Strengthening future budgets depends on the CFO’s better understanding of long-term B2B marketing ROI. To have a greater impact on their businesses, CMOs must translate their work into a metric that CFOs find valuable.
Contrary to popular belief, the CFO’s role extends beyond simply keeping an eye on a company’s finances. Their abilities are essential for developing a solid strategy for the overall success of any business.
Organizations can establish the ideal foundation for business growth through proper communication and understanding. The CFOs’ and marketing teams’ cooperation has made many high-growth businesses possible. However, because marketing and finance are unrelated functions, describing the marketing budget to an organization’s CFO can be difficult. Marketing teams frequently feel anxious when discussing the budget or new campaigns with the CFO.
The CFO might object to a poorly planned marketing budget. On the other hand, a tight budget can unintentionally restrict the marketing team’s ability to be creative.
Marketers need to understand how their costs add value to the company, which is not a difficult task.
Budgets are not permanent
Although CFOs enjoy rigidity and putting a price on every aspect of business, if something is working, they can continue it. Spending more than anticipated on social media ads or recruitment campaigns may seem unusual. But if a strategy is effective, CFO prefers to keep doing it.
At the beginning of the year or quarter, it can be difficult to determine the focus because things can change quickly. Altering campaigns in response to results or changes in demand can alter the marketing budgets.
Marketing is just as essential to business growth as anything else, provided the company is heading in the right direction. But it’s important to communicate with the CFO.
The CFO occasionally has a bigger budget picture, which might not fit the company’s plans. With good CFO communication, more funding might be accessible for a bigger picture to benefit the marketing team and the business.
Here is how marketing teams can communicate with the CFOs:
1. Prioritize the company’s goals
By concentrating on the business goals rather than the marketing goals, the first step is to justify the marketing expenditure.
It entails avoiding vanity metrics such as page views, followers on social media, and subscribers. These metrics can help create the best marketing strategies, but cannot defend marketing expenditures.
Instead, focus on metrics that can vary, like sales and customer retention. The marketing team and CMO should offer the reasoning and supporting data for these metrics. For instance, marketers must build and track brand awareness if the company’s objectives include becoming the market leader.
To accomplish this, marketing teams must have a well-defined marketing plan and budget that reflect the CFO’s top priorities.
2. Work in tandem with the sales teams
Marketing teams can present their budget and plan to the sales team before presenting it to the board. Ask for their opinion after demonstrating how it fits with their sales objectives. An integrated work strategy helps marketers improve their interactions with the sales team.
It will also show that they better grasp the company’s overall goals and how the strategy fits into those goals. CMOs can also explain how increased marketing expenditures will assist the sales team in meeting its objectives.
By doing this, they can convert the marketing team from the CFO’s perspective of a cost center to a profit center.
3. Give a precise marketing plan
The 2021 CMO Survey indicates that 45.1% of marketers feel increased pressure to convince CFOs of the value of marketing. The economic recovery of expenses is the primary concern of most CFOs. Marketers must have a clear strategy to support their actions and allow CFOs to maintain the business.
Marketers can explain how they intend to use the marketing budget once they have a detailed marketing plan. Most marketing teams emphasize branding and other activities at the top of the sales funnel.
Marketers need to have a complete understanding of the entire process when making a pitch to a CFO. They also need to include insights about the lower funnel revenue and sales tasks. Utilise metrics like KPIs to illustrate the ROI of marketing. A small ROI calculator could be a great addition to the marketing budget.
4. Demonstrate the ROI
It should go without saying that the discussion of returns on investment (ROI) is important during meetings with the CFO. Marketers frequently are not aware of the fact that CFOs prefer to see a positive ROI. The current state of technology usually determines this.
Many CFOs would be willing to wait at least a year to see ROI if it were a game-changer. However, the length of time generally depends on how big the organization is. Ultimately, CFOs are interested in knowing how the technology that CMOs want to invest in will increase the company’s value.
Many marketing teams show their ROI by increasing their efficiency, scale, and agility. Marketers achieve it through technological innovations and advancements like platform approaches and AI marketing. Both of these strategies demand time and financial investments.
By utilizing platforms rather than point solutions, marketing departments can save money on resources, integration costs, and other expenses.
Also Read: Four Strategies Businesses Can Adopt for Brand Building and Measurement
To continue building their brands in an uncertain environment, CMOs will need to speak CFO’s language
Targeting potential customers is necessary for businesses that want to stand their ground in an uncertain economy. In such scenarios, successful brand-building is the key.
Almost all marketers agree that developing a brand is essential to preventing memory loss and ensuring quicker recovery during uncertain times. Marketers need to learn that marketing budgets are always the first to be cut when disaster strikes.
Marketing executives think that strengthening future budgets depends on the CFO’s better understanding of long-term B2B marketing ROI. To have a greater impact on their businesses, CMOs must translate their work into a metric that CFOs find valuable.
Although it may be difficult, winning the CFO over is not impossible. Understanding their priorities and coordinating the strategy with them will show how marketers will support them.
By conducting a fundamental, data-driven analysis of the marketing results, CMOs can give the CFO tangible proof. They can include KPIs, conversion rates, lead generation, and demand generation metrics.
The team can persuade the CFO to approve the budget once they align their marketing goals with the organization’s objectives. The CFO and the marketing team can maintain a harmonious relationship with clear intentions. This blend will enable the development of future inbound marketing strategies.
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