Finance is to marketing what bees are to honey, and if you’re looking to take your brand to the next level, it’s financing that’s going to put wind in your sails and fuel in your tank.
Offering an on-the-ground perspective of the importance and complexity of this relationship is Aviv Canaani, VP Marketing at the financial planning and analysis platform DataRails.
Here Canaani lays out the common misunderstandings he has found between Chief Finance Officers (CFOs) and marketing specialists based on his extensive experience. Specifically, these include the distinction between Lead Generation and Demand Generation, timely communication between finance and marketing team leaders on budget issues, and the difficulty of attributing success to specific marketing initiatives.
In this guest post for The Fintech Times, Canaani strives to strike a better path forward marked by synchronisation and understanding between marketers and financial pros:
Let’s be honest – you probably don’t fully understand marketing.
(It’s fine, I don’t fully understand finance.)
Most relationships between CFOs and CMOs can be summed up in the following picture:
Please don’t be that CFO. Come on this journey with me, I promise you’ll learn a lot, and hopefully have some fun, too
I’ve been leading marketing teams for many years now. I get it. As CFOs, you don’t want to be rubber stamps for crazy marketing initiatives (did someone say a TikTok influencer campaigns?). You’re the ones in charge of maintaining the books, balancing the budgets, and if the company goes into the red, you’re the person the CEO and board turn to for answers. And yet, as CFOs you want to be more than just number-crunchers or gatekeepers – you want to and should be strategy-setters.
I’m not writing this article to complain. I truly believe that if CFOs could understand marketing better, they would be better at their jobs. Since I’m the marketing guy let me lay out the key three things, I believe you need to better understand about marketing.
1. Lead Generation vs. Demand Generation
In the past, I’ve been tasked with providing models that show exact figures for how much marketing spend it would take to get prospective clients to attend demos with account executives. I truly wish it was as easy as saying that it takes $500 in LinkedIn ads or $800 in Google ads to meet a given quota for demos, sales or revenue growth. But life is more complicated than that. Sure, I can create paid campaigns on different ad platforms and come up with such numbers. But paid campaigns whose sole purpose is to generate leads is just a small part of the bigger picture.
Many CFOs are skeptical about the power of building a brand, but it is genuinely an important part of successful marketing. The best marketing tactics don’t just generate leads for sales teams – they generate demand for a product or service. Chris Walker, the CEO of Refine Labs, a demand generation marketing agency, talks about the phenomenon of “Dark Social”. Having people comment on your LinkedIn posts or listen to your podcast is highly valuable for building your brand and, eventually, growing your business. Having your target audience talk about your brand with colleagues is the holy grail, but unfortunately, there’s no budget that can be specifically allocated for “word-of-mouth”. This is something that happens organically when you build a brand successfully. It is true that potential clients might not become customers immediately, but once they are ready to buy, your brand benefits from higher ‘mental availability’ – the probability that a customer will think of a particular brand in a buying situation.
Still skeptical? When was the last time you saw an ad on Facebook for a product you’ve never heard about, immediately clicked on it, signed up for a demo, and bought the product? Me neither. Think about the most iconic advertising campaigns of all time. For example, how many direct sales did Nike’s famous “Just Do It” slogan yield? Who knows? But marketing worked even before you could click on ads and purchase shoes online.
2. Budgets are meant to be broken
It can be easy to forget but… budgets don’t have feelings. And changing budgets throughout the year won’t offend those Excel spreadsheets. Marketers can’t know in December what’s going to happen over the course the following year. If, for example, I run a marketing campaign in March that beats all expectations, I’d want to allocate more money and resources towards growing that campaign. And yes, that might mean breaking the budget.
I once worked in a company where I chose to double down on a specific campaign that was paying off big time. I made a quick decision to invest it in that campaign rather than in a different line item, and it worked. We saw amazing revenue growth that month. However, the experience also made me realise how communication between marketing and finance needs to work both ways and be more transparent. In my rush to capitalse on the opportunity, I hadn’t cleared it with my CFO, and he was rightfully annoyed.
As a Marketing leader, I want to have the kind of relationship with the CFO where we work together to navigate the budget and make drastic changes when that’s indeed the right thing to do for the business. I need leeway to take risks. Sometimes they will fail. But when those risks pay off, we could both reap the rewards.
3. Multi touch attribution is hard
Oh, how I wish every new sale could be attributed to a specific marketing tactic and presented in a simple spreadsheet! Sadly, that’s not usually the case.
You may have heard of data from the “Online Marketing Institute” which shows that it takes up to 13 “touches” for an interested prospect to become a new paying one. And those 13 touches can be vastly different from one potential customer to the next, making it hard to track and predict. For example, a prospective client might peruse our site after hearing about our product from a colleague, but not register for a product demo. Three months later, she’ll finally sit through a demo after seeing a targeted LinkedIn ad and speaking with a sales representative. After taking time to mull over the decision, she may still look at several online reviews on G2 before taking the plunge and signing the contract.
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.
We marketers need you CFOs to be on our side, because at the end of the day, we need to work together. I understand the impulse to show the CEO when marketing spend isn’t generating the ROI you think it should, but please, let’s brainstorm together. I need you to help me overcome barriers and give me data-driven insights to be better at my work. Trust me, I’m also concerned about the cost of acquisition and don’t want to spend money just for the sake of it. But it is my job to help you better understand the things that you can’t see in Excel spreadsheets.
Fortunately, I work with a CFO who gets marketing. And since I work for a company that sells to CFOs, I’d like to think that I understand and respect the value you bring to the table. If after reading this, you remember my brand’s name, and later go to our website to check out our solution it would be awesome. But I would still never be able to measure the ROI of writing this blog post.