When I started manufacturing 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.
Insignia gifts, typically displayed in homes and offices, become free daily marketing exposure.
Over the past decade, licensing opportunities have escalated as a result of improvements in license management, graphics capabilities, and reproduction 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-to-manage 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 optimal 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 top-performing 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 lower-tier 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 small segment of revenue. But this could dramatically reduce in future revenue earnings potential. This cost is twofold-first, in the obvious missed revenue dollars, and second, in the lost "guerilla marketing" exposure benefit. In most cases, these items are purchased as showpieces. Examples are wall clocks, desk accessories, insignia chairs, diploma frames, lamps, watches, crystal vases, and framed campus art.
If nonapparel sales aren't generating 40 percent of an IHEs royalty income, the high-end insignia gift business is one of the largest potential revenue sources-particularly at a time of heavy investment in marketing programs to stay in touch with alumni. How else can you earn prime real estate in homes and offices of graduates worldwide? Insignia gifts allow an institution to earn licensing revenue and, at the same time, benefit from free daily marketing exposure that even the savviest marketing expert could never duplicate.
