Competing in the global market is very difficult. Companies, especially the middle-sized ones, are facing very challenging times. Delocalization linked to low cost production forced quite a few of them out of business. Consolidation made victims, and “boutique” operations are at risk.

Some countries are offering cheap alternatives to the traditional way of running businesses. From low-cost production to cheap labour… and all the big companies are already there. Just have a look at the “made in” tag in your sweatshirt or sneakers or earbuds to see what I am talking about. How can a company operating in such a difficult scenario manage to keep afloat or, even better, to thrive?

Sport licensing can be one of the ideas to look into.

Sport licensing provides your company with the possibility to use a famous team’s logo, name, or imagery on your products, increasing the appeal toward fans.

It could be a very effective tool, yet it could cost less than you think. The use of a particular brand or testimonial can add much more spice to your product; the values of the brand you use or the image of the testimonial will change the perception of your product as much as it will change its price.

The buying motives of any object or service are complex and, according to the business dictionary, can be summarized like this:

“The combination of facts and the emotional state of a person that generates a feeling within them that they need to purchase an item, as well as the factors that influence their eventual choice of a particular product.”

Licensing will work on the emotional part of the motivation

Linking a product to a certain brand can alter the way the product is perceived. The purchase itself will follow a path slightly different from the ordinary. If you are a fan of Manchester City, you will be happy to pay 10£ for your branded mug, even though a mug of the same capacity and quality will set you back a couple of pounds at Tesco.

The object itself represents for you a way to show you belong to a group, a distinctive sign, an extension of your passion, an item that reminds you of your favorite team…so why not?

How can a company use licensing to its favor?

Because licensing, if properly executed, can give you the opportunity to attack the premium price segment, increasing the overall margin of your operation. At the same time licensing will offer you a great storytelling opportunity. The sports brand you will use has got plenty of personality and heritage that can be leveraged to your benefit.

Licensing will even give you the chance to target new customers; these customers or fans could be reached via the web anywhere in the world. On top of that, you will be able to run tactical promotions on them.

And we are just starting to scratch the surface of the possibilities.

How much does sports licensing cost?

Any licensing project is generally composed of two parts: the minimum guaranteed and a variable commission on sales. So If I were you, I would wish that the Sports Licensing operation I was engaged in was extremely expensive… Because much of those costs would have been generated by sales.

The minimum guaranteed is a sort of “insurance policy” required by the owner of the team in order to make sure that one who buys the right to do something will then sit on the right and not use it. The fixed amount of money that the company pays shows that there is a genuine interest in pursuing the operation after the deal is signed. Generally it is a lump sum that covers legal expenses and the cost of the time that the company invests to prepare all that is needed for getting to the signature.

Which sport should I go for?

It depends on your product, it depends on your target, and it depends on which objective you set for yourself and link to the operation. Maybe you do not need something interesting for your existing client but a brand that will help you broaden the target.

Better a person or a team?

Generally speaking, sportspeople come and go; teams stay. So if your action is tactical, a winning testimonial can do wonders. Obviously it depends on the testimonial, and this rule doesn’t apply to giants such as the likes of Federer, Michael Jordan, or Valentino Rossi. If your time horizon is from middle to long term, a team would be advisable.

Some examples of sports licensing

Have a look at the following products… but since we hope you are not a follower, we think that you can build your own path.

If you have a perfume, you can go for a testimonial or for a brand. I am sure you’ve seen some of the most prestigious brands in the automotive field already engaged in this field.

If you are a fashion company, you can have different approaches; you can try to be the official supplier of the team and sell replica kits, or you can buy into the world of that sport and try to use its heritage.

If you have an electronic device, you can go for a sport linked to technology, such as motorsports or the Americas Cup, or again, a testimonial. Click this for an example linked to Valentino Rossi 

Want to know more? Hit our Licensing page here. If it’s time for a chat, then mail us at info@rtrsports.com

PS: all brands and pictures used in this article are for illustrative purposes only