Widespread digital transformation combined with the disruption caused by Covid-19 means that marketing budgets are being challenged with the imperative for CMOs to achieve more with less.
Last week, I welcomed my colleague Nick Diamond to our CMO Community virtual roundtable discussion to share his perspective on the relationship between modern CMOs and the CFO. At a time of squeezed budgets and high demands, this topic was of great interest to our community members. Here are the main discussion points:
Rethinking the relationship with your CFO
Over the last 18 months, many organisations have pivoted from a focus on growth, the domain of the CMO and sales lead in the business, to one of risk management, the domain of the CFO. There is a level of conservatism underpinning every investment decision. Even if your organisation has maintained a growth agenda in recent months, your CFO is tasked with preserving cash, which leads to an increased pressure on cost. They will be looking for marketing to demonstrate short-term results and may be hesitant to unlock investment budget. This has been coupled with a demand for more: more high quality customer engagement at every touchpoint, more compelling customer experiences, more insight around customers’ changing behaviours . . . a need to deliver more from a tired team. It’s time to be “relentless with our efficiency”, as one of our CMOs put it. In this new reality, CMOs need to build a solid relationship with their CFO. Understand their priorities and objectives, speak their language and build a proper partnership, showing that marketing done well can advance their goals and those of the whole business.
Digital vs. Traditional
Digital marketing has both appeals and perils when viewed through the lens of finance colleagues. Of course digital is a vital element of marketing today and it’s relatively easy to demonstrate a short-term ROI. But maintaining traditional avenues of marketing remain critical for brand building over the long term. For example, the automotive sector has a long sales cycle. Traditional marketing methods are vital to a brand staying top-of-mind until buyers are ready to make a purchase, but that could be three years from now. Replace traditional with digital at your peril! CMOs must educate their CFO and c-suite peers on why both digital and traditional are necessary. In fact, it may be time to stop referring to ‘digital marketing’ all together. Marketing is marketing – sometimes it takes place in the real world, sometimes in the digital world. The danger of separating out ‘digital marketing’ is that it can become siloed, making the customer have to work harder to connect the dots in the purchasing process. Instead, brands need to offer incredible, joined-up customer experiences enabling people to transition effortlessly between the offline and online worlds.
To be agile or not – that is the question
For CMOs of large enterprises, internal financial planning cycles can feel cumbersome, while start-ups aren’t beholden to these established processes. However, there’s always room to experiment and innovate when planning your spend, if you do so strategically. And CMOs have been more agile than ever in recent months. This has been a brilliant time to experiment. Real-time optimisation provides an ability to get quick feedback on which customers are responding to which messages on which platforms, so that campaigns can be refreshed in-flight to maximise their effectiveness. But it’s important to know the right time to be agile and the right time to slow down. Pulling members of the team away from their day-to-day tasks to accomplish ‘urgent’ work may not be the right answer every time. CMOs must continue to balance the need to be responsive with the long-term vision. As one of our CMOs said, “be agile-ish!” This phrase embodies an approach many modern CMOs are taking. It embraces new ways of working and delivering at speed along with the old, marketing discipline, rigour and a focus on delivering a strong commercial outcome over the long term.
Take this opportunity to transform
Critically, even though the world has changed, marketing hasn’t. It remains the growth driver of the business. At its core it’s always been data- and ROI-focused. So, while tactics might have evolved to meet customers’ changing needs and behaviours, demonstrating impact and growing market share are still vital. Marketing has always been one of many choices for the CFO to consider investing in. It’s up to CMOs to demonstrate leadership and to build a compelling case for why now isn’t the time to cut spend, but rather the time to invest, to innovate, to experiment. A great relationship with your CFO will help to drive collaboration, mutual understanding and buy-in to why marketing is so vital right now.