If the title of this made you laugh or cringe, you’re not alone. Finance doesn’t always see marketing as a driver of business growth, and marketing doesn’t always make their case very clearly. It’s a relationship that has been fraught with tension for many years.
However, business success in 2021 means aligning these two critical functions with a growth mindset. As we start to exit this pandemic rollercoaster, it should be clear by now that finance and marketing have equally important roles to play when it comes to company growth. Finance, with their company-wide view into budgets, plans, and performance is an incredible resource for marketers. And all of marketing’s programs and campaigns are critical to delivering that business growth.
Here are the three key ways that marketing and finance teams can come together to create a positive business impact.
If you demonstrate a positive attitude toward improving this inter-team alignment, your team will adopt that outlook as well. It’s on leaders in both groups to set a good example and create a trickle-down effect of mutual respect and collaboration.
Start building a relationship by asking questions. Marketers can open up the dialogue around performance, and ask what their financial partners care about most. Ask what key benchmarks the company is using for metrics like spend versus revenue. Take time to understand their strategy, their revenue targets, and then think critically about how your marketing programs can help achieve those targets.
The next step is learning more about each other’s internal processes and timelines. You can make this discussion smoother by first understanding the level of detail finance needs about marketing programs and spend. Reconciling the two departments can be challenging enough without adding information that’s not critical for inter-team discussions. Work together to establish the right amount of detail so nothing is missing, but also so no one is overloaded by data. Information requirements may differ between finance and marketing, but both teams need to get on the same page to make their respective decisions.
At the end of the day, no company can operate successfully without a strong marketing plan, and marketing plans require money. If marketing and finance have a solid interpersonal relationship, it’s much less daunting to reach out and use one another as resources.
It’s a delicate balancing act between moving quickly on new market opportunities while keeping on top of budgets so you don’t overextend on commitments. But I’m telling you: this balance is possible. And it starts with marketing and finance becoming planning partners.
The cleanest way to start is to create a closed loop between marketing plans, forecasts, and actuals. It also helps to have a clear investment taxonomy to foster alignment between different data sets. This will help both teams know where every dollar is, at any given moment. When teams can merge views of committed spend and future spend plans, marketing can quickly and confidently make adjustments knowing how and what those pivots will impact in the business.
Finance can also be an invaluable partner when it comes to scenario planning. The point of scenario planning is vetting options early so you can pivot quickly based on a business change or market opportunity. And finance’s opinion on how the business would want to approach these scenarios from an investment perspective is incredibly helpful. It’s not just a matter of Plan A, B, or C based on budget, but asking questions like:
Because what finance is likely to ask is:
And scenario planning isn't just about looking ahead, it's about tracking the impact of a scenario that’s triggered. This way, both teams have a clear understanding of what happened with a scenario and can use it for future planning.
Finance brings to the table the knowledge of the company-wide budget, where roadblocks lie, and the means to trigger the release of funds. At its core, scenario planning is a joint-team exercise that identifies when to pull which levers to drive the most significant impact.
COVID-19 has brought unique challenges to everyone - personally and professionally. In the business world, challenges can become opportunities. It’s a chance for us to pause and take a critical view of how we were operating. And then question if it’s leading us toward where we want to be.
We can strive for more clarity, more efficiency, and double-down on what we know is successful. Regardless of which department you’re in, it’s a chance to break the status quo and stop investing in the same things year after year out of a sense of obligation. If it’s not bringing in returns, stop investing.
For example, Juniper Networks identified a massive inefficiency within their marketing investment processes. Their teams aligned to make sure that every dollar they spend is aligned to company priorities. Now their team has the visibility to see that 100% of marketing spend is aligned to meet strategic objectives, and they have the flexibility to reallocate budget based on changes in the market and needs of the business.
Be proactive in communicating the impact associated with investments, because that clarity will help both teams understand why investments were made. Budget decisions are inevitable, and marketers and finance need to be partners in that process. The better marketers know their budgets, what’s needed to drive impact, and which marketing programs will best support corporate goals, the easier those decisions become. And the better the inter-team relationship will become when everyone is aligned and accountable to the same metrics.
Change is never easy. But looking at change as an opportunity to improve and to reassess is how we grow – both as individuals and as organizations. In my experience, an improved relationship between marketing and finance can serve as a catalyst for larger organizational changes and growth. Marketing and finance are stronger together and if you’re not on the same page today, it doesn’t mean you can’t be tomorrow. So take that first step today!
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