Why CMOs Should Align With Their CFOs
There is an ever-increasing complexity in B2B marketing that shows no signs of slowing down. According to the IBM Global CMO Study, a full 79% of Chief Marketing Officers (CMO) expect the complexity of marketing to increase over the next five years. However, of those CMOs less than half feel prepared to handle this complexity. This is indeed a perilous position for marketing leaders and something has to give.
One of the areas that marketers feel most exposed is the area of metrics and measurement. For all of the focus and discussion on Big Data over the last few years, marketers continue to struggle with making sense of the work they are doing and the value it is delivering to the business. While solving this problem will not limit or slow the impending complexity, it will enable marketers to demonstrate the impact they are making on the business and better align their priorities to that of the business.
Lack of Knowledge & Expertise
In Forrester’s Report – B2B CMOs Must Evolve or Move On, 97% of CMOs either agreed or strongly agreed that “marketing must do things it hasn’t done ever before to be successful.” One of these things is financial management. While there are plenty of articles, blogs and speeches given on the need for marketing to demonstrate ROI and drive pipeline and revenue, the reality is that most marketers have never been trained to measure the quantitative value of their marketing or demonstrating the Net Present Value (NPV) of their marketing activities.
In fact, according to the Fournaise Group “90% of marketers are not trained in marketing measurement or marketing ROI”. This is demonstrated in the fact that 67% of marketers do not believe that marketing ROI requires a financial outcome. Let’s be clear, ROI is all about financial outcomes! This lack of know-how combined with the impending rise of complexity will only led to additional pressures on the CMO, which are already intense.
Connecting With the CFO
Despite this issue that exists in marketing organizations there is a lifeline that CMOs should look to take hold of, but currently few are…the office of the Chief Financial Officer (CFO). Finance organizations are accustomed to complex financial models, have data and financial analysts on their staff and understand quantitative analysis. However, only 14% of CMOs state that their relationship with the CFO has increased over the last two years according to Forrester.
While marketers are looking to improve the relationship and alignment with their sales and IT teams, one of the areas that should receive more attention is that of the CFO. Marketing organizations that do not have open headcount for their own financial/data analyst positions can bridge the gap that exists in their reporting capabilities by forging an alliance with the CFO. In collaborating on their reporting needs by developing the financial models that the CEO and the rest of the business demands, the marketing team can learn the models and begin to close this specific skills gap.
I agree with the 79% of CMOs who expect growing complexity in the years to come. However, the need to change, adapt and further the relationship with the CFO in order to report on financial outcomes is a must as it will provide clarity and demonstrate the value in marketing investment.
Author: Carlos Hidalgo @cahidalgo is CEO/Principal of ANNUITAS
*Image courtesy of Canva.com
