It's Time For The CMO And CFO To Get Connected: BFFs Of The C-Suite
Today's executives know they need to be collaborating more. This is especially true for the leaders of marketing and finance, traditionally the odd couple of the C-suite. The CFO wants cold, hard results: revenue predictability, cost discipline and measurable ROI. The CMO also prizes results, but also has to be the "voice of the customer," relying on both quantitative and qualitative metrics. With the rise of data-driven marketing, what better time for CMOs to become BFFs with finance and make the CFO your most important partnership to demonstrate the business impact of effective marketing.
In a new Forrester survey commissioned by Neustar of 190 marketing and finance decision makers, more than three out of four respondents said it was critically important or very important for marketing and finance to be aligned on business objectives, including revenue growth and profit margins. Yet only 15 percent of executives said their marketing and finance teams work collaboratively toward shared goals. And just 36 percent said that KPIs for the divisions are well-connected.
So how to address this disconnect and go from odd couple to power couple? With data, of course.
The Heart of the Disconnect
CMOs, you're not imagining things—finance really doesn't understand what you do. The Neustar/Forrester survey shows that CFOs believe marketing's primary job is customer acquisition. Needless to say, marketing leaders see their impact as much broader. Certainly they agree on the importance of acquisition, but that was third on their list behind customer profitability and value and the ability to generate incremental revenue.
Similarly, marketing and finance are not on the same page regarding marketing's contribution to corporate objectives. The survey shows that marketing executives still believe that they're seen as a cost center instead of a profit center. This lack of clarity can manifest itself in marketing metrics that don't make the case clearly to CFOs.
For example, marketers in the survey said their department's success should be measured by revenue and customer lifetime value. Finance execs, meanwhile, indicated the top marketing metrics they use are brand awareness (or equity lift) and incremental revenue.
CMOs need to identify the right data to reveal their full value. Don't let your KPIs get lost in translation with finance.
Questions for the CFO
So how do you start speaking the same language? As strategic planning and marketing budgets are being set for 2017, it's time for marketers to open up the lines of communication with their new BFFs to set the stage for more effective, collaborative decisions. Here are some questions to ask your finance partners:
Where do you see marketing making the biggest impact in 2017? Get past the cost center/profit center disconnect and identify the role marketing should play in overall corporate success. Do you understand how marketing flows through the income statement, balance sheet and cash flow statement?
What are the crucial KPIs we should track and report? Advanced analytics (like Neustar MarketShare) are just starting to revolutionize marketing's role. But for your data to make the business case, it has to be the right data for both marketing and finance. Partner with your finance team to understand the customer lifecycle from the CFO's perspective. Identify the metrics they need to show to investors. Proactively collaborate with finance on the tools and technology to accurately measure marketing's contribution and ensure it plugs into finance's tools and systems. Move beyond media metrics like clicks and impressions to the business metrics that matter like cases shipped or same-store sales.
How often should we meet to review marketing performance? Real-time results require more frequent communication and collaboration. It's not just measuring success but nurturing it. Every day.
Ultimately, it comes down to the human element—your personal connection with the finance team. If the CMO-CFO relationship isn't your most important relationship, it will be soon. By using the same language, metrics and data, you just might be at the beginning of a beautiful friendship.