From the lens of a CFO, there are traditional presumptions about the dividing line between marketing and finance departments. Brand marketing might be perceived as a frivolous never-ending money pit, while the role of finance leaders is strictly to minimize such expenses. However, these perspectives are outdated and due for a change. For the Future Office of the CFO, the competitive and innovative nature of modern business depends on CFOs looking outside traditional “swim lanes”. By understanding the value that brand marketing can bring especially through customer data analytics, CFOs will gain deeper financial knowledge of a company’s trajectory as a brand advocate.
The Benefits of a Finance and Marketing Partnership
In the past, CFOs primarily focused on the bottom line without spending a lot of time learning about all of the financial details impacting a business on a day-to-day basis. Now CFOs must spend more time focusing on managing their resources towards activities and strategies that matter. Understanding all of the different financial aspects of a business is essential to proper management to help set up a company for many years of success.
Of course, we frequently hear that a CFO is only thinking about the bottom line, whether it’s improving productivity to increase profits or eliminating any areas of waste. CFOs and finance departments both share the responsibility of optimizing resources for building the company brand. For example, customers will purchase more as brand preferences rise, while price sensitivity will become less of a focus. In other words, the more that brand advocates–stakeholders–promote and develop a preference for their brand within their target market, the more it helps to inevitably increase profit.
Understanding market segmentation based on needs is a crucial marketing strategy. As brand advocates, the finance team can help address various concerns, whether the financial opportunity for each brand or understanding different priorities throughout the company.
Combining a finance and marketing partnership helps allocate resources for the right markets while developing brands using occasion-driven segments. However, the main challenge is to focus on activities that will make a significant difference. Using finance is the perfect filter for focusing on the right priorities.
The Evolution of CFO Roles
Lately, the role of the CFO has grown into various aspects, whether it’s strategic planning, data management, information technology, business planning, risk management, procurement, compliance, and other types of operational roles.
The pandemic has further increased CFO responsibilities, as staying on top of business operations is necessary for today’s ever-changing work environment. CFOs need to be fast learners while being able to respond to evolving circumstances quickly. The use of technology is perfect for many activities, such as capital management, forecasting, and managing supply chains. Finance is becoming one of the top ways for businesses to utilize data in the workplace.
4 Opportunities for Growth through CFO and CMO Collaboration
Understanding how to overcome challenges is critical for a successful relationship between CFOs and CMOs in today’s work environment.
One of the first steps is to agree on the metrics that truly matter for delivering enterprise value. A lack of key performance indicators between marketing and financial performance often makes it challenging to build a closer relationship between these departments.
Finance leaders will need to find metrics that work for both areas of the company. Staying mindful of non-financial measures to include is also important, such as the value of a well-known brand.
2. Blend Functional Culture
Understanding how to connect the cultural divide between these functions is essential to success between marketers and brand advocates. CFOs need to spend time making each department aware of their different perspectives while encouraging communication to achieve strategic priorities further but still not going outside of risk-tolerance limits.
3. Embrace the Power of Marketing Analytics as a Brand Advocate
Working together on marketing analytics is also vital in transforming this information into meaningful intelligence. While some CFOs feel that marketing is challenging to quantify, big data and customer segmentation can play a critical role in helping to gain valuable insights.
4. Match Marketing Strategy with Business Objectives
Collaborating on the marketing process is also important in making everyone’s job easier, as companies are now looking beyond what has or hasn’t worked in the past. In today’s digital economy, creating an effective marketing plan is critical for driving growth, as financing can help create additional value by ensuring that marketing goals are aligned with business objectives.
In the future, brand-business planning and financial processes need to become even more integrated with managing businesses. Profit margins, cash flow, revenues, and return on investment for stakeholders are all dependent on developing a solid brand.