Here’s an all-too-common scenario in many organizations; the marketing and finance departments rarely talk with one another. When they do, it’s usually to haggle over some budget line item. This environment lends itself to an awkward relationship at best and potentially an acrimonious one in a worst case scenario.
The reality should be far from different because there are more things that bind both departments than tear them apart. Here’s why; both are tied to bottom lines more so now than ever before. Chief Marketing Officers are spending more of their time evaluating their campaigns in terms of ROI. CFOs are becoming even more fixated (if that’s possible) with specific finance ratios to ensure the money being spent is having a positive net effect to the fiscal health of the organization. What’s more, thanks to the availability of cost-effective, real time financial and marketing analytics applications, both departments are coming under greater daily scrutiny by those who occupy the board room. Accountability is truly the dominant watchword.
This prevailing trend means both entities are sharing a common goal of maximizing value and performance of all investments. The opportunities for marketing and finance departments to work together to this objective have never been greater. Here are three ways just to name a few:
Highlight sales trends. Sharing response rates to campaigns as well as positive sales trends will show the holders of the purse strings the quantifiable growth potential of certain initiatives. Doing so can provide a great example of how so-called “soft money” adds to profitability. This can provide concrete justification for increased budgets if needed.
Discuss the “color” of each other’s money. Some marketing operational expenses might actually be more aptly classified as capital costs, and recognized for the assets they are to the company. Building signage is one more obvious example. However, some digital properties such as the company website, social media pages and related maintenance may also be counted as such, since they can be classified as essential to keeping a company’s online storefront open. This administrative exercise can do two things: increase the understanding as to how integral the marketing strategy is to multiple business goals and; make more funds available for specific promotion campaigns.
Identify each other’s “trigger points.” Both departments can glean a lot from knowing them. CMOs, for example should have a working comprehension of what financial ratios and calculations CFOs tend to watch closely for abnormalities. This is important to recognize how campaign budgets will be evaluated and company expanses are justified by those within the company who carefully monitor credits and debits. It will help ensure everyone’s working toward the same goal.
Technology combined with a strong emphasis toward maintaining a high level of productivity and profitability is the norm, and that means marketers and finance departments can no longer avoid each other. More importantly, each department will benefit greatly by working closer with the other.