical pieces of information that made a big difference in how our discussions proceeded. To address their buyers “unknown” concern, we offered to package a book with it. Another critical piece of information was that the hospital gift store buyers evaluate products on whether they can be packaged in different ways. We offered to customize the bears in a pink shirt for girls and blue shirt for boys, and add an accessory such as a “get well soon” or “happy birthday” balloon or card.
At that point, the licensee became very interested because they felt that their customers would be more likely to buy the bear, especially if the book was included to tell the story. My client developed several prototypes and sent them to the company. They used the prototypes to talk with their buyers. Once the buyers expressed interest in buying the bears, they were ready to start discussing terms for a licensing deal.
Don’t make the mistake of turning a deaf ear when presenting your licensing opportunity. Remember your IP is only valuable to a potential partner if they feel it’s of value to their customer. By keeping an open ear, you’ll find out how to tailor your IP to meet a partners need or problem, and increase your likelihood of closing a licensing deal with that partner.