Bridging the Gap: Why Finance and Marketing Need to Become Besties
Finance and Marketing, left to their own devices, will always find themselves in a perpetual tug-of-war. Finance, particularly in the context of CPG focused on cost control and short-term ROI, often acts as a buzzkill brake on Marketing's creative ambitions. This friction can stifle innovation, slowly erode away brand value, and ultimately, open the door for competitors. It may well be time for paradigm shift in your strategic operations – where Finance and Marketing need to become tightly integrated partners, working together to create and drive (pedal to the metal DRIVE) growth AND decision-making faster than the competition.
The Finance-Marketing Disconnect and its Consequences
The traditional disconnect stems from differing priorities:
- Finance: Concerned with profitability, efficiency, and risk mitigation. They scrutinize budgets, demand concrete ROI metrics, and often prioritize short-term gains.
- Marketing: Focused on brand building, customer engagement, and market share. They champion creativity, prioritize long-term brand value, and sometimes struggle to quantify ROI in purely financial terms.
This disconnect can lead to:
- Missed Opportunities: Finance may veto innovative marketing campaigns due to perceived risk or lack of immediate measurable return, killing potentially groundbreaking ideas.
- Underinvestment: Constant budget cuts can chip away at brand value, leading to a decline in customer loyalty and market share. Everything's fine...until it's not.
- Slow Innovation: Fear of financial scrutiny/project failure can stifle experimentation and prevent Marketing from adapting quickly to changing consumer preferences.
The Case for Integration
A strong partnership between Finance and Marketing offers significant benefits:
- Strategic Alignment: Shared goals and KPIs ensure both departments are working towards the same overarching business objectives.
- Data-Driven Decision Making: Finance can provide Marketing with valuable data and insights to optimize campaigns and measure effectiveness.
- Improved ROI: By understanding Marketing's strategies, Finance can better assess risk and allocate resources effectively.
- Enhanced Innovation: A collaborative environment fosters creativity and allows for calculated risks on promising marketing initiatives.
- Stronger Brand Value: Consistent investment in brand building, supported by financial data, leads to long-term customer loyalty and market dominance.
Building Bridges: How to Foster Collaboration
- Shared Goals and KPIs: Establish short and longer duration common objectives, and track progress together. Finance partners (business CFOs in particular) tend to stay for longer time periods (3 years), but Marketing managers/VPs tend to bounce every 1.5-2 years and never be held accountable and choosing to take credit where they please. I've watched brand managers and directors absolutely destroy businesses and run them into icebergs that were obvious to others, simply to jump ship unscathed (and in most cases promoted). As part of this - there needs to be objective reviews (NOT led by Marketing or their close data/insights allies buddies). Marketing is notorious for picking and choosing their own data points to share. What they call "ankle biters" - looked at with a clear objective lens can be full on crocodiles attacking.
- Open Communication: Encourage regular dialogue, cross-functional meetings, and shared data platforms. There NEEDS to be tension - so it's important to be clear on where those issues will be debated and grappled with openly, honestly, and with full-contact, and when there needs to be a unified front with leadership.
- Financial Education for Marketers: Equip marketers with the financial literacy to understand budget constraints and demonstrate ROI. Marketing spend, the easiest lever to quickly pull to hit P&L targets, often changes and it's important for Marketing to have insights into what's more definite, and what's more at risk of being reduced or shifted to other quarters.
- Marketing Education for Finance: Help finance professionals understand the value of brand building, long-term marketing strategies, and when there may be strategic opportunities (i.e. a competitor is struggling and there may be a knock-out opportunity).
- Joint Ownership of Success: Celebrate wins together and share root accountability for both successes and failures.
- Great Design: Both Marketing and Finance (and I believe Finance even more) - need to be able to identify and support great product design - a rare and ever evolving skill and talent. Finance is often the partner that crosses over into all aspects of the product from production, through marketing, sales, and channel consumption and that can (but rarely to the potential) serve as balanced strategic advisor. Historically that was only the CEO or possibly left to the President/GM - which meant by default this primarily fell on their shoulders to identify and understand. -This can be a serious challenge with even great CEOs/GMs that tend to be more more operations focused, which is why you tend to see oscillating cycles from more visionary CEOs, to more operationally focused.
The Future Is Integrated
In today's rapidly evolving and competitive market, businesses can't afford to have Finance and Marketing operating in silos or worse with conflicting priorities. By breaking down barriers and fostering collaboration, companies can start to identify and unlock value, drive breakthrough innovation, and maintain a competitive edge when the two are closely integrated and aligned in both short, medium, and long-term priorities.
