Are you fluent in CFO Speak? 5 tips to bring Marketing and Finance Together
We’ve all read about the importance of marketing partnering with sales and IT. But to achieve real success, the marketing/finance bond needs to be just as strong. Marketers need to understand what makes finance tick. And Finance needs to see marketing as a revenue generator, not just a cost center.
Plus, CFOs are often one of the CEO’s most trusted resources, meaning that having finance on your side is one of the best things you can do for your marketing team.
EY research shows that this relationship is growing closer, but not quite close enough.
Their report shows that:
- 54% of the CFOs surveyed say collaboration with the chief marketing officer (CMO) has increased
- 63% of CFOs report increased involvement in marketing
There’s no doubt that this progress is good, but we can do better.
Here are five tips that will get you and your CFO on the same page:
- Build a collaborative relationship – Get to know your CFO or finance person right away. Let him or her see that you take your marketing budget seriously and that ROI is top of mind. If you’re assigned a partner from finance, treat him or her like an extension of your team and make sure they’re included in relevant budget meetings.
- Manage your budget like a hawk – Want to earn the trust of your CFO immediately? Watch your budget closely. Marketing tends to have more invoices than most other departments combined! Talk about making a CFO nervous, right? And, you would be surprised how many marketing departments can’t instantly report on their budget status. It’s important to reconcile your budget every two weeks. You’ll be ahead of the game when the CFO comes to you asking for sunk costs, what’s committed and potential savings opportunities. Here’s a simple budget tracker that will help you do just that.
- Connect spend to revenue – Or at least pipeline. CFOs don’t care about the open rate on your last email or how many webinar attendees you had last month. A CFO wants to see a connection between your activities and the bottom line. If you can’t track pipeline development to marketing activities, explain how the metrics you’re tracking will lead to pipeline until you get the necessary infrastructure in place. Read my post on teaching marketing to speak the language of business for more on this.
- Be transparent but not loose lipped – Share what your team is doing on a high level, but don’t get lost in the weeds. Over sharing the details about branding guidelines, email results and SEO optimization will blur the story you want to tell about how marketing delivers revenue. Their expertise is in measuring revenue, so talk ROI and pipeline.
- Get out the crystal ball – Forecasting is your friend. CFOs need to know what lies ahead. How will your campaigns pay off beyond this quarter? Have open discussions about how your marketing will generate revenue and when. Forecasting is advanced for most marketing departments, so make sure you’re building out the systems necessary to track your current activities, giving you the ability to have predictive revenue impact in the future. Revenate Marketing has a track record of building out forecasting models for marketing departments. Contact us to find out more about building models (links to contact form).
You’re not alone
Jim Meier, an executive at MillerCoors, is an expert on getting marketing and finance to work together. He has written about the challenges along the way. He said that, “The portrayal of marketers through the eyes of finance people is amusing, if sadly true. Marketing is seen as being “..fraught with subjectivity, murkiness, and fluffiness”. In return finance people are seen as having a “lack of understanding of what truly matters” (Meier, 2016).
After outlining these problems, Meier explains what MillerCoors did to bring marketing and finance together. They tried to highlight intangible assets and educate the finance staff on the rest of the organization. They also seeded finance people throughout the organization so that their perspective grew beyond their number-focused lens.
Marketing + Finance = perfect together
When a marketing organization is focused on revenue marketing, you’ll find the CMO and the CFO speaking the same language.
CFO speak is easier than you think! Once you implement these tips, you and your CFO will begin a relationship that bears fruit for your entire organization.
Good luck and let me know how these tips work for you.