Finance without marketing is equivalent to candy without sugar. If your campaigns are operating independently of one another, you won’t see good results.
Why? Because finance (whether it’s a team or one person controlling the purse strings) needs to comprehend the benefits of the plan to justify and release the investment, marketing needs adequate spending to back their strategy.
Competing Departments
Whether you manage a large company with organized departments or a small company with one or two people in charge, historically, the view has been that marketing wants to spend while finance wants to save, which results in a “us vs. them” mentality.
This is detrimental to the company. The two departments, marketing and finance, must have a common commercial vision and respect one another’s contributions. so that they can cooperate to:
- Following sales trends
- Spend money wisely on campaigns
- Effective resource allocation
All of the aforementioned are necessary for the firm to be financially successful since it develops a unified plan where growth occurs where it should. A greater degree of understanding and better communication are essential for obtaining this outcome.
Formation of a partnership between finance and marketing
Only when marketing and finance are aware of one another, the larger corporate goals, and the synergistic potential of their collaboration can success be realized.
You can do this with the help of the following advice:
Crucial monthly gathering
A first sit-down meeting is required with both parties. To dispel ideas that finance exists to restrict spending or that marketing isn’t properly evaluated based on performance.
This can be done by pooling their collective knowledge of the industry to settle on:
- Which business segments do they both aim to expand
- How the expansion strategy will fit into the larger corporate plan
- What growth means in terms of its effects on profitability
- What budget should be used to achieve this growth?
With these details worked out, finance can help expansion by justifying and planning for the first expenditure while taking the impact on the rest of the company into account. And marketing has the support required to implement a successful strategy.
In terms of the return they anticipate from that investment and the timeframe in which they will achieve it, both teams and individuals must be realistic.
These departmental meetings need to happen frequently. As a result, communication doesn’t break down, and both parties may react rapidly to strategy adjustments.
Providing financial resources to the marketing plan
Allowing your finance team or director to contribute to the strategy can help them get emotionally committed to marketing. Ask them in marketing:
- What are the optimal customer and revenue growth goals for the company?
- What amount of money should be spent to achieve this growth?
- Which items or services are the most lucrative?
- How is the customer spending distributed among your goods or services?
- Which regions or customers are the most lucrative?
This is a significant additional benefit because finance has special knowledge of your customers, goods, or services. They can utilize this information to assist advertisers in developing more profitable and targeted campaigns.
Share accomplishments
A financial director will simply perceive the expenditure as a hole in the company’s profits in the absence of evidence of marketing effectiveness. After that, they will decrease expenses to save money as that is what they are paid to do.
Give marketing the chance to communicate the campaign’s success. Like information on the % rise in sales that followed the amount of website traffic that was generated by the campaign last month. Or how developing and promoting a free tool prompted inquiries from new clients.
Finance will then have the proof they require to defend a healthy marketing budget.
Another benefit of Collaboration
Finance gains:
- Assurance about costs so they can precisely plan for the company’s cash flow
- Extra time since once the first budget is established, there is no need to continually analyze expenditures.
- Agreed-upon KPIs that they can use to gauge their progress
- The ability to prepare modifications for the rest of the business as growth is delivered
Marketers gains:
- A budget that they are free to spend as they see fit; they won’t constantly need to acquire permission.
- Provide them with clear deadlines so they’re not pushed to meet arbitrary deadlines
- Decision-making freedom once the budget has been approved
- An awareness of the outcomes the business anticipates right away
- An ability to monitor the outcomes and make sure their plans change as they go along
All of these advantages significantly strengthen the company:
- The two teams’ or individuals’ relationship improves, which boosts their performance and the value they add to the company.
- A well-coordinated plan makes the company’s future-proof and growth much more certain.
- Planned expansion will be appropriately supported if there is adequate money in place.
While marketing focuses on product development, pricing strategy, distribution channels, promotions, sales targets, sales volume, sales in comparison to competitors, brand awareness, and publicity, finance is concerned with all financial aspects of a business such as profits, costs, the feasibility of projects, and overall financial performance.
Since product lifecycles cannot be managed and sales will fall without marketing, a relationship between the two would be profitable for both parties. However, there wouldn’t be a marketing budget without the Finance department. The goal of finance is to identify strategies for raising profits. Therefore, if there is no profit, their function will be unnecessary.
It is therefore very obvious that a link between marketing and finance will be advantageous to both parties, and as such, they must find methods to cooperate.
Make it Happen
The creation of a new team that sits between the Finance and marketing personnel and has the capacity to evaluate, contact, and qualify prospects generated by marketing before being forwarded to the sales to account executives is one of the greatest ways to successfully align the teams.
Before the sales team can successfully conclude deals and engage in cross-selling and up-selling, this framework will assist the marketing team in increasing lead generation and developing prospective partnerships. You will see improved ROI and much more effective business performance overall by establishing this connection between the two.
