Marketing is at an inflection point in terms of where it sits within an organization's structure. There are many CMOs and VPs of Marketing who report up to the CFO or even Operations, and that is a really interesting position to be in. Marketing has very different tactical goals than finance or ops, though they are all working toward the same business goals.
Part of the reason for the change is that CFOs have an increased focus on measurement and profitability. That relationship between the CFO and a marketing leader is really important. Building that relationship needs to start long before the budget process, as more and more of our clients are using rolling forecasting budgets that are happening on a monthly or quarterly basis.
I would argue that, other than your IT department, your CFO is the next most important relationship you can have in your organization. Communicating clearly with your CFO is vital to the success of your marketing efforts and the business. That starts with building a strong relationship.
The Right Approach to a CFO Relationship
It starts like anything, with positive interactions. CMOs and CFOs may have different roles, but you’re on the same team and ideally working toward the same outcomes. CFOs deal in numbers, facts, black and white scenarios, and everything has to pencil out at the end of the day. If marketing is an unknown, then the CFO will lead, seeing it as a risk. Taking the time to understand what they value and where they’re coming from is a good first step to ongoing support.
It’s your responsibility to demystify marketing. Marketing leaders need to be able to tell the story of what media and other marketing tactics are being used for. Prove it’s an investment and not just an expense. CFOs need business activities to come out positive. Show how marketing makes that happen.
Be prepared for the tough conversations, but don’t go in like an adversary or on your heels. Be confident, showing transparency and accountability.
What to Be Prepared With?
I’ve found, from conversations with CFOs, that the questions they are asking are tied to numbers because that’s their world, but they also want to understand.
You have to know how to speak their language. Don’t go in with your litany of marketing acronyms, but be prepared to use theirs: ROI, LTV, CAC. Know what KPIs are important to them.
If discussing pre-launch plans, share your KPIs, explain how long it will take to see results, and how you plan to measure success. Start with your priority plan, but know the other plan options you considered. Be prepared to share what they were and why you chose not to go that direction. This will signal a well thought out and strategic approach.
During the conversation, be sure not to oversell. Be realistic, or it will come back to bite you later. Take the opportunity to outline what can be measured and what can’t, and why. You can have data that isn’t necessarily tied to a direct monetary or growth figure if you can take ownership of it and explain what it means.
Show where there is still value in less tangible areas, like the value of brand and performance running together for long-term goals. Marketing leaders understand brand, how brand is measured, and the impact of brand. These are data points that are not necessarily tied to revenue the same way that performance media is. The head of marketing needs to be able to communicate value to executive leadership in a way they can see the value, even when it doesn’t produce immediate results.
When presenting post-campaign, here are a few areas to cover.
- Lead with the growth story: the WHY, goals, results, and ROI.
- How do your goals tie to overall business goals?
- If all the results are not positive, explain why, what was learned, and what the plan is going forward.
- Consider sharing other indirect metrics that prove value, like improved LTV, reduced CAC, or increased average order value.
- If a campaign underperformed, know why and what will be done about it. If you plan to run it again, know why, what you’ll adjust, and the new expected outcomes.
Marketing leaders’ roles are changing. Part of that change may mean having less of a seat at the executive table and a greater need to sell marketing’s value to the business. While it may appear that you have less control, you should always have influence.
That influence comes from building positive relationships, confidence in the value of marketing to the business, and collaborating with transparency and accountability. Being a good storyteller and being able to speak others’ language are also valuable traits. Keep this in mind the next time you find time on your calendar for a one-on-one with your CFO. The same goes for your CEO.
