The argument is almost as old as business itself – “How can we measure the success of our marketing efforts?” Marketing and finance have always been the two functions that seem to naturally clash. The conventional wisdom is that marketing spends the money and finance is there to put up roadblocks. Marketing is based on relationships and brand equity, and finance is based on hard numbers and evidence.
This is how you want your finance and marketing organizations to work - from bkp13611 via Flickr
Conventional wisdom is wrong. Marketing and finance can work together to deliver real value for an organization. The key is making finance and marketing work together. A 2008 article from Business Finance Magazine still provides a number of great tips to help your organization put the finance and marketing groups on the same page.
- Include non-financial metrics in your company’s reviews – Profitability is the overriding goal of any company, but financial statements are only a scoreboard. Operating metrics help your organization focus on the underlying initiatives that people can work on. You cannot tell someone “increase revenues by 20%”, but you can direct someone to “generate 20 new leads and convert 30% of those leads into paying customers”.
- Put marketing and finance people on project teams together – In a prior corporate job, I spent a great deal of time working with a product marketing manager. We educated each other on the goals of our respective functions. I taught the marketing manager about focusing on customer profitability, he taught me about branding and customer intelligence. By working together, finance and marketing can create common goals to grow customers and profits.
- Focus on product or market portfolios – Just like any large project, marketing and finance work better when focusing on smaller subprojects. If you create smaller portfolios focused on a specific product or customer segment, it will be easier to measure the portfolio’s results.
There will always be times where marketing and finance will agree to disagree. However, focusing on common ground and educating each function on the value of profitable customers can create a good working relationship between marketing and finance. Both functions are working toward the same goal of a better company. The key is designing goals that work for both areas.
