We’re big believers here at CFO Growth Advisors in the need for finance, strategy, and marketing to work closely together. In particular, the CFO and marketing team need to collaborate closely in order to efficiently grow (i.e., scale) a startup or small business.
However, according to an EY survey of CFOs, significant barriers remain, including the absence of common tools, processes, KPIs and continued cultural differences
Here are some key points from the survey:
Today’s business models are more complex
Customers are becoming more demanding and sophisticated
Technology is accelerating the pace of innovation
Competitive pressures are always increasing
Changes to the marketing strategy drives the need for CFO and marketing collaboration
Some of the crucial areas of collaboration include the following:
Understanding a company’s customer base via segmentation analysis lies at the heart of its profitability and competitive advantage.
“Increasing marketing spends in response to changing customer demands and channel proliferation in a digital world must be justified by effective measurement methods, but achieving a leadership position in collecting, managing and mining data for marketing purposes is a complex undertaking.”
“However, it is important to recognise that not all returns are easy to measure, and the CFO and CMO need to agree upon KPIs for both individual marketing initiatives and less directly traceable measures like brand positioning. “
Optimizing the product portfolio is incredibly important due to the significant impact on profitability and limited resources.
Sub-optimal product portfolio and poor allocation of internal resources limit growth potential. The CFO and marketing team need to strike a balance between focusing on the customer and expanding the product line and services. The CFO plays a crucial role in understanding where businesses are creating value in the product portfolio, and making room for new product innovations.
With the increase in technology spending driven by marketing departments (e.g., app development, online presence, advertising and analytics, the CFO needs collaborate with the marketing team to understand how this cost is being managed while still pursing aggressive growth opportunities.