If you’re like most marketers, the thought of end-of-month reconciliations, quarterly close outs, and external audits probably sits somewhere alongside going to the dentist or waiting for an oil change. But for a modern marketer, being in complete control of your spend while also being in line with company policies has become critical not only if you want a bigger budget but also for visibility into exactly what marketing activities are working and why.
That’s why I believe the modern Chief Marketing Officer (CMO) needs to start thinking more like a Chief Financial Officer (CFO).
First, let’s examine why you as a marketing leader must take on this type of work that has traditionally been in the wheelhouse of finance. Here are three reasons:
Mismatched timelines: Finance department timelines don’t always match up with your marketing plans. Finance operates on a monthly or quarterly basis while marketing campaigns can start in the middle of a quarter and end in the middle of the next. This makes tracking the ROI of investments for in-market campaigns tricky because the point of measurement is not aligned. If you’re in retail for example, think about all the expenses you incur in the spring and summer in preparation for the holiday season. Measured by traditional accounting practices, your ROI probably looks terrible for multiple months and quarters. Thinking like a CFO would help you to determine and communicate your ROMI each month or quarter based on yearly projections.
Ensure you get what you need vs. whatever you can get: As a marketing leader, you need to be able to walk into a room with other senior leaders equipped with the numbers to sway decisions in your favor. This kind of financial mentality often helps you get the resources you need to accomplish your goals, instead of receiving what someone else who isn’t in marketing thinks is appropriate based on out-of-date estimates.
Win support by controlling your data narrative: If you’re going into a high-stakes meeting, you never want to be the one who doesn’t have the data to back up your thoughts. If you’re reliant on another department, you’re further separated from the data by another layer (read: someone else gets to make it and shape the narrative), and your ability to successfully articulate your point is weakened. On the other hand, if your department knows its budget situation inside and out, you’re going to be in complete control and your colleagues will trust you more.
Now that we’ve covered ‘why’ you must think like a CFO, let’s go over the ‘how’ you start doing so:
Enable your team with a bottom-up planning process: The best way to ensure your team has what it needs to be successful is to…ask them! Successful bottoms-up planning, where individual teams make their recommendations into a full budget, can lead to a higher sense of ownership in achieving goals. The alternative is that if you give a number with no sense of context, it’s more likely people will hedge their efforts and you’ll be disappointed with the results.
Connect budget asks with outcomes: A helpful way for a marketing leader to secure budget is to forecast what will happen in different scenarios. Connecting budgets with outcomes, such as ROI, is a simple, direct response to the question of “if we give you this, what can we expect?” It’s also easy to run scenarios in real-time so you understand what might happen if considerations or alterations need to be made. This can prevent you from being assigned any unachievable goals or another group getting the funding you wanted because they were willing to commit to an outcome.
Give your team a tool that works for them: If your company utilizes a back-office system, the temptation often is just to give marketing a user log-in to that system. But that’s a huge mistake because those tools aren’t designed to support the rhythms of a marketing department–from the way actions are completed to their terminology. It would only create more complexity and slow everyone down. The better approach is to find a tool that easily integrates with that back-office system for the purposes of account and record keeping but also allow marketing to use its budget to drive sales as easily as possible. Further, if you pick a tool that’s already part of your marketing operations (e.g., connected to the work being done and campaigns being executed) and integrates well with your system of record, you’re digitally transforming the way your organization runs marketing and your department will be the most transparent and accountable in the entire company; and this means you can be trusted with more resources!