In the ever-evolving business landscape, the relationship between marketing and finance is crucial. While they may have traditionally been seen to operate in different spheres, they are both ultimately working towards the same goal – and that is growing the business.
Yet there is often still a divide between the two. Marketing may feel like finance doesn’t understand the nuances in its strategies and the potential of its technology. Finance, on the other hand, might think that marketing is focussed on the wrong metrics – those that fail to demonstrate ROI and value creation – and therefore is not managing its budgets responsibly. This creates a tension that is holding both parties back.
To achieve success, we need to find a common ground and align our strategies. Marketers have more tools than ever to help provide the insight their finance team needs for reporting, budgeting, and forecasting, and finance can support marketing by further demonstrating the impact of their campaigns on business performance. It is all simply a matter of collaboration.
Speaking the CFO’s language
Communication is key to any relationship, and the partnership between marketing and finance is no different. As the marketer’s toolbox continues to grow and they have access to increasingly detailed analytics, it is crucial that other departments are kept up to date with marketing activities and how these will impact the business.
When sharing this information with finance, it needs to be conveyed in a way that aligns with the team’s objectives. This means moving away from qualitative brand metrics, and instead presenting quantifiable data that connects marketing activities to financial outcomes and shareholder value.
With the sophisticated tools marketers now have available to them, it has become far easier to depict the customer journey and accurately demonstrate the success of a campaign. Much of the insights gained can be used to drive future strategies, however, to secure buy-in and budget from the CFO, there needs to be a focus on the key financial drivers, such as customer acquisition costs, customer loyalty, lifetime value and retention.
Getting the tech team involved
There is some very exciting technology available to marketing teams at the moment and as the capabilities of AI continue to unravel, there will no doubt be more outstanding tech to come. New technologies, however, come at a price, and for finance teams to have confidence in such an investment, they need to see evidence of the benefits it will bring.
Any proposal for a new piece of technology also needs to be quantifiable, with a clear business case tying it to ROI. To achieve this, marketers should collaborate cross-functionally with tech teams to understand and effectively communicate exactly what is expected from a proposed solution; not only highlighting how it will contribute to the brand’s success or drive efficiency, but also proving it is practical, technically sound, and can scale within the company’s existing ecosystem.
CFOs, for their part, can help by aligning on testing and experimenting with new tech. Though a clear business case should be presented first, in many cases, the true impact of a new solution won’t be seen until it is used. It is wise to undertake a proof of concept, and/or a trial period depending on the tech, to help validate key assumptions and measurable impact prior to further commitments. Business leaders from all departments, including the CMO, CFO and CTO, should work together and set goals for implementing pilot programs for new technology; supporting additional funding by testing it on a smaller scale and providing concrete evidence of its impact and effectiveness.
Promoting a culture of collaboration
Ultimately, the best way to build and maintain a healthy relationship between marketing and finance is to encourage on-going collaboration. This shouldn’t be limited to quarterly planning meetings; it should be an integral part of day-to-day operations.
Running regular workshops with both the marketing and finance teams is a good starting point for this. Both teams can use these sessions to openly discuss their visions, strategies and concerns, with scenario planning and forecasting to help determine the potential impact of various marketing strategies on the company’s finances.
Additionally, establishing congruent goals is another important element of bringing the two teams together to drive overall business success. Shared goals can be used to work towards common outcomes, encouraging teamwork and removing the likelihood of departmental silos. They will also lead to more regular, open communication between finance and marketing, helping to further strengthen their relationship.
A united approach to marketing and finance
Simply put, the solution to building and maintaining a healthy relationship between marketing and finance is communication. The CFO is far more likely to endorse budgets for a campaign or a new technology if they can see a tangible impact, so the focus needs to be on presenting results and business cases using metrics that showcase outcomes such as better website conversion rates, higher quality of leads generated, lower customer acquisition costs, improved customer retention, cost efficiencies and revenue growth.
Doing this can result in a formidable alliance between both teams – one that is clear on goals, aligned on how to achieve them, and helps everyone involved to better understand the impact, success, and opportunities.
By Greg Dos Santos, CFO, Incubeta Americas