“The asset we’re dealing with here is the company’s crown jewel: its intellectual property,” said Stone. “There is nothing more valuable that any of our clients own than their intellectual property, and licensing is basically about leasing out that intellectual property.”
Beanstalk is part of the Omnicom Group, Inc. and is the licensing agency for nearly 40 of the world’s best-known brands. The agency has developed thousands of brand extensions resulting in nearly $3 billion in retail sales in 2008. Beanstalk also has offices in Dearborn, Mich., London, and Hong Kong, as well as affiliates throughout the world, including Latin America and India.
As the agency has grown, Stone said he has seen a shift in the emphasis companies place on licensing. “Most companies that are engaged in licensing or are considering licensing as a marketing tool take it very seriously,” he said. “They recognize that it’s a way to extend their brands, reach new consumers, and further bond with their existing customers.”
Because companies are paying closer attention to licensing strategies, there is a greater demand on licensing agencies. Companies are more thoughtful and strategic when it comes to their licensing programs than they were decades ago when it was more of a transactional business, Stone said.
“I think we’ve done a good job of staying ahead of the curve at Beanstalk and advising our clients what kind of brand extensions they should be thinking about,” Stone said. “I think the clients are much more sophisticated about licensing than they used to be, and that’s a very good development.”
Licensing for the long run
At Beanstalk Group, the focus is on licensing products that will extend a company’s core identity for the long run. Brand licensing is more cautious and more aligned with the brand than entertainment licensing, which typically focuses on promotional products for vehicles like movies that have a shorter shelf life, according to Stone.
Stone points to his agency’s 11-year relationship with leading tool manufacturer Stanley Works as an example of a successful long-term licensing program. “With Stanley, the licensed products have been and will continue to be in the market for a very long time because they are true branded products, close to the core of what Stanley is about, and seamless with Stanley’s own products in the eyes of consumers,” he said. “Those are the characteristics of branded licensing that lasts for a long time in the market.”
The agency has evolved over the past several years, establishing a more global presence and refining the way it does business. “Our international growth is something we’ve been studying for a couple of years, and we decided we wouldn’t let the global recession slow us down,” Stone said. “There are a lot of untapped opportunities in a variety of international markets.”
Over the past two years, the agency has changed the way it looks at its business. It is now more creative with the people it hires, the kinds of clients it pursues, and is more flexible and knowledgeable when dealing with clients’ specialized needs, Stone said.
“With some of the internal tools that we have recently developed, we’re also far more advanced than our competitors when it comes to evaluating the economic model and profitability of each of our clients,” said Stone. It all boils down to effective use of time and resources and being transparent with clients, he said. With the new internal tools in place, the agency has been more effective at customizing its services and offering a compensation model that fits the client’s needs. Stone said his agency is also upfront about advising clients what services they need and what they don’t need to accomplish their goals.
“We’re in a business where our resources are our employees and their time,” said Stone. “We don’t make anything, we don’t have inventory, and we don’t have warehousing. What we sell is our expertise and the time we put into each and every client.”
“One of the challenges any professional service firm faces is how to engage, challenge, and retain talent because at the end of the day, it is all about the talent,” said Stone. “A lot of companies say their greatest asset is their talent, but most companies operate according to the maxim that the employees need them more than they need the employees. That’s not the case at Beanstalk where our culture is to challenge and motivate employees so that they remain with the agency.” At Beanstalk, Stone said he addresses those issues in part by creating a company that is transparent, accessible, and supportive and that provides employees with life experiences such as those offered by the agency’s Beanstalk Charities program.
“We’re searching for people from different walks of life and disciplines. We hire for attitude as much as skills,” he said. “We rarely hire people from the licensing industry itself. When we bring in new talent, we have a comprehensive education and orientation program, as well as training programs for all employees.”
There’s a sophisticated career development program at the agency that helps employees know what needs to be done to move on to the next level or to more complex work. Beanstalk hires people with a high need for achievement, and then the company makes sure they get the proper feedback and guidance.
“We’re constantly focused on bringing in the right people and making certain we are doing everything we can to nurture and challenge them,” he said. “We live by the maxim that if you have satisfied employees, you will have satisfied clients, and if you have satisfied clients, you will be profitable.”
Focusing on having satisfied employees who face and meet challenges is more important than focusing on profits. “When I say satisfied employees, I don’t mean just trying to make people happy,” Stone said. “It’s not about free pizza on Fridays; it’s about employees having the chance to grow in the workplace, to stretch their capabilities, to be trained in new disciplines, and to be involved in both the business of licensing as well as our many corporate initiatives.”