Marketing without finance is like Holmes without Watson. You can’t get good results from your campaigns if both are working in silos.
Why? Because marketing requires enough spend to support its strategy, and finance (whether that's a team or one person holding the purse strings) needs to understand the benefits of the plan to justify and release the investment.
Clash of the departments
This is unhealthy for business. Marketing and finance need to share the same commercial vision and to appreciate each other’s value, so they can work together to track sales trends, budget accurately for campaigns and allocate resources efficiently.
All of the above is essential for financial success because the business gains a cohesive strategy where growth happens in the right areas. The key to achieving this result lies within effective communication and a deeper level of understanding.
Creating an alliance between finance and marketing
Success can only happen when marketing and finance understand each other, the overall business objectives and how working together can galvanise outstanding results. The following tips will help you achieve this.
A monthly meeting that matters
Both sides need to have an initial sit-down meeting – to strip away perceptions that finance is there to block expenditure or that marketing isn’t appropriately measured on performance.
This can be achieved by combining their knowledge of the business to agree on:
- which areas of the business they both want to grow;
- how the growth plan will dovetail into the overall business plan;
- what growth means in terms of profitability impact; and
- how much is appropriate to spend to achieve this growth
With these particulars hashed out, finance can justify and plan for the initial spend while factoring in the impact on the rest of the business to support growth. And marketing have the backing needed to move forward with a valuable strategy. Note: both teams or individuals need to be realistic in terms of the return they expect from that investment and the timescale in which they will achieve it.
These inter-departmental meetings need to be a regular occurrence, so communications don’t break down and both sides can respond to strategic changes quickly.
Finance contributing to the marketing strategy
Your marketing department needs your input – it’s vital to building and running successful campaigns. Unless you talk and work together, campaigns are doomed to fail and tensions arise.
As a finance team, you need to be emotionally invested in marketing, to be bought into the vision and to have the opportunity to add your input to the strategy.
Communicate with marketing and share:
- your ideal growth targets for the business in terms of clients and sales;
- what is appropriate to spend to achieve these targets;
- which services or products are the most profitable;
- how the client spend is split across your products or services; and
- which clients or regions are the most profitable.
This has a huge added benefit: finance has unique insight into the clients, products or services. You can use this knowledge to help marketers create more targeted and lucrative campaigns.
Share success stories
Without evidence of marketing success, a financial director will simply see the expenditure as a vacuum on the business’ profits. And then they'll do what they’re paid to do: cut costs to save money.
Give marketing the opportunity to share the success they gain from campaigns – like data on how much website traffic was generated from last month’s campaign, and the subsequent percentage increase in sales; or how creating and advertising a free tool drove new customer enquiries. That way, finance have the evidence they need to justify a healthy marketing budget.
The far-reaching benefits of teaming up
Finance and marketing can use this partnership to catapult performance and improve job satisfaction.
Marketers gain:
- a budget to spend how they wish – they don’t have to repeatedly ask for approval;
- clear timescales, so they are not under pressure to deliver to unreasonable deadlines;
- autonomy to make their own decisions once the budget is approved;
- an understanding of the results the business expects from the start;
- an ability to track the results and ensure their plans evolve accordingly as they progress.
Finance gains:
- certainty of expenditure, so they can accurately budget for the business’ cashflow;
- extra time, as they don’t need to constantly review expenditure when the initial budget is set;
- agreed KPIs from which they can measure success; and
- the ability to plan changes for the rest of the business when growth is delivered.
All these benefits boost the business in dramatic ways. The relationship between the two teams or individuals is improved, driving their performance and the value they bring to the business. Because of a cohesive strategy, growth for the business becomes much more certain and future-proof. And appropriate funding in place means planned growth is adequately supported.
In other words, everyone wins. But to get to this sweet spot, it’s essential that you have a solid marketing strategy in the first place.
About the author
Mike Pye is managing director of the marketing consultancy, Mike Pye + Co.
Helen Fleet, freelance FD, also contributed to this article.
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