September 12

On Alignment between Marketing and Finance

Marketing Strategy

7  comments

Many marketers are quickly approaching their favorite time of year.  Okay, not really. I’m of course talking about budget time.

When I see the challenge that marketers face when it comes to getting their budgets approved, I wonder why it has to be so hard?

Last year, I highlighted a report  by MarketingSherpa which concludes that marketers need to do a better job capturing and communicating their value.  According the MarketingSherpa research, "…only 17% of B-to-B marketers we queried were sure their CFOs understood the value of lead generation programs."

Last week, I read a short BtoB article by Carol Krol that shows that this continues to be a challenge. Her article summarizes some new research by the Association of National Advertisers in conjunction with Marketing Management Analytics.

Krol writes, "The study found that a relationship between marketing and finance is often lacking. Sixty-one percent of marketers surveyed for the study said there is “some” cooperation between the two departments when establishing metrics and methodologies for measuring marketing ROI, while only 22% said there was “full” cooperation."

Each discipline is vital to the success of the company and they must work together as team. But I believe that most of our colleagues in finance don’t fully understand marketing. It’s not a surprise that financial executives still view marketing as an expense, a.k.a. cost center, rather than viewing it as an asset that creates revenue.

As marketers we need to do more to educate our peers on the value of marketing. We need to act as one team and seek to understand each other better and learn each other’s language. Bottom line: it’s the numbers.  So why not begin with that? 

I think the late Dale Carnegie has a great quote in his perennial best seller, How to Win Friends and Influence People that summarizes my point.

He writes, “I go fishing up in Maine every summer. Personally I am very fond of strawberries and cream; but I find that for some strange reason fish prefer worms. So when I go fishing, I don’t think about what I want. I think about what they want. I don’t bait the hook with strawberries and cream. Rather, I dangle a worm or a grasshopper in front of the fish and say: “Wouldn’t you like to have that?” Why not use the same common sense when fishing for people?”

Related post: Budget Wars: Sales & Finance vs Marketing

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing. He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. Many of the Marketers and Finance people I’ve known think about their respective areas so fundamentally differently that it isn’t surprising the CFO can’t understand the value of various items on the Marketing Budget. The excuse is that Marketers are creative types. This is a good thing, when used properly. Unfortunately, CFO’s have seen all too many cases where a creative program got the full speed ahead without being tested, produced no quantifiable benefits and basically looked like a waste of money.

    If all Marketers took a view that ideas needed to be tested and needed to produce some tangible outcome before the big bucks could be spent, they’d have a lot easier time with CFO’s.

    These outcomes are Tragically Knowable. See my blog post for more:

    http://smoothspan.wordpress.com/2007/09/10/marketing-is-tragically-knowable-should-i-use-social-networks-like-facebook-for-marketing/

  2. Also, I think financial executives should invest time to understand how their marketing team works by sitting in on meetings, observing marketing programs in action and participating in the planning process.

    Marketing is tough and often financial people (those who haven’t done it) can’t fully appreciate the challenges in a vacuum. They need to get involved especially when they are supporting a more complex sale.

    In addition, I think that financial executives should seek to understand how well their sales and marketing teams are working together to generate revenue. I do think that the smartest financial executives realize that friction and poor collaboration costs money.

  3. Some CFOs understand that most direct marketers are all about measurability, accountability, and ROI. Others operate with a bias against all types of marketing, including direct marketing. Unfortunately, many people with biases never change. All we can do is stay focused on the right agenda and make a solid business case for our programs around the organization.

  4. Great post. In the end, it’s all about showing the CFO that Marketing creates revenue. Thankfully, B2B makes that possible, especially with all the lead generation and scoring software out there..

  5. Brian’s comment about sales and marketing working (read NOT working) together is right on but it is not anyone’s fault; it’s the nature of two disparate types of people. Being a quota based sales person fosters fierce individualism and self-recognition. Sales people are measured and constantly pitted against each other, not as a big fuzzy group like marketing. If a territory is underperforming you (and everyone at the sales meeting) know exactly who is to blame.

    Taking this a bit further you will never get a sales person to admit that marketing found an opportunity that they didn’t already know about. Even though it is simple to track a lead from its early stages to closure using CRM, what is not tracked is the sales person’s perception that they were singularly responsible for the closure…”marketing never gives us anything”.

    I have not only seen this behavior, but frequently practiced it myself. I have been a quota based sales guy selling high-end enterprise gear for years. I found and closed every deal!

    Once again, no blame here just an honest opinion about how sales people think and act.

    We don’t need to fix the CFO’s perception, we need to fix the sales reps perception and make him carry our flag.

  6. It’s nice information which have provided by you,The very first ingredient of marketing accountability is alignment between CMO and CEO.we can say here (alignment between marketing)and alignment within the marketing organization itself.

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