According to the CFO Magazine article here, Finance and Marketing don’t see eye to eye on measures of return.
That’s Breaking News, right? Wonder if that has anything to do with the lack of focus on Customer Value as a metric.
Chart below from the CFO Magazine article:
Comments? Have you tried to talk with Finance about Return on Marketing? What happened?Follow:
5 thoughts on “*** Finance versus Marketing”
Did they ask the question “Think you could do a better job at marketing than your current marketing team?” – my guess is that this would get a large response with little justification.
Whilst there is often no love lost between marketing and finance, the linkage between marketing and sales / business performance has to be made somehow. The danger for marketing teams is that finance take on this role because marketing continue to focus on intermediate (non-financial) metrics. If Finance agree on the Customer Value metric then great but best ask them first before running the data.
Jim: You wonder if it “has anything to do with the lack of focus on Customer Value as a metric” — but on whose part? Marketing’s? Finance’s? or both?
To John’s point: I’d have to say that most of the financial people I speak to at Epsilon’s clients are pretty straightforward and not cynical — they don’t want marketing’s job and don’t believe they could do a better job. What they DO want is Marketing to be more accountable for its expenditures and investments. And not simply put everything in the “we can’t directly measure the impact” bucket.
John and Ron, thanks for the comments.
I’d agree with Ron, I don’t think Finance people either think they can do a better job or want any Marketing role. They’re basically saying through this survey, “Look, every other major business function is accountable to us through some kind of measurement, however imperfect. Why don’t you Marketing folks join the party?
And absolutely John, the Marketing folks should reach out to Finance and start working together on the metrics before Finance simply decides what is going to be measured and how. There are significant challenges for sure, especially around the “periodic versus customer accounting” issue, but this has been done before – it’s not new.
Look at the CPG (Consumer Packaged Goods) folks, they are some of the most rigorous marketing measurement people on the planet. You think the folks at P & G get to go out and spend billions on advertising with no accountability or linkage to the Finance folks? No financial models to steer the allocation of spend among the brands? C’mon. And, at the same time, the CPG folks invented the idea of “Brand” and made the implementation of the concept real with cross-functional Brand Managers who are responsible for execution.
So I don’t think the “accountability” / linkage to Finance problem is really a Brand Marketing versus Direct Marketing issue. The approach a skilled Marketer takes is not the Root Cause of the Civil War. Rather, lack of accountability is the issue – from either camp. I think results such as the survey above come about because non-rigorous Marketers decide to wrap themselves in the “Branding” flag hoping this will help them avoid doing the Math.
Mike adds by e-mail that Marketing folks interested in this “interface with Finance” issue should read Marketing Champions by Roy Young, Allen Weiss, and David Stewart.
In reading your comment, I’m reminded that a number of firms I’m familiar with have created a finance role w/in the marketing department itself. Not sure if it’s just too early in the evolution of that role to determine its impact or if it’s just too unreasonable to think one person can fix the “problem”.
Hmmm…this person is perhaps a “financial analyst”? Sounds like the first step of what John was worried about above – if you don’t get proactive about measurement, Finance will get proactive for you…
Also reminds me of one best answer I have seen for the Marketing / IT interface – an IT person interested in the business side becomes the official “translator” for Marketing. All the communication back and forth goes through this “gateway”, with the end result being less time wasted due to misunderstandings and more active involvement by Marketing in the Operational side of the business.