The Marketer’s Top C-Suite Ally: Pt. 2
- by David T. Scott
By now, I’ve convinced you that making the chief financial officer an ally is an important—if not the most important—part of a chief marketing officer’s job description. (If not, reread Part 1 of “The Marketer’s Top C-Suite Ally.”)
To help you get the relationship started, here are five ways to befriend your CFO:
1. Take a “Finance For Non-Financial Managers” class. You wouldn’t go to Japan (or any non-English speaking country) without learning some basic words and phrases, would you? It only makes sense, then, to learn the finance language before walking into the finance office. Being able to use the CFO’s language in discussions is key. Before you know it, you’ll know the difference between amortization and capitalization.
2. Talk financial impact when discussing program initiatives. Gone are the days when you can ask for “a couple million dollars” without promise of financial return. These days, you need to know exactly how much you’re spending and what impact it will have on revenue. Make sure you understand the financial trade-offs of your programs, and know exactly why you recommend this course of action.
3. Be flexible with your budget. Marketing is the easiest place to add and remove budget when it comes time for the quarterly earnings call. Be open to maintaining flexibility as it’s the best way to win the CFO’s favor. I usually try to keep as much as 25 percent of my budget flexible, meaning you’ll have to change your planning strategy. Trust me, it will be worth it. This way, if the CFO needs the budget to hit the quarterly number, then he/she can have it.
4. Know how to account for your expenses, understand the general ledger. Let’s say you’ve just spent $100,000. Does this money hit this month’s budget or is it spread across the next 12 months? Is the expense considered a cost of goods sold or is it below the gross margin line?
The answers to these questions have a significant impact on how much money you can ask for and how receptive the CFO will be. Chances are you have a controller or bookkeeper assigned to your department. Befriend them, too. This person will be more than happy to teach you the ins and outs of the general ledger. I’ve stretched my budget by thousands—and even millions—of dollars by understanding the nuances of this process. You can as well, and your CFO will appreciate you more for this.
5. Save money when you can. Your new website project is under budget—no, you’re not dreaming. What do you do with the excess cash? Offer it back to the CFO. There’s a fear that if you give the budget back, you won’t get it again. First, that’s not necessarily true. Second, this is about proving that you’re a team player and fiscally responsible—not about establishing a fiefdom. Any flexibility in your department could help him do his job. By expressing your interest and appreciation for the big picture, you will quickly earn the CFO’s trust.
I’m not going to lie; this is a long, hard road. But trust me, it will pay dividends.
Following these five simple steps could potentially make your job a lot easier. For instance, you’ll find the budgeting process easier and greater support when accruing expenses. Heck, you may even find more budget to use for your experimental pet projects. In other words, you will find Nirvana awaiting them at the end of the journey.
That’s all I have to say on this topic, but tell me what you think. Are there any strategies I forgot or ones you disagree with? Personal CMO-CFO buddy stories you want to share? Let us know below in the comments section, or email them to us.
Editor’s note: Read David’s explanation for why it’s crucial to connect with a CFO in Part 1 of “The Marketer’s Top C-Suite Ally.”