Let’s be honest.
Marketing and finance teams typically have pretty tense relationships.
Misunderstandings. Poor communication. Lack of transparency.
Major gaps in understanding and expectations are sadly the norm between these two stratospheric worlds.
And the most sensitive subject of all is money.
Marketers want their brands to be seen. They need healthy budgets for testing new channels, creating campaigns and driving performance.
Finance looks at budget as an investment and sometimes thinks marketing is just that fluffy organism that spends money but doesn’t really know its bottom-line impact on the business (which is really what finance cares about).
Finance needs to control costs (at all costs)!
This age-old battle can create friction that ultimately perpetuates organizational division. A company’s culture can be impacted long-term by this divisiveness.
But there are a few things you can do to significantly improve your relationship with the finance team.
Here are 5 ways to save the relationship between marketing and finance.
#1 Speak the Same Language
According to Forrester, one of the biggest gaps between marketing and finance teams is alignment on key KPIs.
Think about that.
If each team is prioritizing different metrics, guess what?
You’re NOT speaking the same language.
Make sure you’re using the same ruler to measure success.
Your teams will always be butting heads because they’re expecting different results.
What should you do?
Get together with finance and discuss your KPIs. Show them what metrics are important to marketing and why. Show them how your KPIs directly align with the business goal (here’s how to build effective KPIs and goals).
This isn’t a one-way street though.
Listen to finance.
Understand their concerns, accept their feedback and understand the KPIs that are important to them and incorporate them into your marketing planning and reporting.
Truly speak their language…stop seeing expenses as costs, start to look and talk about budget as an investment with a clear ROI.
#2 Improve (or Build) Transparency
Lack of alignment is often due to one thing:
Lack of transparency.
This is a major reason for distrust…in any relationship.
Marketing and finance teams often have very different personalities.
As marketers, we tend to be a bit more creative. Sometimes we invest in strategies that you can’t easily measure but have a significant impact on future results.
Branding is a prime example.
On the other hand, finance folks are more analytical. They want all the nitty-gritty details of dollars in and dollars out.
So, what’s the key to bridging these two worlds?
Marketing and Finance need to have clear alignment on three things:
- Marketing initiatives being planned
- Their relation to the business goal
- Expected results and outcomes
What should you do?
One of the best ways to build transparency is through clear reporting. Finance teams thrive on numbers. Marketing departments should leverage tools to create dashboards that finance can access at any time.
Show them what is going on and what the results are. Even better would be to compare the real results with what was planned so finance can quantify the success or failure of marketing activities.
Proactive and transparent reporting will go a long way towards building a relationship of trust with finance.
It will allow finance to quantify the success or failure of marketing activities and trust that you actually invested your budget as planned.
#3 Be Data-Driven in Your Marketing Planning
Finance LOVES numbers, right? It’s their jet fuel.
But guess what?
Marketing is driven by metrics too.
We also LOVE our numbers: conversion rates, leads, cost per…!
Let data be the uniting force that brings finance and marketing together. Data, metrics and KPI’s can be the bridge to better collaboration.
Finance will be better able to support your next marketing strategy if you can attach key financial metrics and goals to it.
What should you do?
Take the guesswork out of your marketing planning and adopt a data-driven approach.
Give finance the impression that your decision making and planning is rooted in the analysis of data, not on emotion and experience (“well, it worked for me in the past”).
When planning your marketing strategy, make sure finance clearly understands:
- The reasoning and logic behind the plan
- The data used to build your assumptions
- The financial resources needed to execute the plan
- The expected results of the plan (on the company goal)
- How to determine the success and failure of the plan
- The timeline of the plan
#4 Provide (Realistic) Forecasting
Finance doesn’t always trust forecasts coming from marketing.
What’s the one word running through their minds as you describe the soaring effects that your next campaign will have?
You have to provide accurate forecasts of your expected results that show you are:
- Realistic, not promising your brand’s logo on the moon.
- Align with the business goal, consider the direct effect on the entire company and the business goal.
What should you do?
Provide a benchmark for your production through the evaluation and analysis of your current performance metrics.
Include metrics like:
- Cost per Acquisition
- Estimated Pipeline Generated
- Estimated New Revenue
Think about data that will show the direct effect of your activities and initiatives on the company.
To improve accuracy, be sure to consider external factors too, like the holiday season, and account for these external factors in your forecasting.
Create a calendar of all events, public holidays, and any other foreseeable factors that could impact your campaign.
Think about every channel that will be impacted too.
Pull out the history books and really analyze your past data.
How much has Christmas or 4th of July impacted your channels in prior years? And in what ways specifically?
Incorporating this level of detail into your forecasts will prove to the finance team you’re serious about your request, and you understand its overall impact.
#5 Consistent Collaboration
To form a more effective relationship, communication is key. Even more important than that, though, is consistency.
To improve the marketing and finance relationship, collaboration needs to happen, often.
It’s not enough to have quarterly meetings.
The marketing finance relationship needs to be built on a consistent collaboration.
What should you do?
Open discussion of business and marketing goals, even if the conversations are tense.
Try bringing finance into campaign brainstorming sessions. It’s important that finance understands what marketing is trying to achieve. They will also feel more at ease approving campaign budgets if they feel they were included in the process and have a deep understanding of the strategy.
On the other hand, Finance shouldn’t assume marketing doesn’t need to know financial details. While budgets and P&L statements may seem technical, marketing should be in the loop.
Ultimately, building a healthy, collaborative relationship won’t happen in a few meetings. It will happen through consistency and a desire to build a better relationship.
Alignment between Marketing and Finance is crucial for creating a successful SaaS company.
But like any great relationship, it takes real work.
It takes reaching across the table, putting yourself in Finance’s shoes, and being transparent and honest.
If you’re not doing it already …
Start creating detailed marketing plans that include forecasts, explanations and tactics in a data-driven language your Finance team will appreciate.
Your chances of getting your next budget increase will be significantly improved.
Plus, you’ll begin building a healthy, effective relationship between your Marketing and Finance teams that ultimately strengthens your company.
Having a great relationship with Finance is an important first step in the transition from marketing executive to business leader.