Within the C-Suite exist two of the great pillars of corporate success—the CFO (Chief Financial Officer) and the CMO (Chief Marketing Officer). Traditionally the CFO has been perceived as the somewhat more conservative ‘older brother’ to his counterpart the CMO; the more creative and eccentric one of the ‘family’. At times diametrically opposed in their thought processes and strategies, they have nonetheless been increasingly compelled to find their common ground for collaboration within organisations (albeit somewhat begrudgingly at times), and in doing so we are perhaps only just beginning to see the fruits of this collaborative potential.
The digital era has brought a multitude of shifts in company culture, and this somewhat polarised and previously untapped yet vital relationship between the CFO and the CMO has been thrust into a dynamic consortium. According to a survey conducted EY.com, the majority (54%) of CFOs report that collaboration with the CMO has increased. Could this have been prompted by the continual influx of quantifiable data and digital analytics, which is increasing driving corporate metrics? Very likely.
CFOs are results driven in terms of ROI and this can be difficult to calculate for more intangible marketing concepts such as brand equity and consumer goodwill, concepts which are highly valued by marketers. Becoming more supportive of concepts that are difficult to quantify is an essential quality that CFOs must cultivate in order to achieve collaborative partnership with their marketing counterparts. Similarly, CMOs must foster the ability to work with CFOs to provide detailed measurements of ROI in their marketing activities, and they must be open to scrutinising analytics through the lens of financial planning activities.
The most exciting aspect of this fruitful alliance, is that the companies which demonstrate the greatest teamwork between these executives are achieving a competitive advantage within the marketplace and forging market leaders. There are still barriers to overcome however, such as bridging the cultural divide between the functionality of each; aligning processes and and KPIs; and ensuring ongoing positive communication between the two. Let’s explore some ways in which the combined powers of this alliance can benefit the organisation and assist in reaching company objectives.
1. Know your customer
‘Many of today’s CFOs are becoming more focused on the front end of the business—on what it takes to better understand the customer in order to increase profitability’ says Mr. Lucker, author of Delivering Analytics: The CFO’s Role in Moving from Customer Analytics Insight to Action. Having an intimate understanding of the drivers behind consumer behaviour is essential to high performance and this kind of understanding cannot be attained through number-crunching alone. This is where the CMO / CFO relationship can be integral as CMOs are trained to develop a deeper understanding of customer bias as well as cultivate foresight into trends. Because these factors are always evolving, the partnership is crucial for organisations to stay ahead of the game and have an edge on their competitors. ‘Using a CRM can shed an enterprise-wide light on marketing activities and how they are relating to sales activities’ says Media Junkies own Sonja Ceri. ‘Marketing automation based on this data is still on the rise and gives insights into each marketing campaign and can even drill down into each individual activity if needed. When the CFO and CMO have their goals aligned and visibility on all activities and measurable outcomes, it is easier to get the sales department on board and aligned as well. Sales and marketing need to be collaborating more effectively to ensure performance growth and hitting financial goals.’
2. Combine forces to measure ROI
CMOs and CFOs are likely to define company metrics in different ways. So unifying this language is a surefire strategy for success. Aligning the way they approach financial data and reporting procedures will ensure that they’re reaching the same conclusions from the subsequent analysis. This is where challenges can arise, when the CFO has a greater leaning towards seeing more hardline & immediate returns, the CMO may have an inclination to invest in less tangible areas such as customer loyalty and brand equity. Both vital company objectives from a marketing perspective but much harder to measure with numbers alone. Having said that, the metrics being used for the marketing activities need to be effectively focused in order to yield the most successful strategies for investment in both the short term and the long term.
3. Define marketing objectives & strategies together
Ensuring a positive flow of communication between these two parties forms a foundation for success, and defining that success is a crucial aspect of the communication process. The vision of success might look very different from marketing to finance, so ensuring that their objectives are aligned is essential for tracking outcomes and setting KPIs. According to Simple HQ, it’s important to ‘keep the number of objectives small (maximum five)’, which enables both teams to measure the outcomes. Involving finances in the planning process, ensures that the vision is anchored in a solid foundation which supports the organisations financial directives at all times. ‘At the start of the strategic alliance is the time to translate financial goals into actionable marketing tactics’ says Sonja Ceri. ‘You can only do marketing if the CFO signs off on it and releases budget. Vice versa, budgets can only sustain if marketing and sales goals can be achieved. This requires regular check-ins to review KPIs, milestones and development in the sales pipeline.’
4. Bridge the cultural divide
Cultural issues between these contrasting forces can pose a bit of an issue in a very tangible sense. Typically, CFOs become nervous around the ebullient nature and intrinsic extroversions of the archetypal marketers approach; preferring a more traditionalist strategy in their decision making. As such, their perspectives can trigger antagonism and conflict in decision making. As with any relationship, a healthy serving of respect for each others viewpoint and the willingness to engage with each others strengths will garner the most productive and fruitful results. Sonja says: ‘As digital marketing becomes easier to measure and manage, and therefore its results become more tangible, the CFO and CMO start to speak similar languages. Data analysis and spreadsheet are the foundation of their relationship, opposed to fluffy documents and marketing buzz chatter. Both, CMO and CFO need to be analytical, strategic and most importantly, live and breath the company’s vision.’
As digital advances continue to influence and inspire change in the corporate sector, we will undoubtedly see more of these types of shifts occurring. These changes can bring big challenges but also opportunities for company growth and a competitive edge, when harnessed effectively.