Is it possible to give the CFO harder metrics and demonstrate the benefits of marketing campaigns?
The answer is yes, within reason.
Ever thought your CFO might secretly believe that marketing is nothing more than a necessary evil, not directly connected to bottom line profitability?It’s true.
Ok they MAY believe marketing supports overall business strategy, but in a nebulous and unquantifiable way. So marketing is first cab off the rank when belts need tightening.
In a showdown it’s the CFO who will win - a recent Active International survey found that it is the CFO and not the CMO who will carry the day. For example, even Twitter called on its CFO to stand in as CMO while they searched for a new one.
Much more will be achieved if the CFO and CMO can be friends. The CFO might be focused on controlling cash flows and the balance sheet and the CMO on driving brand and growth, but the reality is that you can’t have one without the other.
And given the CFO usually controls the purse strings, it is incumbent on the CMO to demonstrate that marketing is an asset and not a cost centre.
Showing the CFO the money isn’t always easy
The problem for the CMO can be summed up in the words of a recent Business Insider article.
“The CFO wants proof that the money they delegated to marketing last quarter is actually delivering a return for the business, but marketing can take time to have an effect on sales, which leaves marketers fumbling around for other, softer metrics, like awareness, affinity, recall and social media engagement.”
It’s clearly a challenge, but there are plenty of high-profile converts to the view.
In fact, in a recent conversation with BlueChip’s Carden Calder, HubSpot’s COO, JD Sherman (@J_D_Sherman), previously a CFO at Akami and IBM, actually described his conversion on the road to Damascus – shocking himself with his now firm view that marketing assets, like content marketing, are actually the growth engines of a business. And done right can produce leads, nurture prospects and galvanise customers 24 hours a day.
So it possible to give the CFO harder metrics and demonstrate the benefits of marketing campaigns?
The answer is yes, within reason.
Two steps to start a conversation with cold hard numbers
Step 1 - Get the numbers.
- Take a good hard look at where you are now, and where you want to go
- Conduct an audit. Analyse your website and your content. Talk to your staff and clients. Look objectively at past campaigns and analyse how you tracked against your performance objectives and goals. Focus on the efficacy and rigour of your data tracking
- Do a gap analysis. Compare your position with best practice and most importantly, how well your campaigns supported business objectives
- Create an action plan in two parts. Part one hones in on commercially optimised quick wins, part two on longer term aspirations
Step 2 – Decide what you can and can’t deliver
- Divide marketing into functions you should stop, start and continue. Stop those things which do not add value, start those which are required but are not currently being done, and continue those which are working well. Prioritise these functions
- Make sure your data analytics are giving you the insights you need
- Develop a plan. This can be a simple as an action plan to address gaps in light of what’s possible now, to a full funnel marketing strategy and action plan. This means a calendar of activity, responsibilities, attribution tracking and recommended budget over 12 months
How will this help?
A proper audit and clear deliverables (with the help of an external partner if needed) is the best starting point for a CMO who would like to present an independent view, with relevant benchmarking of the ROI contribution of marketing to the business. If you can demonstrate what you are doing and how, and how you are tracking against agreed KPIs, the CFO is far more likely to understand what an effective marketing strategy looks like, and more importantly, to have your back when it comes to conversations about budget.
At the same time, it’s important to understand, and to get the CFO to understand, that some marketing activities are long term in nature, take time to bear fruit, and can’t be measured every week or even every quarter.
It isn’t always sensible to KPI every activity, but leveraging your activities as part of a cohesive plan across all the marketing silos is.
We will be releasing ‘A Complete Guide to Content Distribution for Financial Services’ soon, so stay tuned!
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