My dog doesn't fetch. It’s a retriever that doesn't retrieve. In many ways our trips to the dog park resemble a CMO submitting a budget proposal to his CFO. That budget, like my dog’s ball, isn’t coming back, or if it does, it’s late and torn apart.
Not fetching is not my dog’s fault. It’s mine, for not properly teaching the dog that returning the ball will result in greater reward, getting thrown many more times. Similarly, as marketers, it is our fault for not instructing the CFO on how our marketing proposal will provide returns for the company.
Like dogs and their owners, finance and marketing need to learn how to communicate. As marketers, we cannot expect the CFO to understand what we are trying to accomplish if we do not use terms that finance can understand from their perspective. Using terms like mindshare, awareness, and – ugh! – ‘marketing investment’ are anathema to finance. They are unquantifiable, unreportable, and in the case of ‘marketing investment’ mean completely different things to a finance executive than a marketing executive. (An ‘investment’ has a specific reporting requirement according to GAAP rules, it isn’t simply a synonym for ‘budget’.)
Of course, mindshare, awareness, and visibility are critical. So are a number of other objective measurements marketing uses to benchmark and improve. Cost Per Page View, Cost Per Lead, and similar measurements are useful, but only internally to the marketing team to test, adapt, and improve. And I've written before about my own concerns about Return on Marketing Investment (ROMI).
To build a better relationship with finance, marketers must do what we do best – communicate. We must work with finance to determine the most useful metrics to the CFO to help us to explain and defend our budget strategy and – this is critical – the way it will be measured. Finance measures revenue (EBITDA), growth, and costs, among other similar 'bottom line' numbers. If you cannot produce numbers to illustrate how your plan will contribute to these figures, you will lose your credibility and your budget. Use your internal measurements for tactical improvement, but then translate the results into metrics that reveal, say, Time to Payback (breakeven), Customer Acquisition Cost, and Customer Lifetime Value, among others. Agree with finance the target numbers for these metrics and ratios, and then build your plan to grow to meet them.
The CFO is naturally protective, growling often and bearing its teeth to protect the cautious spend of your company. But with a little communication, the CFO can become man’s, er, marketing’s best friend.