Just 22% of CMOs say their partnership with CFOs is truly collaborative according to new research from the CMO Council and KPMG. Just over a quarter (26%) of the marketing leaders surveyed describe the relationship they have with finance as “indifferent”, while 7% say it is outright “hesitant”.
The report, titled ‘Marketing & finance: Fuelling innovation or falling behind?’, takes a look at the impediments to collaboration between marketing and finance, but also highlights the benefits of effective collaboration.
While no silver bullet, the report suggests that joint ownership of customer data is paramount, but that only 18% of marketing leaders strongly believe both finance and marketing have the same access to the customer data and transactional information that informs marketing decision-making.
The report makes clear that an unwilling or hesitant approach to collaboration between the two departments has a chilling effect on the ability of a brand to respond in an agile way to disruption.
Chris Burggraeve is founder and CEO of Vicomte LLC. He argues that the headline stat is unfair, and belies the positive aspects of the report: “The good news of this study is it suggests that over two thirds of CFOs are very willing to collaborate with their CMO peers. However, to make these discussions worth each other’s time… the study suggests the key is to align on the real metrics of marketing effectiveness and efficiency.
“What I am suggesting as the metric of choice is not so much ROI, a useful “efficiency” metric to measure the “how” of marketing, but rather shift the debate with finance on the concept of measuring and building sustainable pricing power, to nurture string intangible assets.”
As a result the report advocates for marketing team leaders to approach their finance counterparts with “technology investments that add value to both your marketing and finance sectors” in order to show how investment in marketing provides a halo effect for the wider business.
It echoes advice given by Boots’ former CFO Michael Snape and current CMO Pete Markey on effective collaboration, in which Snape advocated for marketers to make a consistent effort to explain the wider benefits of marketing efforts to the finance team, rather than just treating them “as a bank”.
Other senior marketers have previously told Marketing Week that the benefits of doing so extend to the personal level. Jennifer Chase, executive vice-president and CMO at SAS, says speaking to finance departments on their terms has made her a stronger asset to the wider business. “They’ve made me understand how to talk about marketing impact in financial terms,” she says.
Part of that process involves demonstrating performance and effectiveness. The CMO Council report finds 87% of marketers with a collaborative marketing-finance partnership are satisfied in their ability to measure performance, while only 57% of marketers with a less collaborative relationship say the same thing.
It speaks to the need for goal-based collaboration within brands, one in which marketing and finance are aligned in order to react to any disruption within their industry.
To create better alignment, 27% of marketers responding to the study say deeper collaboration is needed on metrics and goals. This is followed by 25% who cite the need for better alignment on priorities and incentives and 22% who single out risk assessment. One in 10 (11%) suggest more collaboration on timetables would be useful.