How quickly an ETF, mutual fund or other investment vehicle reaches peak market share can have a massive impact on a company’s bottom line. In fact, according to ZS’s analysis of mutual fund launches between 2002 and 2012, reaching peak market share in 24 months instead of 36 could generate an additional $5 million in revenue for the average new fund, and up to $50 million for some larger funds in the first 36 months alone. But one question remains: How can we accelerate growth?
Asset managers have a lot they can learn from the pharmaceutical industry on this front. In terms of the criticality of product launch success in pharma, consider the following:
- Doctors generally adopt a new therapy within the first six months of launch. Missing that window with doctors could prove disastrous for the therapy.
- Following the initial launch, new drugs have 10 to 15 years to maximize their sales before they lose patent protection.
- A poorly executed product launch could, in some cases, have a multibillion-dollar impact on the bottom line.
Asset managers may not have nearly as urgent a timeline or as great a bottom-line impact as pharma, but for strategically crucial product launches, they need to get it right or risk losing windows of opportunity. With that in mind, here are two processes commonly used in pharma that asset managers should consider adopting:
- Launch readiness review: Best-in-class pharmaceutical companies conduct a launch readiness review before investing in the final round of capital in a new drug. The goal of the assessment is to make sure that the product launch team has chosen the right launch strategy and is prepared to execute the launch effectively. This readiness assessment goes beyond product design and manufacturing and focuses on how to win in the current market environment by creating a detailed, cross-functional plan so that sales, marketing, PR, analytics and operations will be ready to support a product launch. Each strategy is expected to be different than the last launch.
Asset management firms should conduct similar cross-functional launch readiness reviews to align their sales, marketing, PR and operations functions when launching a new fund or investment vehicle.
- Product launch control tower: Pharmaceutical companies often have a product launch control tower team that’s responsible for the rollout of the new product, and for ensuring that the sales team, marketing materials, sales positioning, customer targeting and compensation plans are all in sync. This team continues to meet in their launch room (they literally have a room) for the first year or two after launch to review early sales results, discuss feedback from the field and new market research, and change (or fine-tune) the approach.
Over the next two to five years, best-in-class asset managers should move toward having similar product launch control towers as gaining shelf space becomes more challenging and access to advisors continues to become tougher.
Adopting these processes can help asset managers align their efforts with market needs, increase collaboration between product development and sales and marketing teams, and accelerate time to reach peak market share. By following pharma’s example, asset managers can accelerate growth and make sure they’re not leaving multimillion-dollar opportunities behind.