By Leigh Dow
Article originally published by Leigh Dow, Identiv VP Global Marketing, via Fast Company.
Chief marketing officers, or CMOs, are becoming data and analytics experts by leveraging complex marketing technology. The role requires marketing leaders to be more proficient with data, helping them understand their consumers, monitor engagement, and drive marketing growth in innovative ways. By connecting the brand with customer experience, CMOs now create more value than ever. At the same time, chief finance officers (CFOs) are deepening the use of analytics to drive business insights.
Often, CMOs need to explain how an investment can take years to materialize rather than a month or a quarter. With both roles becoming more data-driven, marketing and finance can operate in a framework that represents outcomes and demonstrates the return on marketing investment (ROMI) the CFO is looking for. As companies drive more digital transformation, it is imperative marketing and finance work more closely to attract and retain customers and drive growth.
THE NEED FOR A STRONG CMO-CFO RELATIONSHIP
A strong CMO-CFO connection is mutually beneficial. It is a fact: a company’s capability to attract and retain consumers supports business development. A CFO can lean on the knowledge and intuition of their CMO when communicating an expansion, merger, or acquisition story to investors and the board.
The CMO who focuses only on marketing campaigns rather than holistic customer engagement is not a strategic CMO and is not structured to meet the CMO-CFO dynamic essential to driving business value creation. The relationship between CMOs and CFOs is a critical yet often untapped opportunity to unlock new business value and growth. The strategic CMO must work with the CFO to evaluate growth investments and channel opportunities. This means the CMO must understand the financial metrics associated with their marketing strategies and how to capitalize on market opportunities.
HOW YOU CAN ALIGN CMOS AND CFOS IN YOUR ORGANIZATION
Here are a few ways to get both parties on the same wavelength:
1. INCLUDE BOTH IN THE PLANNING PROCESS
If you want to build a solid thought leadership strategy, it is key to ensure your team works together as a unified entity. This means using the abilities of both your CFO and CMO. By introducing collaboration in the planning process, the result will deliver a solid plan with defined outcomes—what success looks like financially.
Include your CFO in the planning of your thought leadership strategy and include your CMO in relevant financial meetings. Enable your CMO to observe where the company’s finances are coming from and identify crucial trends, helping them concentrate their marketing efforts on what is effective and what is not.
Show your CFO your marketing team is focused on spending funds responsibly and intelligently. As part of the thought leadership planning process, the CFO will feel more confident in supporting the funding to get the job done right.
2. FIND YOUR MOM (METRICS THAT MATTER)
Alignment is implausible if your marketing and finance departments have different ideas of what success looks like. Consider setting goal objectives that both CMOs and CFOs agree on, including:
- Conversion rates at every stage of the pipeline.
- Customer acquisition cost.
- Customer lifetime value.
- Value of the opportunities in the pipeline.
- The rate at which prospects are moving through the pipeline.
- Cost per lead, per opportunity, and per closed-won deal.
Building aligned targets is a continuing process. As your company grows and the marketing activities change in response, plan to regularly review metrics. Both parties need an ongoing discussion to ensure they continue to sync up on marketing objectives.
3. USE CONSISTENT LANGUAGE ACROSS DEPARTMENTS
To establish a strong connection between CMOs and CFOs, both individuals need to clearly understand what the other person expects. While CMOs engage with a lot of data, it is not typically the data a CFO is seeking. CMOs often emphasize brand awareness, voice share in the market, or ad impressions; these do not directly translate into monetary impact. CFOs are more interested in capital investment estimations, operating expenses (OPEX), net present values, and a clear outline of any investments’ trade-offs.
Establishing transparency into marketing operations is the starting point for CMOs to help CFOs comprehend where and how the company is gaining or losing value. This also makes budgeting discussions much more prolific. Bringing everybody into line is vital, but it is not essentially stress-free or fast.
REAL VALUE IN THE DIGITAL REALM
The marketing and finance dynamic is crucial to unlocking longstanding value and development in the digital realm. As data-enabled consumer engagement yields more profitable prospects and the shared benefits of a closer working association between the functions become clearer, there is increasing pressure on marketing and finance leaders to work together.
Today, CMOs and CFOs team up often out of necessity. If they can create a more profound strategic connection, they can learn from one another’s individual talents and strengths and drive growth more efficiently. Both parties can explore new opportunities around data-driven marketing, sophisticated views on ROI, and generate better value. In the end, that value is generated through consumers, and as a unit, CFOs and CMOs can be the overseers of the total user experience.