5 Strategies Brand Owners can Learn from Donald Trump’s Licensing Empire

Posted by Jeff Lotman on November 05, 2015

5 Strategies Brand Owners can Learn from Donald Trump’s Licensing Empire

 

by Jeff Lotman

 

Skeptics may doubt the Donald’s credentials as a politician up to the demands of the Oval Office, there’s no denying that Donald Trump is a savvy businessman who has made billions on real estate and a host of other income streams. Presidential hopefuls have always been required to disclose their income sources, but never before has that procedure been so, well, fascinating as with Trump’s 92 page earning report, released by the Federal Election Commission this past July. A look at the real estate mogul’s income streams reveals a branded empire that extends from hotels to golf clubs to mattresses to neckties. In classic Trump fashion, no stone is left unturned. Instead, every stone is branded in Trump’s signature gold.  

 

While critics have long accused Trump of inflating the value of his brand, which he claims to be worth “in excess of 10 billion,” his self-reported earnings from the past 18 months include an impressive $1.4 billion in real estate and other holdings, as well as $431 million in income from various sources. A major cash cow in Trump’s arsenal? Brand licensing deals.

 

The Trump Foundation is the 106th largest licensor in the world, with annual retail sales estimated at $225 million, according to the trade publication Licensing Global. In the FEC report, Trump valued his recent royalties from licensing deals to be somewhere between $9.4 and $28.2 million—not a bad income for doing little work besides granting the rights to his name. So what licensing lessons can you learn from Trump to extend your own brand? Like his signature hairstyle, there’s some major do’s and don’ts to take from the Donald.

 

1. Limber Up: Elasticity is key to Trump’s successful licensing empire. The ability to stretch from one offering to another depends on the perceived image of your brand. The Trump image is built around a luxurious and successful lifestyle, a concept well positioned to stretch to a wide array of items, from hotels to golf courses to furniture to business attire. Is your brand adaptable enough to extend into new markets that organically communicate your company’s image and core values?

 

2. Diversify Your Empire: Elasticity allows companies to cast a wider net in terms of logical distribution channels. Does it make sense for your brand to extend into mass market retailers, department stores, supermarkets, dealerships, or some other channel? Which will extend your reach most appropriately while bringing in new revenue streams? When Trump started as a successful young New York developer, it logically made sense to license his name to luxury hotels. His success allowed him to branch out to golf courses, and then retail products. By expanding the scope of his empire with every licensing deal, Trump has created a brand that consumers can take with them all throughout the day, from a prestigious address to a round of golf, right down to branded beverages and a Trump mattress for a luxurious night’s sleep. Like the Donald, don’t settle for your current licensing deals, but think of them as stepping stones in an overall plan of brand expansion.

 

3. Protect Your Brand: With such a large empire built around the cache of a name, Trump has to be vigilant about shutting down imitators that threaten his brand integrity. Since 2004, Trump has pursued 12 cases at the World Intellectual Property Organization, which protects website trademarks. Of those cases, he won all but one, shutting down companies looking to ride on his name’s good fortune. While you probably won’t have to be as aggressive as Trump, it’s good to keep a lookout for imitators diluting your brand.

 

4. Don’t Sabotage Your Equity: Trump’s controversial remarks on the campaign trail have dealt a severe blow to his brand equity. Common sense would dictate that one not make racist comments about Mexican immigrants when one’s branded products are manufactured there, but the Donald thrives on controversy. Despite NBC, Univision, Macy’s, Serta, and others severing ties with Trump licensed products in the wake of his inflammatory comments, the reality is that Trump’s empire extends far enough to be able to sustain such a hit. But companies of a smaller size would have sunk under such backlash, so be aware of how you communicate as the face of your brand. How might your public stances affect your distribution channels? Sometimes it’s best to leave politics out of it.


5. Don’t Prank Your Products: While Trump got some chuckles by sending a case of Trump Ice, his branded bottled water emblazoned with his face, to Republication competitor Marco Rubio, it’s a tacky move. Trump’s team sent a note saying “Since you’re always sweating, we thought you could use some water. Enjoy!” Pulling his products into the political arena could backfire. Even though Trump Ice is owned by the Donald, other licensed products could be reconsidering their ties after Trump’s campaign commentary and public stunts. 

 

——

Biography:

 

Jeff Lotman is the founder and CEO of Global Icons, a premier brand licensing agency that serves a rapidly expanding portfolio of market-leading clients including BMW, Ford, and Motorola. With over 15 years experience as an industry leader, Jeff Lotman is an expert in advising companies on how to strategically extend their brand to engage with new consumers while increasing revenue. His extensive knowledge on all things branding, marketing, and licensing comes from a passion for building dynamic brand extensions combined with a background in elevating some of the most iconic brands in history. 

 

Links to Other Posts:

 

Jeff Lotman, Founder and CEO of Global Icons on Retail Brand Licensing Careers

https://nrf.com/news/jeff-lotman-founder-and-ceo-of-global-icons-retail-brands-licensing-careers 

 

Global Icons

http://www.retail-merchandiser.com/index.php/reports/licensing-reports/309-global-icons

 

Social Media:

 

LinkedIn

https://www.linkedin.com/in/jefflotman