CMO and CFO: Kiss and Make-Up (6 steps)
It’s no secret that in many organizations, the CMO and CFO often don’t see eye to eye. It doesn’t need to be this way — and organizations that don’t have alignment will be outcompeted by those that do.
Digital has transformed the role of B2B and B2C marketing teams. Marketing is no longer a silo responsible for tradeshows and out-of-home: they are becoming responsible for branding and measuring the customer experience from lead to renewal. They are also responsible for revenue accountability for their activities.
CMOs and CFOs need to change their mindsets
The traditional mindset is that marketing is a cost center. That’s no longer true — it’s a revenue center. CMOs and CFOs can’t continue to play their old roles in this new paradigm.
The classic relationship, in which CMOs continually ask for more money to build brand equity and CFOs constantly demand 100% proof of ROI before increasing budgets, no longer works.
In order for these two business leaders to enable growth, they need to become partners, not adversaries.
In order to help shift the mindset in small and large corporations alike, here are some of the top ways to make the CMO and CFO relationship better.
CMOs and CFOs Need to Start Speaking the Same Language
There’s often a disconnect between the CFO and CMO when it comes to overall business goals and objectives. In the old paradigm, they didn’t speak the same language. CMOs talked about performance in terms of eyeballs or impressions, and CFOs drilled down to revenue and churn. This was okay when new subscribers or leads couldn’t be attributed to marketing programs.
Now they need to speak the same language: and CMOs need to do the heavy lifting. Marketing is now a revenue center — and CMOs who want to be successful need to pitch and report on their programs in terms of contribution to pipeline, revenue, and customer retention. Soft metrics are important to optimize campaigns, but the bottom line is what’s important to the CFO.
Savvy CMOs will go beyond simply saying that their next marketing campaign will increase forecasted revenues by 15% next quarter. They will get even more specific by working with the CFO to align on marketing and advertising costs, determining ROI, determining support costs, understanding key market segments, and more.
CFOs and CMOs Need to increase One on One Time
Building a working relationship like this doesn’t happen overnight — and it won’t happen if the CMO and CFO meet once a quarter (or heaven forbid, once a year). Regular face time (both casual and in formal settings) is crucial is essential for building a better relationship. When the CFO sees the marketing team as a valuable, profit-driving asset to the business, and when the CMO sees the financial team as an indispensable business partner, the entire company will benefit and grow.
CMOs and CFOs Need to Get Specific on Goals
Determining what should be measured, how vital information is measured, and how often results are reviewed during a marketing campaign are some of the key foundational elements to fostering collaboration between a CMO and CFO.
Now that CMOs and CFOs are discussing performance in terms of the same metrics, it’s crucial that they both are in conversation when high-level company goals are being set — and that they align on a regular reporting structure to evaluate the success and failure of different programs. Regular and transparent reporting of program performance from the CMO and budget allocation from the CFO will help build common ground.
CMOs and CFOs Need Empathy to Understand the Challenges and Expectations of Both Roles
With advertising costs at an all-time high for many businesses, CFOs may have a harder time justifying the cost of advertising and marketing without forecasting or projections mapped to ROI. From the CMO’s perspective, the CFO may seem like they’re actively working against the marketing team by limiting marketing expenditure and not seeing the value of strategic marketing spending.
What both business leaders should realize is that they often have the same business goals, but approach them from very different viewpoints. Both parties want to see increased profitability, but approach it differently — marketing from a sales growth perspective, and the financial team from controlled spending.
As long as both leaders are aligned on goals and measurement and have a good relationship, they can discuss details in a cordial way and find common ground.
While it’s much easier said than done, approaching tasks and campaigns from a different perspective allows the two leaders to build a better relationship. Open communication, continual feedback, and consistent collaboration give both the CMO and CFO insight into the value and key contributions of both roles and departments.
CFOs and CMOs Need to Learn to Trust One Another
Trust is at the center of any business relationship, and it’s extremely important for a successful relationship between a CMO and CFO. Regardless of the business issues that are happening, whether it’s a market fluctuation, a strong competitor offer, or customer churn, both the CFO and CMO should decisions that are in the best interest of the business — not their department.
CMOs and CFOs who want to help their companies grow need to leave behind the old paradigm that their relationship isn’t a good one. This may not be easy in the beginning — especially if the existing relationship isn’t great. But “reaching across the aisle” to create a stronger business partnership will ensure continued success going forward.