Memo to the CMO: Digital transformation has driven some great innovations in the way brands deliver experiences — just in case you weren’t aware.
The pandemic accelerated these changes and now customers enjoy many of the conveniences offered through a brand’s app, website and more. During an economic downturn, it’s critical that marketing leaders continue to drive customer innovations and make the right investments in martech solutions.
As you set your 2023 marketing budget, know that your CFO understands the power of leveraging digitization to drive the business forward. In fact, “driving value through technology-based innovation” ranks among CFOs’ top areas of focus, as noted in Deloitte’s CFO Signals survey for the first quarter of 2022.
In that survey, the majority of CFOs said 22% of their company’s tech spend would be to create new capabilities for the business. However, the same survey found both prioritization and business partnerships to be among CFOs’ top five concerns.
Your role as a marketing leader is to help your CFO prioritize what’s going to generate more revenue for your business.
Three Ways to Secure Budget for Your Marketing Initiatives
As a CFO, I’d like to share the three things that I expect from my CMO partner, and what I need to make decisions.
Pitch Me Your Ideas
I’ve heard that some CMOs consider their CFO organization to be the “Org of No.” That’s unfortunate because CFOs want the business to drive value and growth through marketing and sales efforts as well as technology and innovation.
CFOs are rational people. We need to figure out where to invest the company’s money because we only have so much of it. Part of my role is to listen to whoever makes the best case on why they need to make that investment for the organization. The CMO needs to frame their requests through that lens and say, “This investment in X is going to work because of Y, and here’s the expected ROI.” You need to drive the conversation up a level and make it less of an ask that only benefits a specific group in the org.
The other functional leaders are also competing for budget. Your role as the CMO is to arm yourself with the right information; the better the information, the more convincing you are. Do your research and compare other products for a strong analysis. Tell me what the ROI is going to be, how is it going to help me increase the number of customers and conversions etc. Money will always continue to flow because at the end of the day, companies are in the business of making money. You still need to invest.
Show Me the Value
After years of investments in digital transformation, you may believe it’s getting harder to ask for budget to invest in new technology. You probably made a lot of investments five years ago when the focus was purchasing technology to manage and derive insights from all the customer data that your company was beginning to generate. But technology, especially AI marketing technology, has advanced so much since then. It’s important to continue to invest in advancements to remain competitive.
Just look at how businesses during the pandemic accelerated digital transformation investments by a few years. And that has led to some positive changes for customers with advanced technologies, new digital models, and stronger brand interactions. So we shouldn’t curb spending in times of crisis, particularly if on the surface, it may seem to the CFO that you already have a sizable martech stack.
CFOs right now are looking at what they have from a software and infrastructure perspective, and they’re also drilling into the marketing spend. They’re asking the CMO detailed questions around cost per lead, marketing channels, and so on. Your job is to provide that data and the ROI that you’re seeing from your existing stack, but also detail how the investments in more advanced technology will move the business forward in the long run. Demonstrate how the new technology gives you the ability to drive better growth and innovation – especially if the technology enables your team to work more efficiently and focus on what they do best: be creative marketers.
Several of our customers are choosing to gain agility, efficiency, and reduce costs using AI marketing and a platform approach, which makes my job easier when I talk to potential prospects. Using a platform approach rather than point solutions can save on integration costs, resources, and more. AI marketing not only personalizes each interaction with your customer, you also increase cost savings, efficiency, and ROI for your organization.
Understand your Organization’s Financial Goals
CFOs want to see results from their CMO based on your organization’s goals. Tell me why you need to spend X$. Is it going to drive X number of customers to convert? Will it help to increase the LTV of our subscribers? I need to be convinced that this new technology will help the company achieve our goals. So, ask your prospective vendor to arm you with that information. How is their solution better than what you have – or better yet, how will it add value to what you have? I’d especially like to know how it is going to make the team more efficient. How will it increase their performance?
At the end of the day, I want to be convinced that the new technology will help us achieve more revenue. In terms of the length of time I give before I need to see ROI, that depends on the size of the organization and the technology. If the technology is a game-changer, I’d be open to seeing ROI in 12 months or more.
Uplevel the conversation with your CFO to discuss how the new investment will positively impact the business in the long run. I can get to “inspired” quickly if I’m confident we are investing in game-changing technology that will help us sustain and grow our leadership position in the market.
I wish you the best of luck in your conversations.
Travis Adlman is CFO at Blueshift
The post CMO: 3 Ways to Win Budget From Your CFO in a Downturn appeared first on Multichannel Merchant.
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