We’ve discussed how marketers can achieve alignment with their CEO or members of the board, but in this episode, Avnita shares how to create that same alignment with your CFO. Whether you feel like you have a good relationship with finance or are building a bridge for the first time, Avnita shares crucial steps to cultivating a better working relationship. Listen for more about the importance of understanding each person’s role and how to gain mutual trust.
Stay in Your Lane
When the finance team comes asking questions to the CMO about marketing spend and decisions, there is a natural defense that comes up, feeling like someone has entered your lane. Avnita has experienced this firsthand as a CMO, but has learned to take a different approach:
“I took a step back and want to really have that dialogue. To have a sit down with the finance team….and talk about what marketing does and how marketing spends money. So it’s education about all marketing functions.”
Like other areas of the business requiring capital, marketing is an investment, and the finance team is responsible for optimizing and ensuring the various departments are good stewards of the company budget. It’s less about how you are doing your job and more about a general understanding of the numbers and how money is being spent. It’s important for CMOs to understand that the intentions of the CFO are good, and figure out the needs of the CFO to make the relationship less contentious.
From Avnita: “As much as we need to educate them on how marketing works and how our spend works, it’s equally important for us to understand what it is that they’re pleased with. What are they asked for? How are they reporting it or tracking it?”
Typically, annual marketing budget allocation and planning are executed in a silo by the marketing organization and then presented to the rest of the C-suite. According to Avnita, this creates more questions and often results in re-work and frustration. As a solution, she suggests involving the finance team in planning, creating alignment and setting expectations upfront. Avnita explains:
“So when you’re planning your budget for the year, it’s so critical to have that partnership, to work with them, to provide them early rendering or early drafts of your plan and really collaborate with them…the closer you keep the finance team, the smoother it goes in the end.”
Part of the planning process with finance is to come up with a common vernacular, and Avnita advocates for developing “activity codes,” or a set of 5-10 numerical codes, each representing a specific bucket of marketing activities. Rather than attempt to line-item out a long list of spend items that don’t have meaning to the finance team (creating more questions), finance can easily see which activities are over or underspending.
Ultimately, having a friend in finance creates an advocate for the CMO outside of the marketing department, which is critical when presenting a united front to the CEO or board.
“You now have advocates in the room, agreeing to the fact that yes, we should invest in marketing because I’m very clear on exactly how they’re spending the money, where it is going and what benefit it’s bringing to the business,” said Avnita.
For more of Avnita’s insights, listen to Episode 324 of SaaS Half Full.