Better together: the THREE steps for CMOs to become a finance ally

Better together: the THREE steps for CMOs to become a finance ally

Communications are now more critical than ever before – whether it’s rallying employee engagement as the workforce continues to work remotely, garnering shareholder trust or raising awareness among customers for new opportunities. This change has been especially noticeable internally, with perception amongst stakeholders and colleagues flying up the list of C-suite priorities over the past year as leaders deal with the pressures of the pandemic.

As budget restrictions and disruption to long-term strategies continue, nurturing relationships with their fellow leaders will be essential for CMOs to meet their goals. This is particularly the case with those who have the power to either help or hinder marketing activities – namely, the CFO.

The CFO-CMO relationship is one of polar opposites, with the logical, methodical left-brain on one side, and the creative right-brain on the other. Whilst the finance function exists off of concrete facts, marketing and communications are, in many ways, intangible and objective. This makes effective collaboration between the two a complex task, and one that many struggle to get quite right.

However, with the CMO increasingly taking a seat at the C-suite table, building a mutually beneficial relationship between these business functions is essential to secure communications investments and to prove marketing is an ROI engine for the wider company.

To build strong, valuable relationships with finance leadership, there are a few key steps marketers can take:

Understand your audience

Any effective relationship starts with good communication. Whilst this may seem like a walk in the park for marketers, who are valued on their ability to communicate, it’s surprising how often CMOs fall at this primary hurdle. For example, whilst other business functions, such as R&D, HR and even Sales to some extent, may be receptive to glossy and out-of-the-box marketing ideas, this simply isn’t what drives the finance process. Conveying your success in a way that’s appreciated and easily digested is key to rallying appreciation and perceived value for your team.

In particular, CMOs must show that their current resources are used effectively, using relevant KPIs and analytics to measure success to prove that the age-old ‘50% of your marketing spend is a waste’ doesn’t have to be true. Whilst ‘brand awareness’ and ‘positioning campaigns’ may well be valuable, their subjectivity can be a red flag to finance leaders. A smart marketer can often reshape these generic topics and link them directly to tangible commercial activities by repositioning them. For example, instead of a ‘brand-building campaign’, present a ‘lead generation initiative, forecast to produce X’. This linking of communications back to physical, measurable success such as ‘leads generated’ or ‘% growth in sales’ is what will justify marketing investment in the eyes of the CFO.

Get creative with resources

There is a lot of pent-up demand for companies to start reinvesting internally. An astute CMO will recognise this opportunity and can create visibility for themselves and their teams by proactively sharing marketing investment ideas and strategies. This helps to propel the entire organisation forward.

In particular, creative approaches to spending and use of resources are increasingly sought after.

Gone are the days of open budgets and unlimited funds, as many companies have rightfully entered a defensive economic model.

In this way, budget management is more relevant than ever for a marketing leader’s skillset, and for them to become a genuine ally of the finance team. The CFO’s office will be under extreme pressure to streamline costs as we enter recovery mode, so having a communications team that understands budget management and can convey real ROI as a valuable collaborator will benefit the marketing/finance alliance.

In particular, the growing gig economy poses a great opportunity for CMOs to make their available resources go further. Paying talent can account for up to 70% of total business costs, so taking a creative approach to team structures, and achieving the best mix of in-house team members and freelancers or third-party services, will resonate with the CFO. It’s important to remember that the use of agencies and freelancers isn’t simply a cost-cutting exercise – it can improve your company’s efficiency and scalability. Tapping into as much of the gig economy as possible is a great way to scale teams up and down during dynamic times, but also around seasonal phases where workloads and resource demands can fluctuate greatly.

Push in the same direction

It’s a common misconception that the communications department wants to throw money in all directions, whilst the finance team grips the creative budget with an iron fist. In reality, both teams, and their leaders, share the end-goal of driving growth for the business. CFOs do have the will to invest in brand growth and customer value, through all the great things a top-notch marketing team can do. The caveat is convincing them that they will see this ROI.

The CMO therefore needs to be a visionary partner to the CFO, to provide the kind of creative and innovative communications that the finance function can justify and support. In short, effective CMOs stay focused on how their marketing organisation is contributing to overall business goals – rather than getting department tunnel-vision.

If the pandemic has taught us anything, it is the importance of cooperation, especially between contrasting, and often unexpected, groups. Moving into this new era of business, and a state of economic recovery, no alliance within the c-suite will be more vital for CMOs than that with the CFO. Successfully building a relationship where both parties understand and have confidence in one another will be the key driver of business growth.