What economic headline isn't depressing today? Reuters reported June 28 "dire consumer confidence data" fueled drops in the S&P (2%) and Nasdaq (3%), with particular bad news for tech giants Apple, Microsoft and Amazon. Tech stocks as a whole are suffering historic drops because of fading consumer confidence.
The headlines are hard to escape. Everything's sobering when it comes to the possibility of an economic recession in the US.
Marketers are not immune. Yet still, there is good news in marketing circles. The CMO Survey in February found marketing budgets as a percent of overall budgets rising to 11.7%, resetting to pre-pandemic levels, while marketing budgets as a percent of revenues increasing to 10.3%.
Yearly growth in marketing spending broke 10% for only the second time in a decade and is predicted to rise further over the next year to 13.6%. Digital marketing spending, which currently accounts for 57.1% of marketing budgets, is expected to grow by 16.2% during the same period.
If marketers need a best pal today inside their organizations, it may be the chief financial officer. Marketing departments are asked more so than ever in these times to justify ROI in campaigns, customer experience loyalty programs, marketing technology, marketing operations and everything else that keeps the marketing engine running.
They can turn to the CFO as an ally. And this is where the CMO-CFO relationship becomes critical. How do chief marketing officers make that a successful relationship with chief financial officers in these times?
Align Marketing, Financial Goals and Metrics
“Making sure that your goals and metrics are aligned is key to better CMO-CFO collaboration,” said Simon Elkjær, chief marketing officer at avXperten. “Keeping track of the right KPIs and metrics will make it easier for both parties to see eye-to-eye and communicate with one another more efficiently. Being aligned will make it easier for you to plan, achieve goals and collaborate.”
Further, CMOs and CFOs need to have a more open mindset. “No matter how great the changes you implement may be,” Elkjær told CMSWire, “leaders can never really make the most out of it if they cease to see the importance of collaboration and growth. Having the right attitude is crucial to better CMO-CFO collaboration.”
Related Article: Optimistic or Delusional? The Chief Marketing Officer 2022 Outlook
Define What Business Success Looks Like
It won’t be easy for CMOs. Some CFOs realize marketing can be a major driver of growth, but many more remain skeptical, according to Jason Ball, founder of B2B marketing agency Considered Content.
“One major sticking point is that CMOs can have a very different view of what success looks like to the rest of the C-Suite,” Ball said, “and one that is normally meaningless to anyone who doesn't work in marketing.”
CMOs need to ensure a proper sit-down with CFOs to chat about the business's goals. “It's surprising how often ‘what business success looks like’ hasn't ever been discussed with the CMO,” Ball said. “And yet it's critical they know. In research we did it was a lack of clarity from management cited as the number one barrier to marketing hitting its revenue and pipeline targets.”
Speak a Common Language
Another point of friction? CFOs and CMOs don't speak the same language, according to Ball. Jargon, acronyms and metrics are the language of choice for marketers.
“But,” Ball said, “they baffle outsiders. And if these metrics don't clearly show a contribution to the value-creation side of the balance sheet then they are irrelevant anyway.”
If CMOs don’t want to be stymied by the purse string holders, it’s critical these marketer leaders speak the same language and prove they can add real value, Ball added. “Budget holders are always happy to release funds if it can be shown the business will make money, save money or achieve its objectives,” he said.
Related Article: Why Markets Is the New 'M' in CMO
Let Data Guide the Way
If data is the fuel that drives successful marketing, let data guide the way for a successful relationship with the CFO, according to Kashif Naqshbandi, chief marketing officer with Frank Recruitment Group.
“You need to base as much of your marketing plan on data as you can. The more detail you can go into the better,” Naqshbandi said. “By doing this, you can easily determine the demand and need for the work alongside what the return on investment will be, while also pinpointing the exact steps needed to yield the best results. CFOs thrive on data, so a data-led marketing strategy also helps you easily build a business case for your CFO where you can provide the potential return as well as the opportunity cost you may lose by not implementing it.”
Don’t report data simply because it is available, though, according to Elizabeth Harr, partner at Hinge Marketing. To the extent that CMOs can tie their initiatives to revenue generation and speak the CFO’s language, they’ll be able to forge a mutually beneficial relationship with the CFO and negotiate from a position of strength.
“This,” Harr said, “is how you get to yes.”