A common question that arises when brands consider initiating a brand protection licensing program is whether the brand is “big enough” to warrant the investment in those kinds of services. We work with many brands that were, at first, concerned with this very topic. Below we take a look at a few reasons why three brands chose to implement a brand protection program and their results.
1) Reduce Counterfeits in the Marketplace
An iconic celebrity brand was concerned that its brand value was being diluted in the marketplace due to unlicensed knock offs. While this brand wasn’t listed on any the top-earning licensed brands lists, it enjoyed an enormous global following. Adding a product authentication label on all officially licensed products helped maintain the integrity of the brand and allowed consumers to easily distinguish real from fake.
2) Build Brand Value
A popular brand specializing in motorcycles and biking equipment faced a counterfeiting problem with its licensed merchandise. The brand itself is extremely well known, however, its licensing program is not huge but it enjoys a cult following and dedicated fan base, so knock-offs are particularly damaging. Implementing a brand protection program helped ensure customer satisfaction, and virtually eliminate any question of authenticity.
3) Increase Royalty Revenue
Even city government licensed products get knocked-off. In one particular case, a city tourism department encountered a major problem with counterfeits that was damaging their relationships with legitimate licensees and eroding their royalties. Although a hyper-local program, tourists attracted to the location oftentimes unknowingly purchased fake replicas of the products, significantly detracting from brand value. The brand authentication program they implemented has resulted in a 70% increase in their royalty revenue for their tourism marketing department, vastly improved market share for their licensees, and provided a way for tourists to check for authenticity.
These cases show that a brand does not necessarily need to be “big” in order to invest in brand protection measures. There is a fairly simple test to check and see if your brand has reached the threshold.
Assuming you intend to grow your market share, and if your brand achieves a reputation that attracts consumer and distributor interest then your brand has become an attractive target for gray-market and counterfeiting activities, and brand authentication programs will pay substantial dividends.
The answer is not a specific number or a percentage: the answer relates to the presence of market demand associated with your brand identity. The real question is not about size, but the presence of brand value. That demand becomes the core asset that drives licensing revenue, and that calls for the brand protections that licensing technologies and services provide. If it is worth it for criminals to attempt to rob your brand, then it is worth it to invest in brand protection.