It requires some serious strategizing and a willingness to adjust to changing conditions to get the marketing budget in good shape. Marketers can use several tools to gain control over budgets and become more transparent and accountable. These tools support adaptive planning, provide budget insights to make data-driven decisions, and strategic cost optimization—all of which are top-of-mind for CMOs and CFO alike.
In 2020, marketing had to “get in shape” rapidly to adjust to an environment that shook up everyone’s well planned plans for the year- in a matter of days. As a result, marketers all over the world, like the rest of the world, began to establish a new discipline while working remotely – scenario planning, strategic cost optimization and budget forecasting.
The modern marketer must have complete budgetary control. Knowing what works in the marketing mix and why it works is a solid strategy to minimize budget cuts. What’s more significant, however, are the opportunities that arise when marketers have a deep understanding of their marketing mix. As a result, today’s Chief Marketing Officer (CMO) must begin to think more like a Chief Financial Officer (CFO).
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Marketers Need to Start Doing Finance Work
Here are three reasons why a marketing executive may need to take on more work that has previously been handled by finance.
Misaligned timelines – The finance department’s timelines don’t always coincide with the marketing strategies. Finance works on a monthly or quarterly schedule, whereas marketing efforts can begin in the midst of one quarter and end in the middle of the next. Because the points of measurement aren’t matched, tracking the ROI of in-market campaigns is difficult.
Obtaining what is required – As a marketing executive, they should be able to walk into a room with other senior executives, armed with the data necessary to persuade decisions in their favour. They can more readily receive the resources they need to achieve their goals with data in hand, rather than what someone who isn’t in marketing feels is suitable based on out-of-date projections.
Data-driven decision-making – When it comes to high-stakes meetings, CMOs never want to be the one without the data to back up their claims. If they rely on another department, they are isolated from the data by still another layer, weakening their capacity to effectively communicate their argument. On the other hand, if their department understands its budget condition from top to bottom, they will be in perfect control, and their colleagues will have more faith in them.
Thinking like a CFO
Here are a few strategies for CMOs that can help them think like CFO:
A bottom-up approach to planning – Bottom-up planning, in which individual teams make their own proposals, which are then compiled into a whole budget, can lead to a greater sense of ownership in reaching objectives. The alternative is to give a number with no context, which increases the likelihood of people hedging their efforts and CMOs being disappointed with the results.
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Agile planning – For a marketing leader, forecasting what will happen in many circumstances is a beneficial method to safeguard the budget. Otherwise, they may be assigned a number of unattainable goals because another group was willing to commit to a result and received what it desired at their expense. This is useful not only for long-term planning, but also for making short-term decisions in response to changing market conditions.
Providing the team with tools that work for them – If the organization already has a back-office system in place, the temptation will be to just give marketing access to it. This is a significant mistake because those technologies aren’t built to assist a marketing department’s workflow. Using any old system, from the way operations are done to the terminology used, merely adds to the complexity—and more complexity means less agility. Finding a platform that can readily link with that back-office system for account and record keeping while also allowing marketing to use its budget to drive sales as efficiently as possible, is a preferable way forward.
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