Most B2B organizations have power centralized in either the product, sales or finance/operations functions. This blog post (my third in this series) looks at organizations where the historical power base has been around the finance function. CFOs may have historical biases regarding marketing as a cost center supporting the sales and product functions. If the CFO doesn’t view marketing investments as revenue and profit generating, he or she may raid the marketing budget as a discretionary slush fund to compensate for performance shortfalls or other strategic needs. If you or your marketing team ever feel resistance from or over-scrutinized by the finance function, read on about how to transform marketing in finance-led environments.
The key focus in finance-led organizations is on profitable revenue growth, expense control, process efficiency and leaner internal staffs. There might be a cadence of spending reviews and a justification process for marketing expenditures. CMOs who are leading marketing transformations must carefully consider any biases about marketing and partner with the CFO to improve cross-functional communications and alignment.
Typical transformations in finance-led organizations include CMOs repositioning marketing to become more revenue-generating, operationally efficient and customer-centric. To drive change, CMOs must engage CFOs as a business partner, deploying the following strategies:
- Change the perception of marketing. CMOs must reposition marketing by presenting a strategic planning agenda that drives corporate results through cross-functional alignment. Educate CFOs on the significant changes in modern B2B marketing, such as digital technology enabling monitoring of many customer interactions and lifetime value. CMOs should clearly communicate a data-driven, process management and results-oriented focus aligned to shared corporate goals to change dated perceptions of marketing.
- Speak a common business language. CFOs don’t really care about marketing tactics or how busy marketing is. What they do care about are business results such as revenue, profit, expenses, risk, customer lifetime value and valuations. CMOs must learn the language and shared metrics of business, and be well versed in communicating how marketing investments and processes are tied to producing real business impacts.
- Co-create a marketing executive dashboard. It’s smart for CMOs to partner with their CFO to jointly create a marketing dashboard aligning to key corporate objectives. Some tips for creating a marketing dashboard for C-suite and board consumption include using the SiriusDecisions Metrics Spectrum; this tracks not only activities (the most commonly reported marketing metric), but also resultant output and impact metrics and areas to gauge readiness. CMOs should also broaden KPIs to marketing campaign program areas of reputation, demand creation, sales enablement and market intelligence. The dashboard should be decision-oriented and provide transparent visibility into marketing successes, challenges and support needs.
- Solicit ongoing collaboration. CMOs should schedule regular meetings with CFOs to discuss changing business priorities and key initiatives and brainstorm potential growth strategies according to marketing’s knowledge of markets and buyers. Invite a member of the CFO’s staff to marketing planning meetings and encourage marketing and finance staffs to model and monitor the performance of key marketing campaigns and initiatives.
- Be a general manager. CFOs appreciate CMOs who are general managers – applying strategic analysis, metrics and a process management view to marketing priorities and initiatives. Countless marketing leaders have asked for more budget without first demonstrating a competent stewardship of corporate budgets. CMOs should engender proactive management of budgets, looking for opportunities to improve operational efficiency through agency consolidation, content audits and process improvements.
Today’s CMOs have a golden opportunity to be strategic growth and operations leaders and help drive corporate growth, efficient and profitable processes, cross-functional alignment and excellent customer experiences. Strong CMO/CFO relationships significantly benefit overall C-suite alignment and are well worth the investment in finance-led and all organizations. CFOs benefit through improved understanding of a key function that drives growth, customer relationships, and corporate valuations. The CMO can leverage the relationship to reposition marketing as a strategic investment at C-suite and board meetings with the CFO as a key marketing partner.
Read the first two posts in Alan’s blog series: