A focus on the top-line and customer experience (CX) has increased in importance as companies seek out innovative growth opportunities. But a collaborative relationship between CFOs and chief marketing officers (CMOs) is lagging at many organizations.
“Marketing and Finance: Fueling Innovation or Falling Behind?” a report released on Sept. 20 by the CMO Council and KPMG LLP delves into the friction between the two departments.
“There’s this expectation in digital that everything is easily measured, and it’s just not,” Nadine Guglielmetti, VP and general manager of marketing at The Vitamin Shoppe told the CMO Council. “This is where I think some of the friction happens between marketing and finance and other roles.”
A survey found that less than half (45%) of CMO-CFO partnerships are ‘willing’ to collaborate on investments, goals and metrics, and just 22% are ‘very willing.’ Meanwhile, 33% are indifferent or hesitant. Among CMO-CFO partnerships that are indifferent or hesitant to collaborate, only 27% are satisfied with their ability to innovate.
“It is true that CX and CLV [customer lifetime value] measures, frequently underpinned by things like Net Promoter Score, are becoming more crucial to companies’ growth strategies,” says Bret Sanford-Chung, managing director of the US Customer Advisory at KPMG LLP. “However, marketing frequently does not get the credit it is due in driving those measures.”
“This stems from marketing’s inability to have a clear picture of what it is spending money on,” Sanford-Chung explains, “and how that spending impacts the KPIs the CFO cares about.”
The research found the top three most important areas for marketing-finance alignment are: data-driven decision-making (including visibility into leading and lagging indicators), long-term investment strategy, and customer lifetime value.
But then the question arises: Who owns the customer data? Just 26% of respondents say customer data is co-owned and shared seamlessly between marketing and finance. Twenty-two percent of marketers admit customer data is primarily owned by marketing with limited access to finance. And 31% say the data is owned by a separate function and shared seamlessly between marketing and finance, while 17% say it’s owned in silos and not shared across functions.
The findings are based on a survey of over 275 marketing leaders across industries and geographies, and in-depth interviews with marketing executives. The report recommends integrating customer data across marketing, sales and finance, and giving the CFO visibility into what they are approving investment for. In his work, Sanford-Chung tells me he’s seen that software platforms that give marketing a clear view of spending are helpful.
But there are CFOs who’ve been successful in creating a collaborative bridge between finance and marketing, like e.l.f. Beauty CFO Mandy Fields. She told me earlier this year, “I’m super involved in marketing. I’m the BFF to our CMO.” In August, the company reported 18 consecutive quarters of growth.
Have a good weekend.