From CFO to CMO: How to secure funding for marketing initiatives amid economic uncertainty
For marketing leads looking to buffer their budgets, it's all about knowing how to approach the chief financial officer – with innovative ideas and data to evidence returns on investment, writes Blueshift‘s Travis Adlman.
/ Adam Nir
During this time of economic uncertainty, it doesn’t matter whether your 2023 budget is up, down or staying flat – one of the many hats a marketing leader wears involves convincing their fellow business leaders that their brand needs to continue to invest in the right marketing technology to not only survive, but to remain competitive in the long run.
CMOs who consistently push wider leadership teams beyond their typical boundaries to show how their technology investments can positively impact their overarching finance goals always seem to come out on top. But the question for most companies looking to nail down their updated marketing budgets while navigating murky economic waters remains: where does one even begin?
One of the places to start is by looking at your competition. Is your competitor cutting their budgets? If so, by how much? If not, are they pulling back elsewhere? Typically, businesses that pull back on their budgets when their competitors trudge forward can lose around 15% of their business, according to marketing consultancy Analytic Partners. That’s a sobering thought.
In a similar vein, examining the full extent of the outcome of potential budget cuts with the help of historical data can indicate to leaders whether or not the temporary financial relief may lead to more significant, long-term strain on business objectives such as sales pipelines, brand awareness and customer trust.
How marketing investments can help you stay ahead in your industry
There has never been a more crucial time for marketing leaders to get on the same page with their C-suite around the companies’ continued investments. Furthermore, it’s important to understand what your chief financial officer (CFO) might be looking for before he or she decides what to fund and what not to fund.
Although the future economic state is unknown, your business has no choice but to still move forward. Customers rely on your company to be as present and as authentic as ever and sustainable growth cannot be done without investment. Here’s what marketers need to know to lock in both new and ongoing investments.
1. Articulate the overarching positive impact of your investment
Understanding your company’s overall financial goals rather than solely your marketing teams’ financial goals can easily demonstrate your teams’ impact in big way. Being able to show what you‘re spending and how it’s growing your active and new customer base by a percent within a specific timeframe can go a long way.
You could also ask your prospective vendors to help you collect this information. How is their solution better than what you have currently? Or better yet, how will it add even more value than before?
Remember, CFOs want to see your brand continue to positively stand out in the market – increasing revenue as a result – so it’s necessary to continue to invest in game-changing technology that will help do this. Putting yourself in your CFO’s shoes and asking how the technology will impact the existing marketing technology stack in a more efficient or cohesive way is something to also consider.
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2. Demonstrate the ROI
The need to include returns on investment (ROI) in your discussions with your CFO should go without saying, but you might be wondering when CFOs generally like to see a positive ROI. This usually depends on the technology at hand. If it is game-changing, then many CFOs would be open to seeing ROI in approximately 12 months or more. However, in general, the time frame depends on the sheer size of the organization. At the end of the day, CFOs really want to see how the technology you want to invest in will further drive value for the business.
Many marketing teams demonstrate ROI through gaining efficiency, agility and scale, which can be achieved through technology innovations and advancements such as AI marketing and platform approaches – both of which require both time and monetary investments. Using a platform approach rather than point solutions can save marketers money on integration costs, resources and more.
3. Pitch your ideas to your CFO
CFOs want their business to continue to innovate for their customers. But that innovation could come from research and development, customer experience, marketing or even other business leaders, all of whom are competing for budget.
If you’re a marketer looking for investment, it’s imperative to drive conversations with your CFO up a level. Consider making conversations less around budget requests that only affect your specific team – instead, describe how your investment will impact the overall business. Research and compare your product to others for a strong analysis. Tell your CFO what the ROI is going to be along with the specific ways that your ROI can be improved as a direct result of your investment.
Money will always continue to flow, because at the end of the day, companies are in the business of making money. But that doesn’t mean there’s no room for innovation, collaboration and investing. History shows that brand marketers need tangible investments to have an edge on their competition, and capitalizing on this fact in conversations both internally and externally will only yield greater, more positive results.
Travis Adlman is chief financial officer at Blueshift.