How To Successfully Launch A New
In my experience, the firms that are consistently successful in launching new investment vehicles leave nothing to chance. Early in the product development process they fully address several basic issues. The following questions provide an effective framework for exploring these points.
Developing a "me, too" product can reflect poorly on your firm's integrity and ability. After all, you're dealing in a sophisticated marketplace - one that steers clear of obvious opportunism and greed.
It follows, then, that any new product you offer should be an honest reflection of who you are and what you do best. You must be prepared to support it with the resources and marketing commitment equivalent to that of your established, mainstay fare. And when you can clearly demonstrate how the new offering matches your firm's capabilities, you build credibility for both the product and your firm.
Too many firms say, "If they don't ask that question, they don't bring up that issue, we're home free." The reality is quite the opposite: If they don't ask the question, they're more than likely harboring it. You could easily end up not getting the business and never knowing why.
This leads to the problem of how to deal effectively with perceived risk specific to your product, as opposed to inherent risk. I can't emphasize strongly enough the importance of identifying negative market perceptions at the earliest possible time.
To do this, I recommend conducting qualitative market research during the early stages of a product's development to gain the views of key opinion-makers and prospective buyers. In my experience, this is the only way to acquire the honest understanding you need of how the marketplace perceives both your product and your capability to offer it. You gain not only an invaluable "gut" sense of where buyer concerns lie, but also the added bonus of uncovering what the market perceives as your strengths. With this understanding, it becomes possible to develop an unusually strong conceptual positioning for your product, one that is precisely targeted to allay buyer doubts and reinforce positive impressions.
I am not a proponent of "KISS." The premise of "Keep it simple, stupid" is that it's better to stay safely on the surface: throw in the buzzwords, try for the sizzle, and hold the steak. This superficial approach simply doesn't work anymore.
When the interest in professional investment management was just heating up, the firms who were able to describe their investment approach in the most simplistic terms won a great deal of business. That phase is behind us. As one plan sponsor recently told the third finalist in a contest of four: "If I hear 'we believe in base hits, not home runs' one more time, you'll be asked to leave."
We are now operating in a much more sophisticated marketing environment. Providing the investor with clear, accurate information has become vital. You can't establish credibility in today's marketplace without clarifying exactly what makes your product work and how it's different.
While the plan sponsor or investment committee making the decision may not be formally trained in investment theory, they are intelligent people. And the burden is on your shoulders to educate them. You need to emphasize content, work on the logic and make even the most complicated concepts absolutely clear.
Unfortunately, many good firms still use the desire to maintain a low profile as an excuse for not doing quality marketing, for not moving ahead and presenting their products in a truly compelling way. In these times, this trait almost inevitably leads to one result: dwindling market share.
I believe part of the reason many people in this industry are unwilling to stand out with their marketing material is because they are afraid of appearing "slick." Let's talk for a moment about what slick really means.
Slick is delivering a visual promise that far exceeds the depth of the content inside. It's an ad, or a brochure, or a quarterly report that's all dressed up with nothing to say. Slick materials waste a prospect's time.
The alternative to slick is quality packaging built around a core of strong ideas. Effective marketing materials counter key concerns, build on your strengths and clearly establish your identity. Quality packing rises above the noise and commands attention because it communicates who you are. It rewards the buyer's time.
The first step in making a long-term marketing commitment is to achieve consensus within your organization. This requires that key people in every function are given the opportunity to contribute their special expertise during the product development process and that they fully understand the firm's goals for the new offering. This "buy-in" is vital.
Building on consensus, you can then begin to develop a powerful marketing program. In the highly competitive consumer product market it's a well-known fact that frequent repetition of a message - in a variety of media - is absolutely necessary to convince the buyer of a product's benefits. The investment industry must now make this level of marketing commitment, which represents a major change for our business. Effective marketing is not a one-shot deal.
Quality brochures, quality direct response campaigns, quality advertising all cost money. And they also require your ongoing interest and energy. You cannot abdicate that responsibility. If you do, even the best creative people will not be able to compensate for your lack of commitment to your own product.
It's a sad truth, but in our business the right firms often fail to get the business because they pour all of their resources into developing sound products and little or none into developing equally sound marketing programs. This puts any product's success in certain jeopardy. Your marketing team must be working immediately from a product's inception to achieve the momentum you need to gain recognition and acceptance. Quality marketing takes time. It simply cannot be done on a "catch-up" basis.
Our industry is at a critical juncture. The field is being flooded with contenders drawn to investment management by the well-publicized opportunity to make big money. You can't brush them aside, because they know how to market. They know how to sell.
For a good firm to keep its market share and to make that share grow, it is vital to step up business-generating efforts and professionalize all communications. After all, the investment business is, in large measure, a communications business. You need to begin giving the communications process the same emphasis, and the same conviction, that you now bring to managing money.