University Business - March 2007 - (Page 21)

Warning : session_start : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : session_start : Cannot send session cache limiter - headers already sent output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : Cannot modify header information - headers already sent by output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 10 VIEWPOINT Licensing: Opportunities and Pitfalls Restrictive and exclusive product licensing practices may reduce complexities, but are they maximizing revenue? By Lucie Voves HEN I STARTED MANU facturing customized diploma frames 16 years ago, I quickly realized I was going to need authorizations from the colleges and universities to use their name, seal, and logos. I learned that some had well-defined systems for granting usage rights and licenses, while others were uncertain of how to set up a formal licensing procedure. Some were openly skeptical about the value of such licensing endeavors. Many administrators did not respond to my request for permission to use their school logo or branding on a diploma frame. Many had little knowledge or interest in marketing their “brand” through licensing high-quality products. As I became more conscious of how important licensing relationships were going to be for my business, I made comparisons to other industries that were capitalizing on licensing opportunities. In competitive sports, salaries for professional athletes were skyrocketing, and team and league management aggressively used licensing as a vehicle to boost revenues needed to fulfill their expanding payroll commitments. Perhaps administrators at IHEs began to adapt from what they observed in these related licensing fields. The benefit to institutions was the generation of a new revenue stream, capitalizing on their brand equity by thoughtfully assigning rights to use the institution’s name and logo on commercial products. Over the past decade, licensing opportunities have escalated as a result of improvements in license management, graphics capabilities, and reproduction W Insignia gifts, typically displayed in homes and offices, become free daily marketing exposure. quality, as well as the broadening spectrum of feasible products. With the momentum of licensing success, administrators at many IHEs have been broadly issuing licenses and building an increasingly complex-tomanage web of vendors and enforcement issues. Some schools have become overwhelmed with the number of vendors and products to evaluate, monitor, and manage. Now many are pulling back and becoming increasingly restrictive or even exclusive in certain product categories, aiming to ease the complexities. But they’re not always carefully assessing how to best maximize revenue at the same time. INSIGNIA GIFT OPPORTUNITIES It’s important for IHEs to determine what licensing arrangement will generate the op- timal balance between revenue, high-quality exposure, and manageability. The key here is benchmarking. Reach out to peers in other similarly sized and situated schools to find out what they’re doing, where they excel, and what pitfalls they have encountered. Capitalize on their experiences. Other key resources for this kind of information: existing licensees, a licensing agency, the bookstore, and successful off-campus retailers. This research helps ensure sound decisions in the long run. According to a recent Collegiate Licensing Company CLC study, the topperforming licensor schools were generating nearly 60 percent of royalty revenue in apparel and almost 40 percent in nonapparel categories, including insignia merchandise and gifts. The schools with lowertier licensing revenues averaged 85 percent of royalty revenue in apparel, and only 15 percent in nonapparel insignia merchandise and gifts. The old-school thought that T-shirts and caps are the licensed business backbone is increasingly outdated. If a school’s licensing program is in the segment where 85 percent of revenue comes from apparel, it’s missing a significant and growing piece of the royalty pie! For schools with underdeveloped insignia gift businesses, the temptation may be to dramatically weed out insignia gift vendors, since they represent a relatively Lucie Voves is president of Church Hill Classics/ DiplomaFrame.com, which has licensing/partnership relationships with more than 650 U.S. colleges and universities. She is a former Procter & Gamble marketing executive. www.universitybusiness.com March 2007 | 21 UB_307_Vwpt.indd UB_307_Vwpt.indd 1 2/21/07 11:42:31 AM Warning : Unknown : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in Unknown on line 0 Warning : Unknown : Failed to write session data files . Please verify that the current setting of session.save_path is correct /var/lib/php/session in Unknown on line 0 http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - March 2007

Contents
College Index
Company Index
Advisory Board
Editor's Note
Stats Watch
Sense of Place
Viewpoint
Marketing
Human Resources
Financial Aid
Money Matters
Community Colleges
Title IX Turns 35
It’s Electric
Lost in Space
Transportation Trends
Details of Retail
Business Technology
What's New
Calendar of Events
Direct Connect
End Note

University Business - March 2007