NEW FINANCIAL YEAR? Getting your CFO/finance person/department to understand and buy in to your marketing plan
As many of us head into a new FY24/25, I thought I would share my own learning and experiences to help ensure that your activities’ commercial impact is understood and funded accordingly.
Happy new (financial) year almost.
As is typical of March, I am snowed under by year end deadlines, remaining POs and such like. Bottom line I have less time, so this is short(er) and sweet, but some key points to land at this juncture.
A lot has been made of the CFO x CMO relationship, particularly given how the marketing role has kicked itself in the foot in recent years with short-term approaches, losing credibility and confidence at C-level. So here I reflect on my own experiences both in advertiser businesses and agencies, as well as what I have researched and learnt, to land on the 5 key areas where you can’t go far wrong if you bear these in mind…
#FIRST, (where many fall down), get them in conversation/onside early
For real credence in boardroom or with the boss, it is important to give marketing the respect it deserves, and to reaffirm the discipline (when done properly and thoroughly) as a key driver of business objectives and growth. The more prominence and interdisciplinary activity it has, the more seriously it is treated. The 4 Ps impact (reminder, Product, Price, Place, Promotion) are not only important for shortening the odds of success, but affecting change on pricing or product helps finance understand its far reaching impact. As soon as planning for the year ahead starts, demand a seat at that table in advance. Show the commercial impact. Secure the better budget. The alternative is to treat marketing as a latter/bolt on. Something that is perceived as an in:out ROAS/sausage machine of social content and clicks. Which is better?
#2. Marketing language : it is an INVESTMENT not a cost
This is fairly touted as THE advice, but granted it is easier touted than communicated. But like any investment, some things will provide a more immediate return’, e.g. a search ad, and some things take longer e.g. other brand media, or a perhaps the time it takes for a new product or brand identity to take off. Nuance of language matters here too; the word investment typically assumes, in fiscal terms, an assumed return on investment (ROI), But with any investment, or commercial bet, some things don’t pay off, and if they do, it may be over the longer time frame. The key here is to ensure zero confusion between a short and long term business goal mapped to marketing (i.e. Return on Investment long term for company) vs arbitrary campaign measurement KPIs such as ROAS or ‘ROI’ for an ad. Again this reconfirms the importance of the 4 Ps, the investment in Research, NPD and pricing strategies, and within the Promotion P, the short and long term measures are communicated clearly.
#3. Add detail & rationale, being mindful of the discomfort of unknown
The output of marketing may make some analytical number crunchers uncomfortable. Ideas that are often avantgarde and not ‘rational’ can invariably drive the intended outcomes. Ideas that don’t make sense (queue Gorillas playing drums for Cadbury’s, or meerkats for Home insurance) reaffirm any notion of campaign science (there is seldom a reliable predictor of £x in = £y out). Making the random try to make sense isn’t the task here, but to accept the unknowns and frame the random in a controlled way. Test and Learn, utilise past data, an investment of distinctiveness of a brand, driving memory structures and therefore sustained attention. BUT show the breakdown of long term brand work, brand advertising and the shorter term tactical stuff that does indeed generate more immediate ROAS/leads. This is something that marketers need to get better at anyway between agency and brand as well as with each other. But this is critical for the operational/finance chat here, so a great skill to hone all around. Financial people live in the details, give them the details, but as they are cognoscente of bottom line needs, tapping into this wider knowledge and how it impacts business is key. Show the what, the when (important for #4) the how (to a degree) and absolutely the rationale (why). What’s good for the hive is good for the bee!
#4. Budget accordingly, with variance, but not wildly.
We all know the 10-15% either way/contingencies happen and planned in, but say you are to go outside of that (and maybe even smaller margins depending on business) then you’re in trouble. Overspend is of course a bean-counter’s and business health nightmare, but not all CFOs are the same, especially more strategic ones. I’ve seen some be even more pissed off if you way underspend, as that will look like any revenue misses could be linked to that. Do not fall into that trap, especially given the fact this is an investment (don’t underinvest). If you are likely to fall behind, or a big event you budgeted for you pulled out of, or something else, it happens and its fine. But let them know early so budget can be reinvested. Ongoing education of fluctuation of budgets help here too Working example - you have to up your PPC budget to follow on from demand created on a brand campaign you wish to harvest, but more successful than you planned, show and tell, explain need, showcase increasing search trends.
#5. Keep in communication, on the inside and outside.
Whether it be the monthly board meeting, the quarterly check-in, or the weekly coffee, it is important. Internal alignment is 70%+ of your goal here, after all you’re hopefully working towards a shared business goal. But wider market forces and context are good to share too. From competition to regulations, wider insight into numbers will always be welcome. Granted, granular details of changes in cookie law and attribution are as useful to them as calculating amortisation is to you, but most finance leads are cerebral enough to understand the multi-touch nature of the beast.
FINAL THOUGHT : What if you are the small business founder, and both marketeer and financier?
Then this speaks to both disciplines. This is sharpening your multi-tool to ensure that fiscal decisions are made and there is a lens of commercial investment, but at the same time don’t get lost in the Excel spreadsheet, the brand lives in the world etc. Likewise, consistency of ongoing media and ad planning needs to be treated in the lens of the investment you owe to the business.
To close, it may be a comfort to think that underneath the differences, we aren’t all that different after all. The finance director of the Chartered Institute of Marketing Anna D’Souza says…
‘…marketing and finance are actually very similar. While marketers are generally seen as more creative and finance people are generally seen as more logical, we perform very similar processes….when a finance director prepares a forecast they’re using past performance to predict what the future may hold’
Footnote : I typically do a monthly essay ‘rather’ than shorter/bite sized bits and/or more frequent emails (I consider this shorter btw). The monthly cadence is unlikely to change, however if you prefer the shorter emails, let me know, I intend to mix it up anyway, but the feedback of the most important person (you the reader) matters to me.
SA
P.S. Further reading : Boots’ CMO & CFO on how to help finance ‘get’ marketing (Marketing Week)
P.P.S. I really hope you are getting a semblance of value out of this. If so, and you think any other marketer or business owner would, feel free to share/forward this to them. Also, follow me on LinkedIn, The place formerly known as Twitter, (albeit less on socials now), or even my company page. If you want to discuss working together, you need some marketing advice, or simply something I’ve said, drop me a line. Thanks and happy reading/marketing!