Building a brand is no longer solely relegated to the CMO of a company. The converging importance of brand equity growth, customer engagement, sales performance, and customer experience demands a different level of attention and focus across the full C-suite.
Simply put, the customer agenda fuels growth. Companies must drive current and prospective customers through a well-architected life cycle of engagement — across acquisition, loyalty, retention, and advocacy.
In a world reshaped by the power of digital technologies, successful customer life cycle engagement increasingly balances right- and left-brain skills: creativity and human insights on the one hand and data and technology on the other.
While the use cases around customer strategies will continue to be defined by the CMO, the broader agenda of digital transformation is best owned by the CMO and CIO, in close partnership with the CFO, who owns the business case for change and often drives the pace with investment recommendations. However, in many organizations, the CMO-CFO relationship is not as closely intertwined as it should be.
The customer growth agenda is steeped in digital transformation, requiring new connections to be forged across the entire leadership team of leading companies.
However, CMOs and CFOs, who have largely intersected around budget and return-on-investment in the past, now must also align strategically on the agenda for more systemic change. Digital transformation is not a sprint; it’s a marathon, driving both short- and long-term results and requiring CMOs and CFOs to work more closely than ever before.
In fact, the EY study, “The Future of the CMO CFO Connection,” surveyed nearly 300 senior-level financial and marketing executives and found that 90% of the respondents believe that closer collaboration is critical to successfully drive digital transformation. And, those same professionals believe that marketing spend would be more effective with marketing and finance more closely aligned. However, the cultural gap between these two functions is significant and must be bridged — with the full sponsorship and mandate of CEOs.
CFOs and CMOs have an opportunity to build a common language, embracing both creativity and data. And they have an opportunity to be united, like the full C-suite, around the theme of growth, which certainly offers common ground. A marketing executive may articulate growth around reach, engagement or sales, while a finance executive is more likely to focus on growth of shareholder value, top-line results or profitability. However, both growth agendas are integrally related and interdependent.
A big part of the shift comes from freshly contextualizing marketing not as a cost center but as a growth driver, balancing both brand building as well as performance marketing. Underpinned by the right investments and deployment of data and technology, marketing can drive customer outcomes more effectively and efficiently.
Investment in data and technology are unquestionable priorities to drive customer growth, but the decisions are complex to navigate. While customer data exists, it is often unconsolidated across technological, organizational and even political silos. Building the right data architecture is critical to manage first-party data and bring in second- and third-party data cohesively, enabling key activities such as identity management, targeting, optimization, modeling, analytics and reporting.
Customer data provides the fuel for a powerful ecosystem of technologies, all of which enable customer growth — from acquisition to loyalty. Together, the right data and technology architecture allow the right content to connect with the right customer in the right campaign in the right context to drive outcomes. And while marketing defines the use cases for data and technology investments, it is the finance function that often enables companies to justify the longer-term bets required.
The customer data and technology agenda brings benefits far beyond the marketing agenda alone and can be embraced by a broader range of organizational leaders. In the short term, better use of first-party data certainly drives direct digital marketing efforts and better targeting and modeling around media. However, those same data models have the power to “connect the dots” between marketing and customer experience — including sales and customer care where powerful signals can also be derived.
And beyond understanding the total customer experience more holistically, data and technology enable us to understand the full customer journey across different products, services and divisions, revealing new patterns and opportunities for innovation. That end-to-end agenda cannot be shouldered solely by strategic CMOs; it also must be shared at a minimum by the CFO, and likely by the full C-suite.
The 2019 EY study of the CMO-CFO relationship suggests there is a formidable gap to close between the two functions. Forty-four percent of the marketing professionals surveyed said they have a less productive relationship with finance than any other function. And, almost half the finance professionals had the reciprocal sentiment. But this is not a time to admire the problem — instead, we must overcome the cultural obstacles, assume best intent and find more productive ways to collaborate between these two critical leadership roles in all companies.
So, what can bridge the current divide between CMOs and CFOs? Here are five ideas for more effective CMO and CFO collaboration:
- Shift from debating past performance to building the future together
- Increase the volume of interactions and simply talk more often
- Find common ground culturally to build joint success
- Use outside-in thinking about customers to ground discussions in reality
- Evaluate marketing maturity and performance relative to industry peers
Together, CMOs and CFOs can build a mutually beneficial relationship, growing enterprise value through powerful customer strategies, while balancing creative and analytical skill sets. The growth agenda depends on finance and marketing working more closely together and setting the tone for the full C-suite, which will be more interdependent than ever before in a digital world.
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