We all want what’s best for our company. However, our teams may execute things differently. Often, we see tension between our marketing and finance teams: the creative and analytical branches of our companies respectively. They may not see the eye-to-eye on the best way forward. Marketing may feel that finance is trying to cut their resources. In contrast, finance thinks that marketing is spending too much without measuring results. To resolve this conflict, we need to find a common language between the two sides.
In this episode, we talk about how you can bridge the gap between marketing and finance through the perspective of a CFO. We share five important questions to ask your marketing team so that you can identify the financial story behind your marketing campaigns. Knowing the answers to these questions is vital data that you need for future decisions.
If you’re an entrepreneur looking to bridge the gap between marketing and finance, then this episode is for you! Start asking the right questions so you can get the results you want.
Here are three reasons why you should listen to the full episode:
Discover the five questions you need to ask about your marketing process from a CFO’s perspective!
Understand the importance of each metric and hear examples of how to apply them.
Learn the benefits of bridging your marketing and finance process.
Resources:
Visit Christina Sjahli’s website for more stories on entrepreneurial journeys to success on the Her CEO Journey podcast.
Chat with Christina and set up a time here!
Download this Action Guide to help you understand the financial story behind your marketing campaigns.
Episode Highlights
[00:02] The Common Gap In Marketing And Finance
There is often a battle between marketing and finance teams.
We often think that analytical and creative minds cannot mesh. But to succeed, we need to start bridging the gaps between the two.
The tension between the two groups comes from a lack of common language.
“The way I see it, the real gap is really about having a common language, a common language between marketing and finance, a common language that allows these two functions to see the impact of marketing campaigns on financial results.”
Marketing plays a role in financial results.
[02:45] Strengthening Your Marketing From a CFO Perspective
A business needs both a strong marketing strategy and sustainable finance.
Marketing is one of the key drivers of earnings, growth, and future value.
“Brand and marketing contribute to earnings, growth, as well as the future value of a business. And the future value of a business is really important, especially when you are thinking about exit strategy, when you are thinking about getting financing.”
Meanwhile, finance measures the effects of your business activities.
Start asking the right questions so you can translate your marketing strategy into a financial plan.
[04:09] The First Question: Business Analysis
The first question you ask is if they know how you analyze your business.
Your marketing team should look at marketing results through proper segmentation.
“So here is the question you need to ask: Do you know how we analyze our business? As much as possible, you want your marketing team to dissect the marketing result using the same segment.”
You can analyze through geographic locations, market locations, product groups, and client types.
If you’re launching a new product or service in an area, you would want to know your business’s performance in that area.
[05:33] The Second Question: Number of Prospects
Next, you need to know how many prospects enter each stage of the customer journey.
“If you know how many prospects at the different stages, this information provides insight on how successful each marketing campaign is. Plus, give you an idea on prospects sitting in your pipeline.”
Through this, you’ll know how successful each campaign is.
You can also see the number of prospects you have.
This data helps you decide on whether or not you’ll continue to invest in the specific campaign.
[06:31] The Third Question: Lead To Client Conversion Speed
How fast do leads become clients?
Knowing how fast a campaign can generate clients can help you forecast revenue, production, and inventories.
If your lead conversion is fast, you have to see if your production can keep up with the demand.
If it’s slow, you can see if you want to invest more in the campaign.
Alternatively, you’ll also need to make adjustments to your production and inventory.
[08:12] The Fourth Question: Conversion Rate Per Marketing Campaign
How does each marketing campaign bring in leads and make them into clients?
You’ll know how each campaign contributes to your revenue and predict future behaviour.
If a campaign isn’t doing well, you can decide to adjust it or invest more into it.
Alternatively, if it positively impacts brand awareness, you can label it as future conversions to revenue.
If you know your conversion rate throughout all stages, you know how much you need to invest to reach your goals.
[09:35] The Fifth Question: Bringing the Right Audience
Does your marketing campaign bring in the right audience?
If your campaign brings in an audience that you didn’t initially target, this is an opportunity to dig deeper.
You can target a new audience or adjust your campaign.
There is always a story behind a metric.
“There is always a story behind a metric. A negative outcome from the outside can be a new opportunity if we understand the story.”
[10:24] Insights to Bridging Your Marketing And Finance
If you assess your business with these five questions, you’ll understand the reasons behind your revenue growth or decline.
You will also gain insight to predict accurate revenue forecasts.
Knowing the effect of marketing campaigns can guide strategic investments for future campaigns.
Remember that finance is not a standalone process. It informs and analyzes your other business processes.
Powerful Quotes
“A business won't be sustainable for years to come if there is no solid financial process in place because finance measures the effect of all business activities.”
“You will gain a clear picture rather than gut feeling on the performance of each campaign and the impact of each campaign on revenue growth. This information can also help you decide if a marketing campaign doesn't perform well, is it worth tweaking and putting in more investment?”
“When you know the conversion rate from one stage to another until the end, you can use this information to determine how much investment you are going to need to achieve specific outcomes.”
“You will know exactly why your revenue grows or declines and you have data to back it up. More importantly, you gain insight to accurately predict future revenue growth.”
“As a founder, you now know precisely the return on investment for each campaign, so you can strategically plan for future marketing spending. You can ask your marketing team to go as granular as you need them to be with their metrics. As long as you know the information you need to make the strategic business decision.”
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Bridge the gap between marketing and finance through the five questions you need to ask your marketing team. These questions from a CFO perspective will help you make the most informed and strategic business decisions. If you enjoyed today's episode of Her CEO Journey Podcast, then hit subscribe and share it!
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To fueling the life you want to live,
Christina