In B2B Marketing, the CFO May Be Your Most Important Customer
Many B2B marketing managers believe that their primary customer is the Sales VP, or perhaps the end-customer, or even the CEO. While these are very important constituencies, you shouldn’t forget the person who may have the most influence over your career – the CFO.
My last blog post talked about how to get your share of the 2017 marketing budget, using several different budget allocation methods. However, none of these methods will work unless the CFO has faith that whatever you are spending contributes to revenue. This is what I call the “marketing as investment” model, instead of the traditional “marketing as expense” model.
Here are some things you don’t want your CFO to say to the CEO about you or your department:
- Those guys spend a lot of money but I have no idea what they are accomplishing.
- Why should we give marketing more budget if they can’t show better results?
- Why is the sales team always complaining about the marketing department?
- We have to cut the budget – let’s start with marketing since they are such a large expense.
- Every time I ask marketing what they are doing, I hear a bunch of gobbledygook!
To make sure this type of language is never used to describe you, let’s look at what CFOs are looking for from their marketing departments. As you can see, four out of the top-six goals relate directly to measuring the effectiveness of B2B marketing spend and activities as a driver of sales pipeline and revenue.
Note that the fourth goal listed is to achieve non-financial goals (i.e. brand awareness) but even here I would argue that the reason we spend time building the brand is to make it easier to achieve revenue. I’ve never met a CEO or CFO that would trade some of their revenue for a stronger brand (or for almost anything else). In the end, it comes down to the marketing department’s ability to increase awareness, generate leads and facilitate sales, all in the pursuit of more (profitable) revenue.
So how do you impress your CFO and ensure not only a favorable impression but more important, the necessary funds to accomplish your mission? Here are four strategies:
- Understand your customer. Most CFOs have a set of challenges and objectives that are not the same as yours. See the world from their perspective and you are more likely to win the perception game.
- Tightly align with sales. Creating a service level agreement (SLA) to outline the processes, expectations and deliverables of both departments – will go a long way towards satisfying both the CFO and CEO. Chances are, if the sales team is happy with marketing, the executive suite will likewise be happy.
- Revenue…revenue…revenue. Whenever you can do so, shift the focus of the discussion from activities (expenses) to revenue (investment). Investments in revenue are much more palatable than increases in spending, so modify your language accordingly.
- Measure what matters. As a B2B marketer, you no doubt understand the importance of capturing all types of performance metrics. But the ones that matter most to the CFO will all point to how what you do, and what you spend, contribute to revenue. That is why our lead-to-revenue (L2R) modeling process always starts with revenue targets and works backward to set goals for inquiries, awareness, website traffic, and so forth.
I’ve worked with a couple of CFOs that had such a fundamental misunderstanding that they never could see the value in what their marketing department did. Fortunately, these types are not common and if you follow the above advice, you will not only have a more satisfactory working life but also a much healthier marketing budget.