If you’re a Finance leader, particularly in a B2C business, it comes as no surprise that CEOs are increasingly leaning on Finance to develop and implement strategy.
It’s difficult to fully embrace this strategic role without forging a collaboration with Marketing, which means it’s more essential than ever to find ways to partner with your marketing team when it comes to value creation.
Here are four specific changes a partnership with marketing can help promote to drive demonstrable value for the business.
1. Treat the marketing budget as an investment rather than an expense.
As a finance leader you’re familiar with the concept of portfolio management; marketers are essentially portfolio managers of portfolios that include emerging customers and markets, and goals such as retaining and/or profitably growing a set of customers and markets (VisionEdge Marketing)
Within this framework your financial acumen can help guide and challenge marketing to:
- Build plans that consider how best to allocate funds across each element of their portfolio.
- Clarify how investments are intended to contribute to the business
- Report relevant metrics to the portfolio’s investment performance.
2. Help marketing reimagine its mission as value creation, rather than simply sales enablement and brand stewardship.
This begins by working with your marketing team to understand how value is being gained (or lost) and to seek greater transparency into marketing’s operations.
From there. collaborate on a set of measurable marketing metrics that support the business’ financial objectives, including customer acquisition, and retention targets and costs.
Your support will ensure metrics reflect the health and value of the customer base (e.g., net present value, lifetime value, return on loyalty, cost per acquisition) and potentially earn a place on the balance sheet.
3. Shift performance measurement from historic to future focus.
Marketing ROIs may help justify past performance, but they do little to accurately guide future investment decisions. As you focus on value creation, the metrics market used should evolve too.
CFOs should begin to shift from focusing on how to optimize marginal revenue to asking “where should the next dollar of investment be made?” (VisionEdge Marketing)
4. Align on metrics that forecast future revenue and profitability rather than settling for past program ROIs.
Financially relevant, quantitative and predictive marketing performance metrics have long been the elusive holy grail for marketing. But AI and machine learning are making these resources accessible and affordable.
“For too long, marketers ability to drive performance has been hindered by their inability to measure it in a cohesive, relevant manner,” Keen’s CRO Enid Maran says. “Analytics tied to financial contributions that facilitate assessment across both online and offline channels, in a future-focused manner, have only become viable as AI and machine learning at last infiltrated marketing performance management.”
As your company’s finance leader it’s important to understand the state of marketing performance measurement and engage with your marketing team to make sound assessments about where “non-working” investment in performance management solutions will pay dividends, something marketing traditionally has been reluctant to commit to.
To learn more, download the free eBook, A Marketer’s Guide to Collaborating with Finance in an Era of Digital Transformation.
