Do you feel like your marketing and finance departments are at constant loggerheads? That your finance can’t see past their budget and that your marketing can’t seem to understand the importance of cost implications and forecasting? You just want to grow your business and keep it profitable, so why aren’t the finance and marketing teams helping?
This is an age-old problem and being married to a finance director I can confirm that it’s not always smooth sailing (only joking darling!). Seriously though, marketing and finance departments can often clash, and this can be detrimental to your business goals.
I want to help business owners overcome the obstacle so I tackle the issue below and look at why there is often friction, why it’s vital that this is avoided, and some simple way you can foster cooperation between departments.
In difficult trading conditions, it is even more important that your finance and marketing teams work well together so here’s my thoughts on how to encourage the departments to work well together as both are crucial to business success and growth.
The Traditional Marketing vs Finance Problem
Whether you’re a small business with a single employee responsible for each department, or a larger entity with multiple offices and department teams, clashes happen. This isn’t something new. It’s been happening for decades in business and two departments that traditionally don’t align well are marketing and finance.
Due to the nature of these two departments, there is often a them versus us mentality and as business owner it’s important that you prevent this from happening and foster positive relationships so that marketing and finance work together.
Finance – The Level-Headed Numbers Driven Department
On the one hand, finance is concerned with numbers, budgeting, and controlling expense. They usually have a factual and grounded approach where everything must provide value and be accountable. You can understand this as a business owner as you want to cover costs and hopefully make a profit.
From a financial perspective, marketing is often seen as this weird and wonderful entity that seems to eat away at their carefully arranged budget often without any cold hard returns. The accountant may view marketing expenditure as a cost rather than an investment in business growth.
Marketing – The Carefree Creative Department
On the other hand, marketing is often seen as all about creativity, driving growth, and developing the businesses’ brand image. It’s traditionally seen that marketers don’t consider the financials but instead concentrate on their creative vision and how they can make the company shine.
Of course, this is not the case with all marketers as some realise the importance of making a return on the company’s investment in marketing. Although some brand building is often needed too and measuring returns on this type of activity can be difficult.
However, from a marketing perspective, the finance department is often viewed as this all-controlling limiting demon that seeks to undo the marketing department’s work and prevent them from creating anything meaningful due to ironclad budgets decided by the finance department.
Why it’s Important to Avoid This Battle
The above is traditionally how these departments work and this is not conducive to good business. It creates a difficult scenario where each individual or team is working against each other. Ultimately, this results in both departments being less effective than if they combined their efforts and looked to align their goals.
An Aligned Partnership is Vital for Your Business Goals
Disputes and lack of communication between marketing and finance can stifle your business growth. Marketing feels like they don’t have enough financial resources to make a difference, while finance feels like marketing is asking for too much or not delivering real results.
No one benefits.
This is because finance needs marketing, and marketing needs finance. Your marketing team needs financial resources and budgeting to be able to do their work and invest in their strategies. Similarly, your finance team needs marketing to deliver positive results, keep customers coming back, and provide cash flow via sales.
Marketing Gains Clarity and Fixed Parameters to Work Within
When your marketing team has the support, understanding, and backing of finance they can push forward to help boost your brand, bring in new sales, and grow your customer base.
It gives them the freedom to flourish and pursue the ideas they want, but with a clear budget and understanding of the financial implications of their decisions. Growth is encouraged, but the cost of that growth is based on sound numbers and clear returns are expected.
Finance Gains the Ability to Forecast
When your finance team has cooperation from marketing, they can accurately forecast expenditure and create more realistic budgets. They understand what the marketing department wants to achieve, and the potential returns that their strategies could generate.
This allows them to set appropriate budgets that give room for growth, while still being realistic and in line with your businesses overall financial plan.
How to Make Finance and Marketing Work Together
So, we’ve considered the eternal battle between marketing and finance and why these two departments must work together. Now comes the fun part – finding a way to make the departments and individuals work together. The reality is, is that all it takes is communication and understanding, but there are ways you can do that which I discuss below.
Communication is Essential
The first thing to address is communication. Your two departments can’t work in a vacuum. They have to communicate regularly to foster cooperation and avoid confusion.
The simplest way to do this is by having a regular interdepartmental meeting or review. Perhaps once a month or quarterly depending on what you think is appropriate. This meeting can be used to discuss strategies and look at financial forecasts.
It is also a great opportunity to discuss new marketing plans going forward and review current strategies to see if they met their goals and were financially viable. Forecasting under or over-expenditure can also be discussed before any issues arise enabling both teams to clearly understand what is happening and how budgets may need to change as activity moves forward. This is especially important if an activity undertaken by marketing is providing improved results as more budget may be appropriate to enable continued and potentially faster growth with cashflow considerations also considered by both departments.
Regular communication ensures that both departments know what the other is doing, what they expect from each other, and enable better planning moving forward.
Full Transparency Leaves no Room for Confusion
I’m sure as a business owner you’ve experienced the issues that a lack of transparency causes. When someone doesn’t understand the reason for a decision, it leads to confusion and can cause problems. If you want your marketing and finance to work together, transparency is vital (where appropriate).
For finance, they need transparency on the expected end results that your marketing strategies provide. What positive benefit is the marketing team expecting? The acquisition of new customers? An increase in sales? Also, they need transparency on the cost. With a clear cost and expected return, finance has something tangible to work with.
Let’s look at an example. Your marketing team approaches finance about a PPC strategy they want to launch – they have no clue about expected budget and can only give vague figures about an expected increase in website traffic and enquiries or sales. How is finance expected to work with that? In an ideal scenario, marketing approaches finance and states their PPC strategy needs a budget of £500 per month, which will based on a forecast deliver a 20% increase in website traffic and a 10% increase in enquiries. This is definitive and something finance can use.
For marketing, they need transparency on the available funds and why budgets are set in the manner that they are. If the marketing team has a clear understanding of the upper financial decisions and reasoning, they can tailor their strategies and set realistic expectations based on the financial requirements.
Always Think of the End Goals
If your two departments have separate end goals, how can they be expected to work together and deliver great end results?
I understand that shared end goals aren’t always possible, and teams do need their own targets, but if you can, give your marketing and finance teams something to work towards together it will make big difference.
For example, perhaps you set the joint goal of achieving a 10% increase in new customer acquisition for the first quarter of the year. With this goal, your marketing and finance can sit down together and look at how this can be achieved.
Marketing can provide different strategies on improving growth, and finance can then analyse these and look at the wider impact they will have on your balance sheet and profitability. A realistic budget can then be set that gives marketing what they need to achieve the goal while still adhering to your overall business financial plan.
Give Your Marketers Responsibility For Revenue and Profits
One of the best ways to align Finance and Marketing is to give your marketing department and Marketing Manager or Director responsibility for revenue and profits, and even provide bonuses based on them achieving the goals. Make Finance aware of these goals too and again even bonused on them and suddenly you’ll see that the teams can work well together and help you grow your business.
One of the jobs I loved as a marketer when I worked in house was when I was Market Development Manager at Bostik. Why? Because I was responsible for the revenue and profit for my area of the business. This provided me with an incentive to work with the Finance and Sales teams, and even the Chemists where I looked to improve the profitability of products by reducing the product cost with the help of the Chemists.
Aligning targets and incentives across departments is a great way to get your whole organisation working together towards the common goal.
Align Your Marketing and Finance for Improved Business Growth
I hope you can see the benefits of your marketing and finance teams working together. Their cooperation ultimately drives your business forward and keeps things heading in the right direction.
Your finance team can keep things controlled, while giving marketing the necessary means to implement profitable strategies. At the same time, your marketing team can do what they do best, build your brand and generate leads and sales, but in a safe framework where costs don’t spiral out of control.
It’s your job as the business owner to foster a cooperative relationship between the finance and marketing departments. By doing this, your departments will work together to help grow your business in a sustainable and profitable way.
We can assist too using our years of marketing knowledge so please, if you need a hand, please feel free to get in touch and book a strategy session where we can look at your marketing plan and see how it can be transformed while remaining financially viable.
