Traditionally, CFOs haven’t been particularly involved in marketing. But lately, things are changing.
In most organizations, marketing spends a significant portion of a company’s budget each year and everyone trusts that the money spent is helping bring more money in. CFOs have often been stuck in that phase of hoping the money spent is accomplishing something positive for the company’s revenue, without knowing for sure.
That’s a problem, since 90% of CFOs say their most important job is measuring business performance, and only 47% of them think they’re pulling it off. Any part of the company that’s soaking up funds without being able to show a strong ROI is contributing to that uncertainty.
Marketing departments now have the means to do better, and the involvement of the CFO has been shown to help. McKinsey has found that in organizations where the CFO works with the CMO to help drive focus to metrics that show how well marketing campaigns are achieving revenue-related goals, 10-20% of the marketing budget can be recovered and put toward either additional marketing activities or the company’s bottom line.
Think of what you could accomplish with that 10-20%.
It’s high time CFOs start seeing the marketing department as an opportunity. Effective marketing can increase sales and profit – that’s the whole point. But it has to be done well and CFOs need to be able to see the results. Marketing performance management software can help achieve this.
Marketing Performance Management Improves Measurement
The only way for marketing departments to show their true worth is through improved measurement. If CFOs are going to view marketing as a valuable asset to the company rather than an expenditure that may or may not be paying off, marketers need to start bringing the data. And not blog post views and social shares, but revenue-driving metrics.
Marketers need to upgrade to a better class of analytics that show the relationship between marketing activities and revenue. The only reason for a CFO to care about a re-tweet is if you can connect it back to a sale. To track a lead from the marketing activities they participate in from the awareness stage all the way through the point of sale and beyond, you need a way to connect the data you already have.
82% of CFOs have said they recognize the importance of integrated information across the company, but 24% worry it’s a challenge beyond their means. Marketing performance management helps connect all the data related to marketing, sales, and customer support so you can finally see the connections between it all and start calculating the ROI of all your customer-facing activities.
Better Data Leads to More Informed Marketing Planning
Marketing analytics demonstrate results. That’s the primary use most marketing departments see for them, but it should really be treated as one small part of the larger equation.
Measuring success matters in terms of proving the worth of the marketing department’s efforts, but what should matter more is what the marketing analytics can tell you about what’s working, what’s not, and what you can be doing better.
Marketing planning typically takes into account the marketing trends of the day, the experience of the professionals doing the planning, and a lot of assumptions about what your target audience will respond to. All of that’s important, but the data you have on what’s helping produce the most ROI should be given a top spot at the table when creating marketing plans moving forward.
When your business shifts to data-driven marketing planning, you can count on improved results. And if the marketing analytics you’re using to make those data-driven decisions are the ones tied directly to revenue, those improved results should come in the form every CFO cares about most: more gains per amount spent.
Marketing Forecasting Helps You Make the Next Best Move
While every CFO has to care about the past spending and profitability of the business, the most successful CFOs are always looking toward the future. Marketing performance management provides marketing forecasting based on past data that can help marketing departments set clear goals, make better plans, and know what to do now for better results in the months to come.
Optimizing your marketing plan for improved performance requires using past data to make informed decisions about what will happen in the future. If you don’t have a good way of seeing what’s working now – and specifically working to bring in revenue – then the best you can do is guess at what to do next.
Clear marketing analytics that allow you to track which specific marketing activities and journeys are leading to the most revenue clearly show you your next best move. You can stop guessing and start making more money for less. That’ll make BFFs of any CMO-CFO duo.Icon made by Freepik from www.flaticon.com is licensed under CC BY 3.0