We live in heady times. Times when siloes within organizations must be broken down so data and intelligence can be shared.
Times when even the CFO and the CMO must work together ... dare we say, be friends.
Talk of the CMO and the CFO cooperating is not new. What's new perhaps is the level of strategic imperative.
High Level Collaboration
Disruption from within and, more frighteningly, from without have made it required reading for business leaders to study ways to open up their organizations to transparency, information gathering and resource sharing.
The "this is the way it's always been done" approach needs to go.
Historically, independence among operating and functional units was the norm, and that was the case with marketing, whether its isolation was from sales, customer service, product development or finance.
"It was just easier to operate independently because there wasn’t a connective tissue to what each group was doing," recalled Matt Goddard, CEO of marketing agency R2integrated.
Today, that "connective tissue" exists in the form of technologies, which "expose these teams to each other, that provide data on their performance, and that bring insights capable of improving each group and the company as a whole," Goddard said.
It’s All About the Money
What also binds marketing and finance, the CMO and the CFO, is a common purpose: ROI.
Though again it gets down to technology, in this case digital marketing.
The ability to segment customers (out of necessity) and deliver rich, customized experiences online has led to investments in content development and technology.
The CFO ends up approving these investments and in the process comes to understand how budgets are allocated across channels. Empowered by digital, the CMO can track the success that he or she is having within each of these channels.
It's led to a sort of meeting of the minds.
"The CMO was historically seen as simply running a cost center, and the CFO wants to see marketing operate as a profit center. Now, the CMO is also thinking in terms of marketing as a profit center, and there is new continuity in the mission of the two groups," Goddard said.
Of course, this is the Camelot, happily-ever-after-version of the story.
We can safely assume that in plenty of organizations, marketing is still considered a cost center. And that the CMO and the CFO aren't necessarily BFFs.
Then again, research does point to a possible turning point in the relationship. EY reported in July that a majority of CFOs (albeit slim at 54 percent) reported increased collaboration with CMOs and 63 percent saw increased involvement in marketing.
The thrust of the EY findings, echoing Goddard’s sentiment, is that CFOs and CMOs must come together and overcome old silos and antagonisms to adapt and thrive in a changing world.
If you consider customer segmentation as one symptom of that world, nearly two out of three of the 652 CFOs surveyed by EY said that it’s more of a priority. Nearly that ratio (59 percent) said that measuring marketing ROI is a priority.
These same CFO respondents, though, identified what is holding back the relationship. Such as lack of common tools and processes, different cultures, and a dearth of clear key performance indicators (KPIs) to connect the marketing efforts with financial performance.
Goddard's prescription for increased cooperation is simple: open communication, regular budget reviews, and more use of data to measure ROI and help with decision-making.
Sounds easy enough, if the CMO and CFO are meeting across the roundtable in Camelot. Or do you disagree?
Title image by elizabeth lies.