When talking about marketing and finance, we’re usually talking about their differences. Marketing is creative, while finance is by-the-book. We never talk about all the similarities finance and marketing share, and that contributes to the divide.
The CFO’s mandate is to drive efficient growth despite economic and business hurdles.
Today’s CMO is tasked with driving digital transformation, owning the customer experience, and becoming fully accountable for revenue growth.
It’s the common denominator between marketing and finance, and we’d argue that efficient growth and revenue growth aren’t mutually exclusive. Finance certainly cares about revenue growth. Just as marketing strives for efficient growth.
High-growth organizations are three times more likely to have collaborative marketing and finance teams. What’s holding you back?
Should We Be Talking About Growth Hacking in a Financial Crisis?
This financial crisis is affecting organizations differently, and to varying degrees, but it hasn’t changed the fact that if you want your business to be successful you need to have a growth mindset.
Marketing activities sometimes have a broad focus; for example, increasing brand awareness is a great goal, but how does that translate into action? Growth hacking involves setting highly defined, achievable goals with the specific target of growth. In the case of building brand awareness, social marketing could focus on promoting thought leadership or set a target of increasing social sharing by 25% within the quarter.
Sean Ellis is referred to as the Godfather of Growth Hacking. He suggests that every strategy executed, every tool implemented, and every technique developed should come from an ambition to grow.
The financial crisis didn’t change the need for business to grow. If anything, it amplified it to the level of a bullhorn. Growth hacking is a discipline that should be nurtured by the marketing team, but it can be organization-wide.
How Can Marketing and Finance Hack Growth Together?
1. Build Growth Ladders and Remove Anchors
A big part of achieving growth is creating the right conditions. It’s a bit like sailing – you need to take advantage of strong winds and you won’t get far with your anchor down.
Gartner recommends CFOs focus on creating programs that provoke growth and innovation such as growth investment committees or dedicated innovation funds. Anchors to remove are things that slow down growth such as stiff hurdle rate requirements.
For a CMO, they need to direct attention to program performance. Programs that perform well should be scaled and analyzed for further optimization. Any programs that are under-performing need to be pulled and resources reallocated.
2. Create a Holistic View of Investments
Finance has their own financial management systems, but what about marketing? As one of the top-spending departments within a company, it’s critical for finance to have a clear understanding of when, where, and why marketing investments are made.
As the largest source of discretionary spend, marketing’s budget is often first to get cut during lean times. But with full budget visibility, the CMO and CFO can work together to see the impact of different budget cuts.
Creating budget visibility is easier said than done, especially when most marketing spend is siloed in a myriad of spreadsheets and separated from finance’s actuals. But that was before you knew about Allocadia. Our budget management and strategic planning platform helps marketers pinpoint the status of their budgets and leverage performance data to confidently invest in the right programs. Sync directly with finance’s systems and know instantly – and accurately – what’s forecasted, committed, and spent. Instead of routing around in spreadsheets, answer the CFO’s questions with just a couple clicks.
3. Agree On and Set Revenue Targets and KPIs
A significant aspect of growth hacking is measuring success. There needs to be agreement on how much marketing contributes to the organization’s revenue targets and pipeline early in the planning process. This helps marketing understand its share of the load, and plan accordingly. Usually this is set at the start of a fiscal year. But for the rest of 2020, we recommend setting and agreeing to new targets at the beginning of each quarter.
At the same time, it’s worthwhile for the CMO and CFO to agree on how marketing’s contributions should be judged. These vary from organization to organization, but can be things like brand awareness, market intelligence, customer loyalty, and sales enablement. Establishing goals and how they’re measured early on, lets marketers track against these strategic targets and make adjustments with more or less campaigns and activities as needed.
This leaves no ambiguity about which metrics defined effectiveness or how marketing created impact for the business.
The Dream Team: Marketing and Finance
Driving revenue, driving impact, driving growth: marketing and finance may achieve these on their own, but not to the same degree as when they work together. We know high-growth organizations have strong marketing and finance alignment. We know it’s critical to create alignment. And we know that the time to act is now.
We’ll ask again – what’s holding you back?