For years, the marketing industry has talked about the importance of the relationship between Marketing and Sales. And while this relationship is critical — the Finance and Marketing alliance is just as important, yet often overlooked. Our new research on Marketing Performance Management shows that the most successful organizations foster a strong relationship between these two departments.
Here are the facts:
Finance holds the purse strings
Any budget increase, major budget change, or overall investment strategy must go through finance. In addition, the CFO continues to take on a much more strategic role in the organization as a whole and thus is more influential. According to Deloitte, “CFOs take a seat at the strategy planning table and help influence the future direction of the company.”
Marketing has to manage perception
If the CFO sees marketing as a strategic lever aligned with business goals, Marketing will have more budget, power, flexibility, and a stronger voice. If the CFO sees marketing as a cost center, expect to be fighting against budget cuts rather than for budget increases.
Alignment here drives positive results
The results from our recent Marketing Performance Management Benchmark Survey underscore the importance of this alliance. Companies who get this relationship right reap the benefits in top line growth. 57% of organizations who expect more than 25% revenue growth report that Marketing and Finance often or always work well together to track investments and measurements, compared to only 20% of companies who expect flat or negative growth.
Make sure to read Allocadia’s entire Marketing Performance Management Maturity Benchmark Report for detailed insights into how the most successful companies are managing marketing performance to drive more revenue.
The Worrying State of Marketing and Finance Alignment
Across the board, only 14% of Marketing organizations in our study see Finance as a trusted strategic partner and 28% either have no relationship with Finance or speak only when forced to. This highlights the marketing and finance alignment problem across the industry. As marketers we must put more efforts towards this strategic relationship!
Expert Marketers POV: Ken Evans, Senior Director Marketing Operations, Fuze
“Marketing and Finance alignment is definitely underused. Any marketing organization looking to be high achievers needs to take Finance seriously. My best practice is to have a finance partner. In my last two roles I have actively sought them out, leading to a fruitful partnership.
It’s important that you as a marketer have a view into how Finance understands and approaches the business and it’s equally important for Finance to understand what the Marketing team is doing and how marketing plans affect the bottom line.
“It’s important for Finance to understand how marketing plans affect the bottom line.” – Ken Evans, Fuze
I recommend bringing the finance partner as close as possible to marketing and the department’s strategy around investment management – almost consider them an honorary marketing team member.
The benefits from the above actions will no doubt pay you back. When your Finance partner is in your corner they will act as a proxy when you aren’t there. That can mean less trouble (questions and fire drill data digging) down the road. It also earns you confidence and trust. That means when you say you’re going to spend money or resources to get a result, it’s believed.
Overall partnering with Finance has served me very well throughout my career and I encourage all marketing organizations to do the same.”
For more insights from our Benchmark Report, join a live webinar on Wednesday, January 31 at 10:00 AM PST / 1:00 PM EST with me and Debbie Qaqish, Chief Strategy Officer of The Pedowitz Group.