In life, a second language brings a whole new set of experiences and a different vision of the world. In the business world, a second language is an asset CFOs are finding increasingly useful. Finance and marketing teams often seem to be speaking different tongues – the departments do not collaborate closely in 90 per cent of organisations.
But the relationship between the two functions continues to gain significance. Marketing budgets now make up a large percentage of a business’ operating costs. This is set to grow, as 26 per cent of marketers predict an increase in marketing headcount in the nearfuture. With confidence increasing against a backdrop of a precarious European economy, CFOs need to make sure they are speaking to the marketing department to understand why money is being spent and what the ROI will be.
While measuring ROI is key to ensuring that marketing campaigns are activated and evaluated properly, only 15 per cent of organisations consistently ensure ROI informs future planning. This is worrying for any CFO that is looking to streamline spending that does not focus directly on growing the bottom line.
Where they were perceived in the past as a potential barrier, a proactive CFO can now be a really ally for the CMO. As a strategic advisor to the business, the Finance Director is in an ideal position to help marketing talk numbers, implement measurement procedures and find ways to be more efficient. Here are five ways that finance can help:
1. Provide metrics for marketing: marketing needs to show an increasingly comprehensive and holistic view of performance and customer satisfaction, which requires more in-depth insight from a broader range of business functions. The finance team is well-placed to help design metrics and drive their adoption through the business.
2. Shape reporting and evaluation: everyone involved in finance will understand what needs reporting, why, when and how often. By working closely together, the finance team can help the marketers better represent their success – and potentially justify increased investment where the business case is strong
3. Spot efficiencies: the finance team’s focus on efficiency and getting more from existing assets has never been more valuable as marketing’s share of technology spending grows. Insight into measuring efficiency and sharing best practice examples across territories can create fantastic value for a business.
4. Act as ‘fresh eyes’: a closer relationship between finance and marketing can help the business to save money. For example, in successful organisations the finance team helps marketing to negotiate better deals with suppliers.
5. Become one of the team: as a sounding board for their marketing colleagues, members of the finance team can use their governance and evaluation skills to help shape the success of a campaign.
Communication is key when it comes to bridging the gap between marketing and finance. For the one in ten organisations where finance and marketing have learned to speak each other’s language, CFOs are confident about the true value of a collaborative approach.