CMO: Do You Speak CFO?
Marketing badly wants a seat at the strategy table, but at many companies it's the CFO who represents major marketing budgetary and strategy decisions in the C-Suite. And that can be a problem because CFOs aren't marketers.
For many CFOs marketing is the nebulous part of business. On the surface, it doesn't appear to mesh with their traditional short-term focus on improving productivity and reducing costs. The CFO is charged with prioritizing budgetary resources, balancing the needs of departments across the company, including marketing.
But is marketing effectively making its case?
A recent study by Marketing Management Analytics (MMA), found that just 7 percent of finance executives are satisfied with their company's ability to measure marketing ROI. In the same study, only 23 percent of marketing executives had confidence in their ability to measure returns, still not exactly a ringing endorsement.
No cooperation or agreement on metrics
Many CFOs acknowledge that market share, customer satisfaction, audience cost-per-thousand, and brand awareness are useful; but no single category can show how an entire chain of marketing events eventually leads to a sale or new business. It's time for the CMO and the CFO to start working together. According to the same MMA study, fewer than 20 percent of respondents say finance and marketing work in "Full Cooperation," the majority reporting limited or even antagonistic tension over budget and strategy.
Marketers need to dust off their accounting books and make the first overture by bringing questions to the CFO for his or her input. Developing a framework for marketing metrics and standards should help CFOs favorably view marketing activity.
Speak the language of the CFO
Do you speak CFO? You're going to need to if you want to develop a dashboard for performance that will satisfy a CFO. It's often the same language as the CEO who typically rises up from the world of finance and operations as well.
Start by pretending you report to the CFO. What do they care about? Cash flow, revenue growth, and the long-term value of the company. What do they expect in terms of performance benchmarks? Increasing shareholder value, market capitalization, and return on assets.
Marketing people don't talk that way. They use their own jargon-terms like customer awareness or market share. Step back and look at bringing a results-oriented view to discussions with the C-Suite audience. When you tie your marketing programs to revenue generation and customer retention, you're beginning to address the issues of cause and effect. Take it further by connecting the sales pipeline to the bottom line. Suddenly you're talking about ideas that your CFO can get behind.
CFOs are becoming more strategic
And cheer up. In many companies the CFO has become the de facto second-in-command, responsible for crafting a strategic plan with the CEO to build long-term shareholder value. Since they help to articulate the CEO's vision, they need to understand how marketing can help the company reach their growth goals. The CFO might even be able to help you understand how marketing might better serve to achieve that vision.
CFOs don't want to be seen as bean counters. So don't treat them that way. Have honest, direct conversations about what you expect to happen, and what you need for him or her to do. Take the mystery out of marketing. Make this an equal relationship, which requires cooperation to work.
So before you start bitching about your CFO cutting your budget, maybe it's time you got to know him or her. Feel their pain. Because if you dig deep enough, you'll probably find you both have the same objectives and goals (and you should) -- you just didn't know it.
No cooperation or agreement on metrics
Many CFOs acknowledge that market share, customer satisfaction, audience cost-per-thousand, and brand awareness are useful; but no single category can show how an entire chain of marketing events eventually leads to a sale or new business. It's time for the CMO and the CFO to start working together. According to the same MMA study, fewer than 20 percent of respondents say finance and marketing work in "Full Cooperation," the majority reporting limited or even antagonistic tension over budget and strategy.
Marketers need to dust off their accounting books and make the first overture by bringing questions to the CFO for his or her input. Developing a framework for marketing metrics and standards should help CFOs favorably view marketing activity.
Speak the language of the CFO
Do you speak CFO? You're going to need to if you want to develop a dashboard for performance that will satisfy a CFO. It's often the same language as the CEO who typically rises up from the world of finance and operations as well.
Start by pretending you report to the CFO. What do they care about? Cash flow, revenue growth, and the long-term value of the company. What do they expect in terms of performance benchmarks? Increasing shareholder value, market capitalization, and return on assets.
Marketing people don't talk that way. They use their own jargon-terms like customer awareness or market share. Step back and look at bringing a results-oriented view to discussions with the C-Suite audience. When you tie your marketing programs to revenue generation and customer retention, you're beginning to address the issues of cause and effect. Take it further by connecting the sales pipeline to the bottom line. Suddenly you're talking about ideas that your CFO can get behind.
CFOs are becoming more strategic
And cheer up. In many companies the CFO has become the de facto second-in-command, responsible for crafting a strategic plan with the CEO to build long-term shareholder value. Since they help to articulate the CEO's vision, they need to understand how marketing can help the company reach their growth goals. The CFO might even be able to help you understand how marketing might better serve to achieve that vision.
CFOs don't want to be seen as bean counters. So don't treat them that way. Have honest, direct conversations about what you expect to happen, and what you need for him or her to do. Take the mystery out of marketing. Make this an equal relationship, which requires cooperation to work.
So before you start bitching about your CFO cutting your budget, maybe it's time you got to know him or her. Feel their pain. Because if you dig deep enough, you'll probably find you both have the same objectives and goals (and you should) -- you just didn't know it.
Leave a comment