That, of course, involves CFO approval, which is far from automatic.
But first the good news: Both parties recognize the need to strengthen their alliance. According to an EY survey of more than 300 marketing and finance leaders, 90% of respondents said they believe marketing and finance need to work more closely together on digital transformation. And 83% of respondents said their companies’ marketing efforts would be more effective if marketing and finance forged a closer working relationship.
However, the survey also highlighted some areas where the two functions weren’t quite on the same page. For example, where CFOs said they tend to center using stronger insights form data to drive growth (43% of CFOs vs. 39% of CMOs), CMOs said they prioritize retaining and improving existing customer relationships (45% of CMOs vs. 38% of CFOs). Similarly, 34% of CMOs and 25% of CFOs said they fail to see eye to eye on target-setting for the marketing function, while 35% of CMOs and 27% of CFOs said they disagree about the organization’s approach to regulation and compliance, particularly when it comes to the privacy implications of customer data.
There is also the matter of how CMOs and CFOs make decisions. In comments to EY, CFOs said they have a tendency to make investment decisions based on past predictors, while CMOs said they are more apt to make decisions that have little historical precedent and may not produce tangible results for another three to five years.
3 Ways To Connect
The benefits of a solid CMO-CFO alignment are clear: “They can learn from each other’s respective talents and strengths and drive growth more effectively,” said Janet Balis, EY global advisory leader for media and entertainment and EY Americas marketing services leader. “Together, they can open the door to new opportunities around data-enabled marketing, sophisticated views on ROI, and better value creation.”
What will it take to bridge the gap? Here’s my advice:
1. Build the right business case: To obtain approval on a bigger budget, CMOs need to build a business case that is long on quantifiable forecasting with a substantiated ROI and short on intangible outcomes. CFOs understand numbers, which can be hard to quantify when it comes to customer experience. As a result, CMOs will want to frame their business case around the journey of “what” and “how,” supported by “why.”
CMOs don’t have to do it alone. Choosing strategic partners and vendors based on how well they can demonstrate how a particular path or solution will enhance the customer experience, address changing customer or market dynamics, and quantify the tangible outcomes it can achieve can go a long way in convincing their CFOs to increase their budgets.
2. Foster alliances within the organization: While forging a direct relationship with the CFO is the straightest route to a stronger connection, CMOs may want to improve supporting relationships with other C-suite executives. For example, CEOs, as the ultimate champion of many of the organization’s strategic initiatives, can help to strengthen cooperation among the two functions.
Similarly, partnering with the CIO on digital transformation initiatives offers greater success in building a winning business case for the CFO and achieving the desired outcomes. On the flip side, as CMO and CIO agendas blur, the CFO can serve as intermediary as well as a key supporter.
3. Open the channels of communication: Better communication begins by gaining an understanding of another’s similarities and differences. CMOs need to have an open conversation with their CFOs about their needs, motivations, and concerns around forecasting, metrics, and ROI. EY’s survey suggests that CFOs are looking to CMOs to think more strategically and use data to more predictably forecast their deliverables as well as their ROI.
If CMOs can appreciate what motivates their CFOs’ thinking, as well as which KPIs to establish and how to measure ROI, they stand a better chance of finding alignment on investment and budget decisions. Further, CMOs may want to structure these conversations around incremental investments versus large, lump-sum amounts.
As the CMO role continues to evolve in response to digital disruption, shifting customer preferences, and greater competition from within and outside their industries, they’ll need CFOs as allies in their journey. By establishing more open communication, building a strong business case for digital investment, and fostering complementary relationships within the organization, CMOs and CFOs can chart a path to success—together.