While a company’s vision resides with a company’s CEO, CFOs inevitably play a crucial role in choosing strategy—either directly or by signing off on expenditures. Yet when that spend is on a (left-brained) CMO’s marketing campaign, how does the due-diligence (right-brained) CFO decide whether to sign off or not? And how does that CFO determine if that ad spend is actually working?
Two distinct examples from B2B marketing highlight the dire need of answering just those questions. The first, a hugely successful marketing spend that led to millions in revenue: a free email signature generator created by HubSpot that led to $8.5 million in net-new customer lifetime value every six months. The second example, a giant B2B marketing blunder: prior to working with Disruptive Advertising, a company had spent $150,000 on Google Ads and not produced one single sale. Yikes.
In either scenario—incredible gain, incredible loss—you can imagine the decision being made in the moment. The C-suite sits round the table as the CMO concludes their presentation. Suddenly, the CFO, flushed and having waited patiently for the numbers, blurts: “But how are we tracking conversion here? What’s the lead-to-MQL conversion rate? What’s the MQL-to-SQL ratio?” Their right brain is furious. “How do we know if this campaign will work?”
The CMO, caught off guard, hems and haws for a bit. Their left brain is insulted, and hurt. As if struck by inspiration, the CMO replies (almost daringly): “Haven’t I done well in the past?” They smile. “Just trust me.”
Of course, given limited resources and the CFO’s need for facts and their necessary risk-averse profile, extending blind trust to a CMO isn’t easy. Neither, obviously, is it sound business. Going off a CMO’s “gut feeling”—or signing off on a marketing campaign solely on trust—isn’t strategy. How does a CFO know if they’re following HubSpot’s example and building an evergreen, massively profitable customer acquisition tool? How does the CFO know if they’re just blindly following the CMO down a Google Ad rabbithole? And is determining the difference between a CMO’s brilliant plan and monumental blunder really the CFO’s job?
THE EVOLVING ROLE OF THE CFO
It goes without saying that the CFO’s traditional roles of steward (preserving assets, maintaining books) and operator (providing financial analysis, modeling, reporting) are still of fundamental importance. But such roles, around which the traditional CFO’s degrees (BA, MBA, CPA, CMA, etc.) are typically built, are increasingly becoming the bare minimum for entry into the CFO position. More and more, CFOs are being asked not just to steward a company’s finances, but to be leaders, strategists, and catalysts too. Increasingly, CFOs are being asked to partner with the CEO, helping to determine which business ventures are worth pursuing—not just which ventures maintain cash reserves, but which tactics will actually increase the bottom line. As one consultant put it, CFOs are being asked to go from “CI-NOs” to “CI-GOs”.
Plus, making the contemporary CFO job even harder, a really good CFO will help spur strategic and marketing ventures that not only increase revenue, but that are in line with the company’s mission and purpose. Lending a qualitative air to a position that used to be straight by the numbers.
HOW THE CMO HAS EVOLVED, TOO
Meanwhile, the CMO role is changing too. Marketing was once considered the soft arts and crafts of business. And advertising spending reflected (and for some companies still does) marketing’s perceived softness. As merchant-magnate John Wanamaker is popularly quoted as saying: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
But as marketing becomes increasingly digital—and therefore the sales pipeline becomes increasingly quantifiable, trackable, and verifiable—the responsibility of the CMO to directly tie marketing spending to revenue is becoming a requirement of the position (even if tie-in between expenditure and revenue is long-term). CMOs who fail to establish the connection between marketing and a company’s bottom line are getting cut. (In fact, average CMO tenure at the top U.S. ad spenders is down to 39 months.)
IT’S A MATTER OF DOVETAILING RISK
As the role of CFO turns more strategic and leadership oriented, and as the CMO role becomes less “soft” and more and more data driven, an obvious merger begins to occur. Imagine CFO and CMO as two competing sides of the same brain now realizing that they’re actually part of a whole—and beginning to talk. The CFO, once strictly relegated to financial diligence and therefore mitigating risk, becomes more dependent on the CMO to provide calculated opportunities for business growth and development. The CMO, on the other hand, once allowed to run wild (just throw money at Google Ads—it works!), becomes more cognizant of the company’s fundamentals, more aware of the company’s audience, and more nuanced in their risk management.
Ultimately, what’s needed to determine a marketing strategy’s viability is a common parlance between CMO and CFO, a visual language that not only speaks to a company’s mission, but that establishes common, explicit, and simple metrics for measuring a campaign’s success.
After all, a marketing failure doesn’t have to bring a company to the brink of bankruptcy. And in this day and age, with the right teams and tech in place, the right-sided CFO and the left-sided CMO can finally speak the same language. Across the lobes, if you will.
This is where 100 YARDS comes in: we’ve built a business on speaking to both sides of that brain. We are your growth marketing team, available on demand. Get in touch to learn how we can help your business grow.
