In many cases, marketing teams are nervous about approaching the CFO in regards to the budget or new campaigns. On the other hand, CFOs need to answer to the CEO if something goes wrong or the budget goes awry. The combination of the two can create a scenario where a CFO wants to be conservative in spending while the CMO or heads of marketing want to expand their horizons in order to create and spend more.
The right communication and understanding from both sides will create the ideal platform for company growth. Here are 3 ways in which a CFO can expand their knowledge of marketing techniques and how they can provide smoother sailing for the company.
Generating Leads and Brand Building
Oftentimes, marketing VPs are asked to show exact models of how much money it would take to generate X amount of sales through a certain ad campaign in a given quarter. But thinking of this simply in sales numbers is not enough. If the only type of marketing campaigns that are created are ones that directly attempt to generate sales, it may actually stunt growth in the long run. When the only time people see a certain company is in regards to a “buy” or “request demo” button, they may start giving it a negative association. Therefore, generating marketing campaigns who's goal is to build brand awareness is just as important as sales campaigns- even though there is no direct money value to it.
Ironically, combining sales targeted ads with social media and out of the box branding can build more success in the long run. De Beers’ campaign of “A diamond is forever” or Nike’s “Just do it” didn’t come with a “buy now” button- especially because they started these campaigns well before online shopping. Rather these were average companies who came up with advertising slogans that the entire world would recognize, subconsciously placing brand awareness in the back of our minds and influencing our buying decisions- sometimes only years later.
This is why it is hard to put a dollar value on marketing. The best marketing tactics don’t just generate leads for sales teams – they generate demand for a product or service. CFOs often struggle with this because there is no value or flow chart for brand awareness or word of mouth. However, understanding the bigger picture- with marketing, or even sales or customer service teams, will help the finance department understand how much brand building helps grow the company on all fronts.
Budgets are meant to be broken
CFOs like rigidity and putting a price on every business aspect, but if something is working why not continue? Although it’s unconventional, and even scary to spend 2 or 3 times as much as planned on social media ads or recruitment campaigns- if it’s producing then keep going!
It’s hard to predict at the beginning of the year or quarter what should be focused on, and things can change rapidly. Changing campaigns based on results or shifts in demand is not a bad thing, and is often followed by an increase in marketing results. As long as the company is going in the right direction, marketing is as important for growth as anything else.
However, communication with the CFO is key. Sometimes the CFO has a bigger picture of the budget, and even though from a marketing perspective doubling down on the LinkedIn ad campaign is the absolute best thing to do at the moment, it might not fit in the company's plans. At the same time the opposite may be true, and with good communication with the CFO, more funds may be available for a broader vision that can help the marketing team and the company thrive.
Multi touch customer reach is critical
Not every campaign, lead, or demo request can be presented in a spreadsheet. A buyer’s journey is often long and complicated and every customer gets there in a different way. Even though CFOs want to measure everything in terms of ROI, this simply doesn’t always fit in marketing.
Marketing theories have shown that it takes a vast range of customer exposure until someone buys the product or service. No matter how good or impressive the product seems, hardly anyone will buy it (especially as a longer term commitment) when it is their first time seeing the brand.
The “marketing rule of 7” is a famous theory which states that it takes seven interactions with the brand before a customer buys. However this number can range up to 13 interactions, especially when talking about a higher end B2B product. All of this further complicates marketing results, as even with all of the technology in the world and ways to target customers, the human mind and subconscious processes still play a huge role in decision making.
There’s a famous saying from Accenture’s B2B customer experience strategy: "Most B2B buyers are already 57% of the way through the buying process before the first meeting with a representative.” This gives a lot of credit to marketing. An SDR representative can close a deal rather easily due to previous exposure from a wide variety of marketing campaigns, but at the end of the day there is no spreadsheet that will show the entire process and who is responsible for what stage. The opposite is also true- a small Facebook ad can generate multiple sales due to previous exposure from a sales pitch or word of mouth, yet the ad will get the credit.
Aviv Canani, VP Marketing at FP&A solution DataRails sums it up well: “As a CFO, you need to trust that your marketing counterpart knows what they’re doing to better understand the exact buyer journey. Try not to measure everything with an ROI calculator, as tempting as it might be. There’s no way I would ever be able to put a dollar amount to the value of, say, another five-star rating from a happy client. A CFO must trust that I understand its value.”
As a CFO involved in the entire business process, brainstorming together with marketing will only bring out good things. CFOs have data driven insights and together with the marketing team’s broader understanding of reaching customers, great things can happen.