In today’s business landscape, marketing and finance teams are more interconnected than ever before. To successfully achieve peak financial performance, they need to be able to work together effectively. The bond between marketing and finance teams is a critical factor that can shape the success or failure of a company.
The theme of Planful Perform23 was “financial performance management is a team sport”. Rowan Tonkin, CMO of Planful, and Dan Fletcher, CFO of Planful, took the stage to discuss the essential trust and collaboration required between the CFO and CMO roles. During this insightful session, they explored how agility in planning and budgeting can help drive business success, the challenges and friction points faced by CMOs and CFOs, and how aligning incentives can help Marketing and Finance overcome challenges, work together as a team, and build a strong alliance.
A strong relationship between a CFO and CMO is crucial. In order for the company to be successful, these two leaders must work together as a team, and both parties need to be on the same page. Dan and Rowan discussed how the key is frequent communication and a shared understanding of each other’s roles and objectives.
Typically, when finance looks at a marketing budget, they tend to see it by GL code, cost center, and department. Marketing views it by goal, campaign, or initiative. It’s important that marketing communicates their initiatives with finance in a way both will understand. Rowan emphasized the importance of marketing leaders understanding financial metrics, as well as elevating their conversations to match the level of discussion with the CFO and board.
“I dont want to be talking to Dan (CFO) or my CEO about operational metrics,” Rowan said. “As CMO, I want to elevate the way that I have outcome based conversations, and that’s often using their language which is typically commercial and financial metrics.” He added that this allows marketers to better understand how their decisions contribute to overall business performance. Ensuring that both departments are speaking the same language and understand each other’s needs, goals, and initiatives is essential to success.
“There’s a lot of humor between the CFO and CMO relationship when it works out well, and a lot of angst when it doesn’t,” said Dan.
For CFOs, building trust with the marketing team involves partnering with them on metrics, and insights before taking them to the CEO or board. This approach ensures that everyone has an accurate understanding of results and promotes a sense of ownership over outcomes from both sides — which is essential for successful collaboration between finance teams and marketers alike.
Rowan shared that marketing budgets are flexible levers that can be adjusted in response to economic ups and downs. The ability to quickly respond to changes in market conditions helps companies remain competitive without sacrificing long-term success. By quickly pivoting strategies, organizations can stay afloat during difficult times and address unexpected changes head-on.
Dan emphasized the importance of collaboration between CMOs and CFOs to ensure successful planning and budgeting during periods of uncertainty. Having open lines of communication allows both teams to identify potential risks early on so they can work together on crafting strategies that anticipate or mitigate those risks. This way, teams can better prepare for any shifts in the market while still focusing on their core objectives and long-term goals.
Having the same incentives and targets in place can be an effective way to improve the CFO-CMO relationship and drive business success. CMOs and CFOs who have shared goals that are mutually beneficial can help foster a more collaborative relationship between the Marketing, Finance, and the rest of the business.
To ensure that incentives are aligned, marketers need to be commercially savvy and involve finance in their conversations and planning processes. This includes providing regular updates on performance, budgeting, ROI, and other metrics that demonstrate how marketing activities are contributing to overall business objectives. When marketers understand financial metrics they can better explain why their activities are necessary for achieving certain goals. This helps build trust with finance teams who will feel more comfortable investing resources into campaigns or initiatives proposed by marketers.
Dan emphasized the importance of finance professionals seeing themselves as strategic business partners rather than scorekeepers. By understanding marketing’s impact on the top line, they’ll be able to provide input on decisions from both sides of the equation – marketing initiatives as well as financial investments – rather than simply rejecting marketing spend outright without considering the benefits.
Aligning incentives between CMOs and CFOs is critical for fostering effective communication and collaboration. Doing so promotes a unified atmosphere, allowing both teams to pursue shared goals and achieve peak financial performance even during times of uncertainty.