If licensing isn’t part of your marketing strategy, you could be missing some big income opportunities.
Licensing is often thought of as a separate strategy – either we use licensing to generate revenues or sell our products directly. But that’s the wrong way to think about licensing. On the contrary, licensing is actually one of many marketing strategies.
The most common strategy is direct licensing to generate revenues. But that’s not the only way. Another strategy that’s often overlooked, is using licensing to deliver more customers (and revenues) for your core products, services, or technologies.
And that’s just what one bio tech company is doing. Their patented tissue based cellular technology is used by the regenerative and personalized medicine industries. It’s using licensing to generate revenue with both its technology as well as its core service, a laboratory R&D platform.
The goal of the licensing strategy is to use their patented technology to set up a global network of licensee laboratories that operates under its research and development platform. This strategy uses their tissue cell technology as a feeder to drive business into its R&D development platform.
The company gets paid license fees on the cell technology, R&D platform training, and a percentage of the gross revenue generated from sales of products developed using the technology and R&D platform. Plus it also receives revenues from the sale of materials required to use the company’s technology for research and development.
This is a great example of how licensing is part of a marketing strategy to drive revenue for your core products. But there are many other ways to use licensing. Procter & Gamble licenses out their packaging design for one of their laundry soap brands, a marketing strategy designed to level the competitive playing field. By letting competitors use their packaging designs, it eliminates the “packaging features” of competing products, enabling P&G to focus its marketing on product quality.
Another variation of this marketing strategy is to license your technology to other competitors in the same industry and accelerate its adoption by the market. That’s exactly what Tesla and Toyota are doing. Tesla opened its patents to competitive companies to help build the electric vehicle industry. And Toyota offers royalty free licenses for its hydrogen fuel cell patents to accelerate development of hydrogen powered cars.
Other strategies include using your know-how and trade secrets to improve your production and distribution. If you’ve got a new patented product but the real secret sauce is your manufacturing know how to make it do what it does, license the know-how to your manufacturing supplier to get it produced and delivered quickly. Or your on-line ordering system that lets your customers quickly find, customize and get your product delivered, license it to your fulfillment center to insure fast delivery. Not only do these licensing strategies help generate more revenues (or lower costs) for your core products or technologies, it also generates new revenues from competitors using your IP.
When you think of licensing don’t think of it as something separate from your marketing strategy. Make IP and licensing part of your marketing strategy. Use it to partner with other companies in different markets or industries, and drive revenues to your core products or technologies. In today’s globally connected market, your competition is no longer your competition. Instead, they are potentially some of your biggest income opportunities.
So where do you go to find out what the best marketing, sales, branding and licensing strategies are for today’s fast moving markets? The best place is at the upcoming Med Tech Marketing Summit. But don’t let the name fool you. Even if your businesses isn’t “med tech”, the insight you’ll learn from industry experts, who will discuss how to recognize new marketing trends and how to capitalize on them, will give you actionable information you can use now to grow and expand your business. I’ll be speaking on licensing and how to use it as part of your marketing strategy.
You can find out more about the Med Tech Marketing Summit at www.MedTechMarketingSummit.com. And for a limited time LCG subscribers get a special event registration price of $99. Just enter the promotional code BRENNER when you register.
Click here to register for the Med Tech Marketing Summit.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges and startup events. He’s a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.