Today’s digital world has generated opportunities for marketing efforts that would have been unimaginable just a short time ago. Chief marketing officers (CMOs) can understand their customers, track customer engagement, and drive business growth better than they have ever been able to before. They are creating more value for customers by driving smarter acquisitions and connecting marketing with customer experience more effectively.
As a result, CMOs are making bigger, data-driven marketing investments requiring larger budgets to work with. And that means they need to strengthen relationships with chief financial officers (CFOs), the executives who control the checkbooks. CMOs today have to make better business cases that forecast returns on investments in a manner that speaks to CFOs.
In a recent article, Zach Morrison, CEO of Tinuiti, notes that the heads of marketing and finance in today’s organizations need to be on the same page to effectively drive growth. He believes that making progress requires that CFOs understand that marketing can be a growth driver rather than a financial drain and that they are in sync with CMOs.
Chief marketing officers need to make an effort to build a solid relationship with their organizations’ chief financial officers for two significant reasons:
Marketing leaders must educate other senior executives, especially CFOs, about how marketing works and creates value.
In many organizations, the interactions between CMOs and CFOs are typically tense and strained. Frequently, marketers feel unappreciated and misunderstood, while finance people often don’t understand or know how to properly evaluate marketing proposals. Unfortunately, these feelings don’t contribute to a healthy relationship between CMOs and CFOs, which is a problem.
Generally speaking, serving customers is a primary job of CMOs, and understanding costs is a primary job of CFOs. Perhaps the most challenging task for CMOs is determining where to spend marketing dollars and how to translate performance into the ROI metrics that CFOs are looking for.
So, how can CMOs and CFOs create a shared understanding that drives growth?
One potential solution is presented in a report published by the B2B Institute (in association with the Institute of Practitioners in Advertising (IPA) in the UK). The report is based on responses from senior leaders of B2B organizations in the US, Europe, and Asia. At the heart of the report is the VALUE Framework, a guide for CMOs that outlines how to build effective relationships with CFOs and other finance leaders.
The framework consists of five elements:
A strong relationship between the CMO and CFO is one of the most important for senior leaders to develop and nurture. The CMO must generate value and results with the budgeted resources that are allocated and measured by the CFO. Despite that reliance on one another, in many organizations, CMOs and CFOs are not effectively connected. However, with collaboration, good communication, and evidence-based performance analysis, this is a relationship that will drive business growth.
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