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5 Tips To Get Your CFO‘s Ear
“They have to agree that there is a joint goalpost for both of them,” said Ron Hill, professor of marketing and business law at Villanova School of Business, in an interview with CMO.com. “If somebody is trying to hit a home run [and] somebody wants to score a touchdown, they’re not even on the same game.”
Conversations have become easier in the past few years, even as the recession tightened the scrutiny on marketing budgets, experts said. Both sides are more focused on showing an ROI since the start of the recession, and the rise of new digital efforts, such as social media and mobile, have brought on more real-time metrics to express that ultimate goal.
“It’s not that will we ever get to the Holy Grail. I think it’s very difficult. But I think the digital age is getting us a step closer,” said Carl Anderson, CEO and former CFO of Doremus, the corporate advertising specialist.
There is no silver-bullet metric that will unlock the money chest, either. Depending on each company’s goals and industry, the metrics relevant to the CFO will vary. In a new-product introduction, for example, metrics showing trial, such as awareness and consideration, can be traced back to activities such as sampling and point of sale, which can clarify the ROI, noted Ted Woehrle, CMO of Newell Rubbermaid, in an interview with CMO.com. In the auto industry, lead generation is the goal, added Julie Roehm, founder of marketing consultant Backslash Meta and a former Chrysler marketer.
Marginal ROI–the extra return for every dollar spent beyond the projected budget for an effort–can be an effective number to show finance staff the results of marketing, said Douglas Brooks, executive VP of marketing at Management Analytics, a unit of Synovate. But like a financial adviser talking up an investment, the marketer has to put that model in the context of the larger effort, he said. “That’s what marketers get paid to do,” he told CMO.com. “The day a model replaces a marketer, we’re all in trouble because there is no growth and no innovation.”
Other metrics–such as reach and frequency, number of hits on the Web site, and leads generated–are “lovely and measurable, but they don’t translate to what the CFO wants to show,” Roehm told CMO.com. Those numbers need to be related to the company’s bottom line, she said.
Brooks said he often doesn’t report straight ROI to clients. Instead, he prepares a quadrant chart relating the effectiveness and efficiency of marketing investments, showing which ones are driving sales, which could be more successful with more spending, and which could be cut. “You need to be a data-driven storyteller,” Brooks said. “Analytics don’t tell the whole story. When analytics are successful is when you have a good translator.”
So how can a marketer learn to translate ad-speak into terms familiar to the CFO? Here are five simple tips to help you get on the same page as your brethren in the finance department.
1. Walk In The CFO’s Shoes
“It’s like any relationship. I would begin by cultivating mutual respect,” said Hill, recalling one of his first consulting projects, which involved mediating between a company’s senior vice presidents of finance and marketing. “They were at loggerheads, absolute loggerheads.”
The marketers didn’t care about profits because they were being judged solely on increasing sales. Meantime, the finance staff was concerned about losing profits by overspending to boost sales. By getting them to role-play each other’s position, Hill got the executives to begin searching for common ground.
This is easier in companies where the two departments work closely, marketers said. Brooks said one CMO he works with takes the finance staff out to lunch and invites them to meetings and marketing event. That way they can get a sense for what his department does.
Of course, the reverse also works, Roehm said. “Learn the financial operations of the company. . .Become a sponge,” said the former Chrysler and Wal-Mart marketer. Earlier in her career, she held positions in sales and finance, which gave her a sense of how other departments operated.
“If you’re a CMO, you’re in the C-suite–you’re friends,” Roehm said. “That’s just teamwork 101. But a lot of CMOs avoid the CFO because they’re always taking things away.”
Read more: http://www.cmo.com/budgeting/5-tips-get-your-cfos-ear#ixzz1KwSOV0yq
is as rewarding as ever. Fortunately, it still makes plenty of sense, too.
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