Finance and Marketing Departments: 5 Tips for a Successful Union

For CMOs, average tenure is only about three years. Sound surprisingly short? Conflict between finance and marketing causes CMOs to leave roles more often than you might think. That’s the bad news. The good news is that this clash doesn’t have to exist. For marketing leaders, knowing how to work with finance is a huge strength—and a requirement for thriving in the C-suite.

In this article, we’ll explore how marketing and finance can get aligned, build trust, and work together so you can secure the budget you need, achieve goals more reliably, and grow the business more effectively.

If you’d prefer to listen, tune into the webinar hosted by Agorapulse CMO Darryl Praill. This article recaps insights from The Marriage of Money and Marketing: 5 Tips for a Successful Union, including takeaways from panelist Mark Kilens, CMO at Airmeet. Here’s a quick peek at the webinar:

Marketing vs. Finance: Why These Functions Clash

Whether you’re already navigating a CMO role or you’re a social media manager who aspires to lead, you need to know the reason for the conflict before you can take steps to resolve it.

In most cases, marketing and finance are both working toward the same overall objective: business growth. But they’re approaching the goal from completely different perspectives.

• Marketing is responsible for spending money.
• Finance is responsible for not overspending.

Darryl Praill explains that as marketers, “we’re only as successful as the budgets we’re given.” Yet he elaborates that “it’s up to us to make a good case for the budgets that we need.”

For many CMOs, that’s a tall order. It often seems like CEOs and CFOs refuse to allocate more budget unless marketing can achieve impossible key performance indicators (KPIs) based on unclear objectives. In some cases, even defending the existing budget presents a challenge for CMOs. Many feel pressure to prove the value of their work by delivering return on investment (ROI) based on metrics that they don’t control.

Are you seeing a pattern? For CMOs, a key part of the problem is the lack of clarity and control.

Overcoming these issues and finding common ground won’t happen overnight. But with a proactive approach and a genuine desire to achieve goals together, it’s possible to work collaboratively.

How to Unite Finance and Marketing: 5-Step Framework

With the five-step framework below, you can take steps to work with finance instead of against them, ultimately making your job easier and more sustainable.

1. Align marketing goals and financial objectives

As a CMO, you should expect some pushback on budget requests. Mark Kilens doesn’t necessarily see that as a bad thing. After all, checks and balances are crucial for any successful business.

The key is knowing how to respond to that pushback in a way that moves things forward. First, you need to understand your CFO’s or CEO’s philosophical approach to budget management. Then you have to align your own approach.

Clarify the value framework

How do your finance executives view value creation and money management? Mark suggests that both finance and marketing teams use a value framework he learned from Dharmesh Shah during his time at HubSpot.

• Customer value: How will your investment help customers, either in the short term or in the long run?
• Enterprise value: How will your proposal benefit the business?
• Team value: How will your campaign positively affect your team?
• Individual value: How will your work further your position or standing?

Marketers often focus more on the last two types of value: team and individual. But in most cases, both finance and marketing should focus on customer and enterprise value first.

Although you can certainly guess which type of value your finance team prioritizes, it’s best to ask them directly. While you’re at it, find out how much transparency and detail they want from marketing. Knowing what would help them can help you get aligned.

Know the business goals

From your CEO’s or CFO’s perspective, what are the key financial objectives and business goals? Again, Darryl recommends asking finance directly to learn exactly what they’re targeting.

For example, they might think the most important issues to address are:

• Gaining a certain level of market share
• Reducing churn to a certain percent
• Increasing ARR to a certain amount

No matter what their goals turn out to be, any budget requests you make should support those goals. So once you’re clear on the goals, you can frame your requests much more effectively—and get the budget you need.

Understand the revenue plan

Before making a budget request, you also have to get clear on revenue. Mark says: “I think the most important thing that marketers should understand is how the business creates revenue and retains that revenue. Fundamentally, that’s the business.”

Mark recommends considering the sales motions your organization uses. Do you need to attract new users or expand the existing install base? How efficiently is your organization doing inbound versus outbound?

Budget allocation is likely to be completely different depending on sales motions and growth goals. But once you know what they are, the easier you can get aligned with finance. As Mark says: “The more handle you have on your metrics, the more successful you’ll be.”

Get a big-picture perspective

Mark suggests that marketers get clear on four key aspects. They’ll give you a perspective so you can do your job better and collaborate with finance much more easily.

• Volume: How many opportunities do you have at each funnel stage during a typical week, month, or quarter?
• Velocity: How quickly are these opportunities moving through your sales funnel?
• Conversion Rates: How efficiently are these opportunities moving through the funnel?
• Value: What is the value of these opportunities compared to the cost required to create them?

2. Collaborate on shared goals

By now, you should have a sense of what your finance team wants to achieve and why. You should also have a basic understanding of how you can support sales motions to make progress toward those objectives.

The next step is working together on a set of shared goals. Above all, you’ll want to target big-picture goals like maximizing efficiency and driving revenue growth.

Ask finance to work together

You can’t expect to walk into a CMO role with a full understanding of the organization’s revenue machine. In most cases, you need to work with finance to get the context you need. Successful CMOs tend to take a proactive approach to collaboration.

Mark explains that the best course of action is often scheduling time with finance and prompting: “Walk me through the budget.” In most cases, you’ll want to repeat this meeting every quarter so you have time to submit your own requests.

For CMOs and marketing directors, forming a relationship with the CFO might seem like the most logical course of action. But in some cases, you’ll have better luck collaborating with another member of the finance team.

The right person to ask often differs based on the company type and growth stage. If you work at a startup, Darryl recommends connecting with CFO. At a larger company, a junior member of the finance team is probably a better bet.

Either way, remember that finance wants to work with marketing. Darryl confirms: “They don’t want to have a volatile relationship with you. They want to have a good relationship.”

Since marketing handles the campaign spend, it’s in finance’s best interest to collaborate with you. Together, you can move toward goals more efficiently.

Internalize financial schedules

As you work with finance, keep timing in mind. Don’t hesitate to ask for specifics so you can meet their deadlines.

For example, your finance team might aim to finalize budgets shortly after the quarter begins, with no option to adjust planned spending after that. In that case, you’ll need to submit budget requests long before the quarter kicks off.

At the same time, make sure you know what finance expects from you. For example, do they want you to update forecasts as soon as possible and confirms actuals every month?

Establish a strategic planning and goal-setting framework

As a CMO, you’re responsible for using the company’s strategic planning and goal-setting framework. In many cases, you’ll have to adapt to the framework your organization already has in place.

For many companies, goal-setting centers on establishing objectives and key results (OKRs), a system with two components:

• Your objectives are your goals—the outcomes your programs target.
• Your key results are your metrics—the way you measure what you achieve.

In other cases, you might be able to advocate for the system you prefer. At Airmeet, Mark opted to implement V2MOMs:

• Vision, which should be a large-scale goal you want to achieve.
• Values, which define what matters to you in the context of the vision.
• Methods, which clarify the tactics you’ll use to work toward the vision.
• Obstacles, which anticipate what might hold you back from reaching the vision.
• Measures, which confirm how you’ll know you’ve achieved the vision.

3. Foster a culture of mutual respect

True collaboration between marketing and finance isn’t limited to a one-time meeting or even quarterly budget sessions. Instead, it requires ongoing work and open communication to foster a culture of mutual respect.

Mark refers to the concept as creating sunlight. Think about it as making everything transparent so finance never has to guess what’s happening with marketing. Ideally, the transparency will be mutual.

Communicate proactively

No matter how well you plan marketing programs and campaigns, as a CMO, you can’t predict everything.

Even the most well-executed campaign might not perform as expected due to platform changes. Or the marketing landscape might change unexpectedly, prompting you to adjust and leverage valuable opportunities.

Although you probably won’t be able to request additional budget in the middle of a quarter, you can reallocate what you have. For example, you might opt to make a major purchase now and reduce future campaign expenses to account for it.

No matter how you reallocate, proactive communication is key. Darryl recommends connecting with finance to alert them to any unexpected expenses. When you do so, clarify what you did to accommodate it in your budget.

At minimum, Darryl and Mark both recommend monthly check-ins with finance. With this frequency, you can reliably keep your CFO in the loop about any adjustments.

Share wins and losses

If your marketing programs are underperforming, it can be tempting not to share your numbers with anyone outside of your team. You might want to wait until those losses turn into wins before talking to finance.

Yet Darryl recommends being proactive about losses too. To build trust, you have to over-communicate about everything.

But here’s the catch. If you do have losses to report, make sure you have a plan to address them. Be prepared to outline your next steps and how you plan to reallocate resources.

In some cases, you should expect pushback. Darryl explains that it’s finance’s job to raise questions if something doesn’t look right. For example, if acquisition costs are way higher than industry averages, finance might be justified in thinking that the company isn’t spending money wisely.

Experiment wisely

Consider your company culture both when you share wins and losses and when you decide to experiment. Some businesses are much more supportive of experiments, even if they end up as mistakes. Others are less accommodating.

If you do have the capacity to experiment, make sure you have an informed idea of what you think the results will be. Make a point of tying those results back to the business goals that the finance team cares about.

Mark suggests that virtually every marketing program or tactic—including experiments—should contribute to either revenue or customer acquisition. While more revenue is almost always better, attracting more leads isn’t a goal for every business. In some cases, less is more. The business may run more efficiently by focusing on quality leads over a large quantity of leads. Know what’s ideal for your organization so you can align your efforts.

4. Bridge the gap with data

When you communicate with the finance team, make sure to speak a language they understand. In most cases, data works best. Darryl considers data to be a universal translator. It should be integral to any information you share with finance.

The specific metrics you share will depend on what finance wants to know. Darryl recommends asking the department directly. Make a list of metrics and reference it every time you need to share an update or make a request.

Mark recommends using this prompt: “Help me understand what has worked or what hasn’t worked, and help me understand where you don’t understand if things are working.” Then you can use data to show if your programs are working and continue to establish credibility.

If you need to share data on social media campaigns, Agorapulse’s ROI dashboard can be helpful. The dashboard automatically tracks website traffic, conversions, and revenue from all social media activity so you can see exactly what’s driving value.

When you share data with finance, keep in mind that going over budget can be incredibly risky. In virtually every case, your goal should be to stay at or under budget while hitting targets. Every time you go over budget, you erode trust.

One way to get some slack is to build in a small bonus budget that you can allocate as necessary. Mark suggests having a 5-10% budget line item that can be used at your (or the CMO’s) discretion.

5. Provide helpful context

As important as data is—especially to finance—it doesn’t tell the whole story. Adding context allows you to share the narrative more effectively. Taking this extra step can also help stakeholders gain a greater understanding of your work.

This tactic could work with any finance department. But Mark finds that adding context is especially helpful if you work for a venture-backed business that requires regular board updates.

For example, Mark suggests using data to illustrate the customer journey. Show key marketing and sales touch points throughout the journey to show how your programs and budget contributed to customer acquisition and success.

Agorapulse’s ROI dashboard can also provide helpful context. To help stakeholders visualize marketing touch points, use the charts to show spikes in customer activity or highlight the transactions and revenue that your top-performing content generated.

Bonus: Learn acronyms and jargon

To communicate with finance effectively, you need to know the jargon they use in conversations. Some of these metrics will depend on your industry, but Darryl recommends starting with these acronyms:

• CAC: Customer acquisition cost, or the price of earning a new account.
• LTV: Lifetime value, or how much revenue a customer generates over the lifetime of the account.
• ARPA: Average revenue per account, or how much revenue each user generates on a monthly or yearly basis.
• MRR: Monthly recurring revenue, which is a crucial metric for software as a service (SaaS) and subscription businesses.
• ARR: Annual recurring revenue, which is another important revenue metric for SaaS and subscription businesses.

Wrapping Up What We Learned About Finance and Marketing

Marketing and finance might not see eye to eye naturally. But as a marketer, you have to put in the work to understand your CFO’s or CEO’s goals so you can get the budget you need to do your job more efficiently.

Need a better solution for collecting and presenting social media campaign data to your finance team? Agorapulse’s social media reports and ROI dashboard can help. Book a demo and see for yourself how our social media solution can simplify analytics and reporting.