How to Align Marketing with CFO Expectations

Most CFOs look at marketing as an expense item. Some look at it with disgust. Here are 4 ways I make CFOs love marketing: 1. Deeply understand the P&L CFOs are numbers people. They often think that finance is the lifeblood of the company (rightfully so) and everything depends on the finances to be successful. Many CMOs are NOT numbers people (though this is changing), and so they don't "get" each other. If a CMO (or their agency partner) really sits down and deeply understands the company's costs, run rate, cash flows, and EBITDA, they foster a lot of trust and alignment with the CFO. Maybe the CMO realizes that big sponsorship or event doesn't actually make sense after all. 2. Cut waste A lot of marketing (especially advertising) is wasteful. It does not nor will not ever generate revenue. Sometimes the CFO wants to cut it all because they can't rely on the way marketing is measuring success, but, all they see is that big hairy expense item creeping up without a commensurate increase in revenue. Marketers need to identify what programs are bleeding without producing ROI. Strict scientific rigor and objective measurement systems are key here. Once I sharpen my pencil and start talking about cutting costs, most CFO's eyes light up. 3. Optimize toward margin Most businesses in 2023 are profit-conscious. In many cases, it's the CFO's job to manage toward a total margin profile or EBITDA target. Not too long ago this was a "just grow revenue and everything will sort itself out" mentality, but, that's less common these days (and good riddance I say). Marketing can optimize toward contribution margin rather than revenue. REALLY smart marketers optimize toward incremental lifetime margin (LIMR), which requires deep understanding of the customer, the product mix, and what is the optimal spend point to hit that magic number. 4. Prove out ROI I can't tell you how many times I've sat on a meeting with a CFO, walked them through how we got to a scientifically measured ROI, and have them say "Well why don't we spend more?" CFOs ultimately want the company to be financially secure. If marketing can reliably and verifiably drive incremental revenue, then the CFO becomes best friends with the marketing team, and looks for ways to get them MORE budget. At the end of the day, it's about proof of impact. Marketing's job is to generate ROI. Period. Prove that to your CFO and they'll love you. How do you foster alignment between finance and marketing in your organization? If this sounds like a pipe dream, reach out to me and I can help. #marketing #finance #growthmarketing

🚀 Building on CMO-CFO Alignment: Practical Steps for Success 🚀 In my last post, I shared three key philosophies to foster a strong partnership with Finance. I thought you might appreciate some practical steps to implement these philosophies. Step 1: Establish a Consistent, Seamless Communication Framework Here’s how to set it up: 1. Regular Check-Ins: Schedule consistent meetings with your Finance business partner to discuss ongoing projects, budget updates, and strategic priorities. This keeps both parties informed and aligned. 2. Common Language: Use terms and metrics that are understood by both marketing and finance. Translate marketing activities into expected financial outcomes. 3. Transparent Reporting: Share detailed reports on marketing performance, lead-to-sales pipeline flow (demand volume, conversion & velocity), and budget utilization against forecasted spend. Make sure these reports are accessible and easy to understand. Your finance partners are likely open to helping you build these. Step 2: Define and Align on Shared Metrics Agreeing on common metrics ensures both departments are working towards the same goals. Consider the following: 1. Key Performance Indicators (KPIs): Establish KPIs that reflect both marketing and financial objectives, such as Pipeline Contribution, Revenue Contribution, Customer Acquisition Cost (CAC), and Marketing ROI. 2. Integrated Dashboards: Use technology to create shared dashboards that provide real-time insights into performance metrics. This fosters a data-driven approach to decision-making. 3. Joint Planning Sessions: During planning cycles, set aside time for joint sessions where marketing and finance can align their strategies and targets. This promotes a unified approach. Actually treat your Finance business partner as a member of your leadership team. Step 3: Implement Predictable Budget Management Predictability in budget management builds trust and ensures financial stability. Here’s how to achieve it: 1. Detailed Budget Forecasts: Create thorough and realistic budget forecasts. Break down expenses by functional group, strategic initiatives, market segments, campaign, channel, and time frame. 2. Real-Time Tracking: Utilize marketing performance management platforms / tools to monitor and manage spending in real-time. Spreadsheets don’t cut it and everything is dependent on your ability to effectively plan and manage your budget like an investment portfolio. My go to is Hive9, an Uptempo company 3. Proactive Communication: Keep the CFO informed about any changes in spending patterns or budget requirements. Good news travels fast, bad news faster. 🗣️ Join the Conversation: What practical steps have you taken to align your marketing and finance teams? Share your experiences and insights below! 👇 #B2B #B2BMarketing #Finance #CMO #CFO #BusinessGrowth #StrategicAlignment #ROI #Collaboration

Marketing says it’s working. Finance says it’s not. Now what? The CMO says the campaigns are working. The CFO says the numbers don’t match. The CEO’s stuck in the middle, wondering who to believe. This isn’t a strategy problem. It’s a data problem. What Finance Sees: • Revenue, EBITDA, and cash flow • A blended CAC that doesn’t match marketing’s reports • P&L trends that contradict campaign "wins" What Marketing Sees: • CAC, CVR, CPM, CTR - all optimized in-platform • Channel-level ROAS that looks great in isolation but breaks in the P&L • Facebook, Google, and LinkedIn all claiming the same sale Everyone has numbers. No one has the truth. And more dashboards won’t help. You need shared metrics that everyone signs off on. What alignment looks like at the exec table: For the CFO: → CAC and ROI tied to actual spend and revenue → Margin and efficiency metrics that reconcile with the P&L For the CMO: → CAC and margin trends that mirror the P&L → Predictive LTV and margin modeling that explains future performance, and what’s driving it For the CEO: → A clear view of LTV:CAC for current investment and its long-term impact → Agreement with CFO and CMO on which LTV:CAC to target, and on what horizon The goal isn’t more detail. It’s more signal. Agree on what matters. Then move. If your data leads to different decisions in every room. It’s not strategy. It’s noise. * * * Follow me for more insights across Finance, marketing & sales.