CFOs are a crucial cog in any business. The CEO of a company relies on the CFO to control the financial side of the business and more importantly, to have a good eye on the bottom line. You could consider the CFO as the right-hand man to the CEO.
The CMOs need to build a relationship with the CFO to reach set goals and help improve the bottom line. Most CFOs view marketing as a cost center rather than a strategic investment. It’s up to the CMO to change this perception. How can he do this? By following these 7 top strategies. Let’s explore.
Show management what marketing truly is
As a CMO, you need to understand that the CFO and the rest of the financial department view marketing as a cost center and not an investment. It’s for this reason that marketing budgets tend to get slashed during a company’s crunch period.
A CMO needs to leverage the data they have/obtain during the customer acquisition process. The data needs to show how the marketing department is crucial in not only growing revenue but also meeting the company’s goals. You need the CFO and management team to see the marketing department for what it is; a driver of revenue.
Avoid using buzzwords and soft statistics, show the CFO that the marketing department is crucial in pushing the company forward and meeting objectives. The role of a modern CFO is far wider than what it used to be traditionally.
Constant collaboration is key
There is no better way to build a relationship than to collaborate with a team/person to achieve set goals. As a CMO, you’re losing an opportunity if you’re department is not collaborating with the financial department.
It’s through this collaboration that you’ll get the CFO to see and understand the importance of marketing. Some of the ways you can collaborate with your CFO is by:
- Scheduling monthly meetings with the CFO. In these meetings, you can discuss growth strategies for the business and discuss the changing needs and priorities of the business
- Have a Member of the financial department in marketing meetings. Involving the financial department will allow the CFO to get a peek of what goes on in the marketing department. It’ll also allow them to understand the needs of the department and the role that it plays. If you are not expert in preparing presentations that involve finance insights, use paper writing service like Boom Essays review and essay pro reviews. Also you can use bid4papers review.
- Budget proactively. This is a means of building a solid relationship with the CFO. By budgeting as the needs and priorities of the business changes, you make it easier for the CFO to approve the budget and focus on other more important areas.
- Help them leverage the brand. As a CMO, you understand the brand better than the CFO so you need to have deep insights into the finance aspect as well. If the CFO is responsible for corporate communications/investor relations, help them understand the brand and how they can use it to good effect.
Collaborating with the CFO is always the best way to build a good relationship and allow them to understand the importance of the marketing department in achieving company goals.
Build a relationship of trust with your CFO
As shown in this post from the Harvard Business Review, It’s not always about business. It’s important that as a CMO, you look to build a personal relationship with your CFO. It’s acknowledged that this is not always possible, but you should try it.
You should make it a point to not only talk about business, but personal issues as well. Maybe you both have the same underlying interests/passions. This personal relationship will be of the utmost importance during challenging times.
The market is fast-paced than it ever has been and you need newer skills and tools to be on top of the game. There could be unforeseen issues that occur over the course of the year. The customers can misinterpret the company’s offer. The competitors can make a strategic move against you. By having a relationship and building trust with your CFO, the company can steer well during these fast-paced times.
This is because every department will understand that they are all working towards a unifying goal and doing what’s best for the business. The relationship you build with your CFO will also allow you to leverage their financial expertise in assisting your marketing department to achieve the overall goals.
Involve the CFO in marketing initiatives
Many marketing campaigns tend to look to provide an increase in revenue/higher sales, which is not a bad thing, but most CFOs are looking for an increase in operating margin. So, as visible here, it’s already a disconnect in the two key departments of the company.
There isn’t much overlap in terms of Key Performance Indicators (KPIs) between the two departments. It’s important to involve the CFO in marketing initiatives as it’ll allow for there to be a common objective. You don’t need to involve them in the entire marketing process. Only the early planning stages of the marketing campaign/process is fine.
You as a CMO stand to gain from taking this step. You allow the CFO to understand the importance of these marketing initiatives and how they assist in ensuring proper financial performance. By collaborating with the CFO, the CMO will be able to establish success criteria, sales cost, commissions and more.
Same time, CFO should also show his keen intent to be a part of marketing meetings to get to the core of marketing budgets. By having this conversation, you give yourself a better chance of having a successful marketing campaign in the right budget.
It also ensures that the results of the marketing campaign/initiative are clear for all and not ambiguous and to ensure there is no misunderstanding between the CMO and CFO.
Think like a General Manager
Many CMOs think of themselves as marketing guys only in charge of making sure that marketing meets its goals. This is not a bad thing, except the benefits of marketing are not always seen by the rest of the organization. The CFO doesn’t quite understand the importance of marketing and why they need to increase your marketing budget.
To counter this, you need to start thinking like a General manager. GMs tend to be more strategic in their analysis, apply a process-based view and use metrics to show performance.
The same process should be applied to your marketing initiatives. Have some key metrics laid out, have the results be clear and relatable to company goals (you can get this by collaborating with the CFO).
Outline the marketing initiatives into different processes and think about the underlying strategy of the marketing campaign. By doing this, you’ll also be able to showcase the returns of the budget to the CFO. You’ll be able to show the CFO how important the budget is to the growth of the company.
A marketing dashboard can go a long way
You can leverage online tools or use an excel sheet to create a marketing dashboard. The dashboard aims to harmonize the marketing efforts being undertaken. It gives the rest of the management team, a visualization of the impact of marketing.
The marketing dashboard will showcase the key metrics that are important in helping the business achieve its short term and long-term goals.
The best dashboard is one made in collaboration with the CFO. Pertinent to the making of this dashboard is a common language/understanding between the marketing side of the business and the financial side of the business.
It’s only through this understanding that the Key Performance Indicators (KPIs) will be identified. On top of that, you get a dashboard that both the finance department and the marketing department can get behind. This gives even more trust to the data you provide to the management team.
Talk about all the business risks
How many times do we here CMOs complaining of losing business because the company didn’t act quickly enough or didn’t capitalize on a marketing opportunity? There are plenty of risks involved in running a business.
One common risk that many CMOs are aware of in today’s digital age is the risk of not acting. Many startup disruptors in the market are willing to take risks and turn an industry on its head. Many of the big giants don’t see them coming and even if they do. They are slow to move to counter them.
CMOs tend to be more aware of the risk of not acting more than CFOs. On the other hand, CFOs are more adept to risk assessment tools and assessing the variety of operational risks that a business can encounter. A collaboration in this respect will provide huge gains for the business.
The CFO can get to properly assess the risk of not acting with the help of the CMO. On the other side, the CMO gets to understand the marketing risks and use of risk assessment tools with the help of the CFO. It’s a win for everyone as the company can make more effective decisions in both the short and long run.
In the age of analytics and big data, it’s important that the leadership team comes together to help achieve company goals. A growth in the relationship between CFO and CMO will benefit both parties.
The CFO will better understand the key element that affects a company’s bottom line, which is sales. On the other hand, the CMO will benefit from increased investment due to the change in perception of the marketing department as a profit center. With this collaboration, greater growth can be achieved in the business.
Lilian Chifley is a famous freelance author and editor and her main interest areas are marketing and finance. She works as a management consultant for big corporations across the globe and also works as a writing coach for essay writing services and premier essay service.