Turn the clock forward. You’re ready to retire after years of hard but enriching work. At the top of your field, you’ve basked in international acclaim. The send-off parties are heartfelt and uplifting. So many you’ve touched. So many you’ve made stronger – so many rich. Reassured by your many investments, you welcome the first night of unencumbered sleep in decades.
Unfortunately, you sleep fitfully and wake with a start, a foul taste in your mouth. You’re face-down in an oily side-street, with home, family, friends and co-workers nowhere in sight. The once-fine threads on your back are soiled beyond recognition. You anxiously rub your eyes, hoping to make it go away. But it doesn’t. Something went wrong.
Melodramatic though it is, this story sounds uncomfortably like the current and projected reality of the blockbuster therapies now caught in the near-perfect retirement storm of ageing and payer reform. Confronted by generic competition and ever-increasing pricing pressures, these foundational assets face a revenue decline that is as awe-inspiring for its rapidity as it is for its volume.
Today almost all of our clients are grappling with the challenge of maximising residual value efficiently in the face of inevitable decline. As the cliff approaches, manufacturing is retooled, mid-managers re-assigned, personal sales cut to a trickle and investor expectations managed. And, as with sales, the marketing budget is one of the first in line for the chopping block.
Sadly, the execution of these cuts only speeds the decline of what we can call ‘non-compound’ asset value.
Extending the life of brand assets
Customer-facing brand value can be seen as emanating from three components – the value of the brand itself, the value of the supporting services that the brand provides and the market value of the underlying compound.
Prior to expiry, component value cannot be easily untangled. After expiry, the market value of the now-generic compound is thrown into sharp relief. And the residual value of non-compound assets, including confidence and preference inspired by the brand and its services, inevitably dwindles as support is withdrawn.
Although digital miracles can be worked in a short period of time, efficiency is mainly achieved through foresight
Future-minded brand managers have begun to harness the power of digital to cost-effectively extend the life of brand assets, and plan accordingly. It is now widely understood that a digital brand platform tailored to the multi-channel needs of customers is one of the best tools we have to extend brand asset value and access.
What is grasped less commonly is the need for a multi-year migration plan that efficiently funds and enacts the activities needed to ensure success, from customer insight confirmation to operational modelling and technical development. Although digital miracles can be worked in a short period of time, efficiency is mainly achieved through foresight.
The comparison with personal retirement is, again, surprisingly apt. The brand, or portfolio of brands, that hopes to extend and maximise asset value in ‘low-cost-to-serve’ digital channels must, like most of us, plan well in advance for the twilight years.
