The current macroeconomic scenario requires thoughtful decision making and accurate measures on the return of each initiative. The focus on financial-driven metrics has been particularly challenging for marketing functions as they try to overcome the misconception of being a cost center and prove their multiplier role for the business.
Three groups of corporate barriers hinder marketing’s ability to establish itself as a source of value creation: Data collection and integration complexity; lack of integrated and shared business KPIs; and existing organizational structure and governance models.
The new CMO and CFO collaboration paradigm unleashes marketing’s potential. To make the most of the collaboration, the two functions must adopt a customer-centric approach and identify clients’ current and potential value—both in the short- and long-term—by embracing the notion of customer lifetime value (CLV) and using advanced marketing technology tools.
The new paradigm can overcome corporate barriers with the following solutions:
- Data collection and integration: gathering first-party data; integrating different sources of information within a customer data platform; and using machine learning algorithms
- Integrated and shared business KPIs: identifying and monitoring performance marketing KPIs (business-driven, customer centric) in real time with a marketing and finance dashboard; measuring “intangible” brand marketing campaigns both with simple models such as NPS and awareness as well as more complex ones like multi-touch attributuion and marketing mix modelling
- Organizational structure/governance: embedding the relationship between CFO and CMO to allow for cross-fertilization of competencies between functions; and developing more sophisticated budgeting tools such as outcome-based budgeting for performance marketing and financial planning for branding initiatives