Selling to the CFO: Making the Case for Marketing When Times Are Tough
It’s all too familiar: When the economic horizon gets foggy, the near term for marketing dollars often becomes unclear.
During periods of economic stress and market chaos, like the one we’re experiencing now, marketing departments are often the first to feel pressure to review their budgets and reduce spending. Yes, it’s possible to build brands and market share during difficult times, but that can be a tough sell to the corporate finance department.
Tough, but not impossible. Trust me, I’ve been there, both as a CMO and in running a business. My relationships with CFOs have proven to be the most tried and trusted when weathering economic storms.
Growing and protecting budgets requires collaboration, relationship building, and strategic assessments focused on the overall goals of the company, not just the spend. It’s a dynamic, ongoing process. And business-minded marketers who successfully demonstrate the value of marketing and work with their CFO and corporate finance team as partners stand a good chance of coming out ahead and keeping most of their budgets intact this year.
What are the ways to do that?
Build relationships with the finance team: As a marketer, if your first meeting with the finance team is an emergency session to discuss budget cuts, it’s going to be that much harder to defend the value of marketing expenditures. Ideally, a working relationship with the CFO and the finance team has been cultivated over time, and that department is already well versed in what the marketing department does—not just what it spends; how it contributes to the overall business; and the impact budget adjustments will have. While it may be difficult to avoid adjustments to harsh economic realities, there could be a realistic shot at protecting priority projects or teams.
Understand your audience: CFOs and financial team members are generally masters of accounting, risk-management, capital allocation, cash flow, and financial strategy. But they are not marketers, even though they work at a brand or media company. They don’t live in Salesforce and don’t speak campaign KPIs, which means a job of the marketer is to be a translator. But it’s also important to attain a base-level understanding of the finance department’s distinct language and their objectives. Unless marketing develops a collaborative partnership with finance organization, marketing can be mischaracterized as having too much discretionary budget.
Transparency is vital: Marketers can develop mutual understanding and respect by sharing the granular details of their marketing strategy with the CFO. Many CMOs are wary of this idea, but there’s no need to be. Sharing the various dashboards and attribution methodologies the marketing team utilizes will help the finance team appreciate just how data-driven marketing decisions are. And it will reduce perceptions that upper-funnel tactics like branding are a luxury.
Help CFOs think outside the Covid vacuum: The pandemic has produced all sorts of anomalies in business, abnormal highs and lows in everything from revenue to costs to hiring, not to mention changing consumer behavior. But the pandemic years aren’t viable baselines for evaluating the performance of a marketing spend. Pegging 2019 as the most recent “normal” year has helped our partners make grounded, data-based choices. Partnering with our finance colleagues to identify the nuances of the “pandemic effect” and identifying normalization trends will help everyone align on the appropriate levels of marketing spend to foster growth, retain clients and attract new ones.
Be a team player: Heading into a meeting with defenses up and digging in on every last sponsorship (no matter how expendable) won’t get you anywhere—budget cuts during times of economic headwinds are simply a reality. And the responsibility for cuts falls on the CFO. The more you understand your CFO, the more you’ll appreciate just how difficult his or her job really is. The most successful CMOs come to budget discussions with suggested cuts in hand. Helping financial departments find the reductions they are tasked with implementing gives you a chance to hold onto what really matters.
The economy is all over the map these days, but one thing is clear: Corporate earnings are trending down, and CFOs won’t just sit there watching. Changes are inevitable, and some may be painful. The best way for CMOs to maintain the resources they need to directly bolster revenue, even in the toughest of times, is to be deeply engaged in those strategic shifts, in collaboration, and as an essential part of a team.
All with the CFO’s help.
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