Five Critical Steps To Ensuring Finance’s Support Of Your Budget
By Laura Patterson, President at VisionEdge Marketing
Speak the Right Language to Gain Your CFO's Support
Collaboration is Critical to Marketing's Success
To respond to today's fast-changing market environment, organizations need high levels of collaboration and trust between finance and marketing With the CFO and the CMO both in pursuit of growth, it will be imperative for marketers and finance to establish high levels of collaboration and trust. Marketers can take the lead by improving their ability to "speak the business." How?
1. Start with alignment. Having a clear line of sight between marketing initiatives and the business enables marketers to make both strategic and tactical decisions regarding customers, channels, touch points, and content investments. Alignment is the gateway to understanding what data you will need, what analytics to apply, and what metrics need to populate your dashboard. The key is for marketing and finance to work together to define performance metrics that contribute to the enterprise's strategic objectives.
2. Select relevant metrics. A study by CFO.com found that CMOs report sharing marketing information with their CFOs than CFOs report receiving. In that same study, most CFOs believed that marketing could have a positive impact on profitability but 40% of them didn't know if CMOs were even trying to do so. This gap can be closed by picking t metrics that enable you to know what is and isn't working and that demonstrate Marketing's value to the business. You want metrics that help you make investment decisions and appropriate course corrections; not metrics that are easy to collect or "cool."
3. Build business acumen. Marketers with business acumen understand that they are they are using company funds to make investments on behalf of the company. Best-in-class marketers build business acumen and customer intelligence so they can create value for customers and the company. Think beyond this quarter's "leads" or this year's integrated marketing campaigns and content. Understand your customers' journey and help your company validate, penetrate, and dominate markets.
4. Embrace data, analytics, and modeling to facilitate market, customer, and product innovation, and competitive move decisions. The explosion of big data and advanced analytics creates a daunting task for CMOs to collect, manage, and turn data into meaningful intelligence. It behooves Marketing to work closely with CFOs who are now playing a much larger role ensuring that the structures and investments are in place to maximize the organization's enterprise-wide analytics capability.
5. Take a portfolio management approach. Most CFOs' understand the concept of portfolio management. Marketers are in essence portfolio managers. Your portfolio is comprised of a mix of emerging customers and markets, and goals such as retaining and/or profitably growing a set of customers and markets. Build a marketing plan that represents this portfolio mix and how you are allocating the funds across each component. Clarify how the investments are intended to contribute to the business, and then develop a dashboard that monitors and communicates marketing's portfolio investment performance.
Forging an explicit collaborative alliance with finance is critical to Marketing's success. Finance is not an adversary. Seek to create an ongoing collaborative relationship with the CFO and the finance team.
Laura Patterson is a proven marketing practitioner, respected consultant and dynamic speaker. She is known for her practical, no-nonsense approach to proving and improving the value of marketing. Inventive and engaging, Laura quickly gets to the heart of the matter to provide actionable recommendations and solutions.More from Laura Patterson