by: Geoff Ficke
I recently met a bank executive who had been laid off in a corporate downsizing. The man was understandably concerned about his and his family’s future. He lived in an area that was experiencing exceptionally stark economic circumstances. This gentleman had received a modest severance package, and this slim lifeline was of crucial importance to his immediate future.
My marketing consulting firm had been asked by the former bank executive to review a business opportunity he was considering investing in. He was not sure whether he should plunge into an entrepreneurial venture or hoard the severance and use it for basic family needs for as long as it would last. This is a tough call and one we see people forced to make all too often in these tough times.
Of course, we diligently attempt to advise clients to take the most realistic, prudent path when considering such a lifestyle change. In this case, this family man had never been self-employed. Could he absorb the constant buffeting that entrepreneurs experience as they attempt to start a new business life in a completely new industry? After a good deal of consultation, probing and presenting a mountain of “devil’s advocate” questions, the client was able to impress us with his determination.
The business he was considering purchasing was a small manufacturer of a Home and Garden yard accessory line of products. The products were mundane. There was plenty of competition. He enjoyed no particular Unique Selling Proposition (USP) or pricing advantage.
We could only identify one USP that was not being addressed by any of his Home and Garden category competitors. This was Affinity Licensing.
We called several local major universities and discussed obtaining the rights to use their school colors, mascot icons and logo’s on the yard product. After viewing the products and negotiating use of their trademarks, each university agreed to allow us the license for specific product adornment. We paid a small usage fee, agreed on a percentage royalty and obtained rights for using their art on specific products that we would manufacture, market and sell.
The new business owner, the former bank executive, now had a chance to differentiate his product from his competitors. He made a small inventory utilizing each University license to dress and enhance his Home and Garden accessories. Initially, he sold product to local landscapers, florists and garden shops. The products flew off shelves.
Licensed product, also known as Affinity product, always enjoys superior loyalty from proud alumni, sport team fans and supporters. Affinity products also enjoy premium retail pricing over unmarked competitive products.
Our client, the newly minted entrepreneur, is already expanding production. He is negotiating with the NCAA and major sports leagues for more licenses. His licensed Home and Garden products have been accepted to participate in a national trade show heavily attended by big box retail buyers.
This client simply did not lose his head in the face of great turbulence in his life. He made all of the right moves and was prudent in seeking guidance, support and performing due diligence before he jumped into the fire. The future looks bright at present. Income opportunities abound and by creating a USP for his product he separated his new business from more entrenched, larger competitors.
