In cases where someone wanted to get in the business and had the money, if it was a location that I thought was appropriate and the attitude of the investors was in the right place – in other words, wanting to own a club to party every night with the girls was an automatic “no” -- I would say, “We can do this depending on who you have for management.” At that point, they’d either find someone and submit to me for approval or I would recommend someone … or I would never hear from them again because they knew I wouldn’t allow them to pimp out the brand for their own personal entertainment. But building a licensing program for an iconic name is more than just letting people use the name. I wanted to provide as much added-value as possible, so licensees would be happy with their experience and would stay with the program … and keep paying. After all, while making money may not have been my first priority, it was a very close second … and for some businesses, licensing can be the most profitable part of their business, as it was for Penthouse. Often, when I was asked by a prospective owner/investor what the sales of a converted club were before and after the re-branding so they could assess whether the brand was worth paying for, I would reply that while I couldn’t disclose specific numbers because of confidentiality, I could tell them that in every single license that came up for renewal, the licensee wanted to renew. To me, the best testimonial is when people keep coming back for more. In fact, over the 12 years from 2004-2016, we created the largest international chain of nightclubs in the world. Since I left, it’s trimmed back a bit, but the new people who are doing it have their own strengths and goals.
Talking about powerful global brands, what would you say are the requirements to have a long lasting successful brand?
Most people do not understand the real power of a brand. That sounds like a line from “Star Wars,” doesn’t it? OR how to use it. Putting it into words is fairly simple… executing it is not. So, here are my 3 points to having a successful brand:
#1. A “brand” is not just the name or logo, it is much more. The object of the brand or, more specifically, brand management is to get someone to do something or respond in a desired manner specifically because of the brand. Usually, that means buying something; but it could mean, for example, voting for someone when the brand is, instead, a person.
#2. People - businesses or consumers - buy a branded product or service for one or more of only 3 reasons. If a brand doesn’t satisfy at least one of these 3 reasons, the brand has little value other than as a name tag (or maybe some emotional value to the owner, such as the owner’s child’s name):
a. Familiarity – The brand is familiar to people so they buy that brand because they know what to expect, like going to Starbucks in a foreign country because you’ve gone there at home and you know what to expect.
b. Relationship – The brand reflects a relationship between the buyer and the brand which the buyer wants to reinforce, like buying a USC cap because you or a family member went to USC.
c. Aspiration – The brand represents something you desire (including attention, so this includes “vanity”), like when you buy a Louis Vuitton briefcase because you aspire to be affluent and successful and to be perceived by others that way.
#3. In order to accomplish the above, a brand must have an image that is clear and readily identifiable. And I’m not talking about a name that is clear, but rather what that name means to people. None of the above is possible if a person is exposed to a brand and the reaction is “I’ve heard of it, but I don’t know what it means.”
So, now that we’ve broken down the not-so-secret secret to a successful brand, one must start with an identifiable image. What is the image the owner wants versus what is realistic?