A client recently told me they wanted to license other companies to produce their software in other countries due to language/translation differences.  When I asked what the desired result was that looked at me quizzically and said “like...why not?’  I have implemented select licensing agreements-some have been successful-some not.  If you go into it thinking it’s a quick way to grow without a significant investment-think it through, it it’s too good to be true then it’s probably not true.  What differentiated the successful license arrangements was that the success took time to bear fruit e.g. 5 years, there was a mutual investment in time and effort and the scope of the project was very well defined.  It is truly a partnership.

Licensing is not a verbal agreement-it needs to be written so it is best to discuss the goals of the licensing arrangement nose to nose at the outset.  Once there is verbal agreement on the roles and responsibilities of the licensor and licensee, the limits of the agreement and the desired outcomes then you can start drafting an agreement.  Licensing is a contractual agreement whereby the licensor transfers the rights to distribute or manufacture a product or service usually in a foreign country or in a specific market.  In exchange, the licensee pays a flat fee, a % of sales or some other type of consideration in exchange for these rights.  The licensee takes the risks and makes capital investments for manufacturing the licensed goods, managing the supply chain linkages and selling the products in the licensed market.   In one case, we provided a life of machine part for sale to customers and the licensee provided the consumable mating part.  This licensing arrangement was very successful because we were mutually dependent.

Licensing works best when:

• There a trusted partner that will respect the boundaries of the agreement and has successfully licensed other products in the past.
• It takes place In difficult countries where there may be logistical, regulatory or import tariff issues that make exporting prohibitive.Country examples may be India, Russia or Brazil.Always specify that these products cannot be re-exported from the licensee country.
• It takes place in specific market segments e.g. food, medical where the licensee has a distinct market advantage over the licensor
• There are high volume opportunities, but not enough licensor capital to devote to local factories, logistics infrastructure and a sales network.

There are risks manage because you are ceding control by understanding:

• Your licensee could become a future competitor.
• Your IP could be lost in this territory.
• Poor quality management by the licensee will harm your brand because the world knows it’s your product under license.
• That license periods are time limited so project the post license period.

Essential parts of the license agreements for the licensor are:

• Exclusivity rights in a specific territory or market segment.
• Inability to reassign the license.
• Payment schedules.
• Audit.Unfettered Access to Product samples, product quality and sales data.
• Term of agreement.
• Termination of agreement.
• Confidentiality of all transferred IP.

Licensing arrangements must be set up properly, continually nurtured and monitored for maximum success.  One can’t grant a license, walk away and hope for quick results or I would have embarked on this career path 40 years ago.  One of the members of our Tradewinds Council © https://www.jimthomasintl.com/the-tradewinds-councilcopy.html stated that their company uses licensing as a last resort due to import restrictions.  It was ceding too much  control for a client where brand is king.

Do you want to have a free fifteen-minute call on the profile of a potential licensing arrangement?  Sign up on my web site or contact me directly by phone.

Good Selling!

What tips have I learned over the years making presentations to global executives?

1. Time is of the essence.  This does not mean talk fast and leave.  It means that you have a chance to start a dialogue-seize it.
   1. Start on time so you can end on time.  Ending early is bonus time on a busy person’s schedule so be efficient.  Leaving the meeting a little bit early so people can take back their calendar is appreciated.  You can banter afterwards to forward your relationships with those interested.  I have found that this is the best time to close with decision makers.
   2. Maximize interaction and a dialogue in your meeting.
      1. Divide the meeting in two.  ½ presentation-1/2 discussion.  State this on the agenda.  Leaving 1/2 the time for Q&A demonstrates you want a dialogue.  Addressing questions during the discussion keeps the audience awake and engaged so don’t put off questions.  When you are done sit down to advance the discussion.  Keep the last slide up-make sure it is graphical.
      2. Don’t belabor the obvious.  No rehash of prior discussions. No discussion of process or methodology unless asked.   Stay relevant and focused on problems and solutions.
      3. Have a list of preliminary questions you want to ask the audience to stir discussion and obtain feedback.  Take notes on responses.  It shows respect.
      4. Remember Guy Kawaski’s The Art of the Start, Rule #7 on pitches to VC’s-10/20/30.  10 slides-20 minutes-30 pt. font.
2. State the problem and its consequences.  You are competing for time on a long list of problems to be resolved.  Answer the obvious question-Why this?  Why now?  The first ½ of your presentation or ¼ of the PPT time is spent addressing these two questions of relevance.
   1. Identify the problem boldly.
   2. Discuss context of the problem and the pain points.
   3. Build a sense of urgency to resolve the problem.  Create a bias to action.
3. Present the solution. The second ½ of your presentation, ¼ of the PPT time is spent here.
   1. Qualify how this solution will solve the problem.  Identify the effects to both internal and external stakeholders.
   2. Quantify the solution.
      1. State the investment cost.  Include infrastructure, installation, training and rollout costs and time frames.
      2. State the investment payback in time upon implementation.
      3. State the effects on competitors, market position and brand.
4. Know the details.  There will someone in the audience better at math and logic than you, usually the CFO (Dr. No).  They will be looking through your calculations to make sure the numbers and logic are accurate.  If they point out a flaw and are correct you lose all credibility.  Have your CFO or Controller look through your PPT for the flaws and check and recheck your #’s and assumptions.  You will get asked these types of details.  You are the subject matter expert so be deep.
   

Speaking in front of a group is hard.  Speaking to a diverse executive group exposing their problems is even harder.  No one likes having their flank exposed, having a solution to that problem delivered respectfully necessitates artful delivery.  Previous blogs have addressed selling products to groups: https://www.jimthomasintl.com/blog/key-account-skills-required-in-todays-world , but realize today’s blog is for a different audience.

Do you want to have a free fifteen-minute call on your C suite presentation?  Sign up on my web site or contact me directly by phone.

Good Selling!