Whether your goal is to obtain a seat at the table or to prove the value of Marketing, you need a viable relationship with Finance. Unfortunately, too often, there is a disconnect between the marketing and finance departments. That gap can lead to various challenges for marketers, including the obtaining of approval for Marketing's budget.
Finance works from the general ledger, which contains all the accounts for recording transactions relating to your company's assets, liabilities, owners' equity, revenue, and expenses. One of the key accounts is marketing, which often contains what are known as subaccounts. Those subaccounts might be advertising, events, PR, etc.
Not surprisingly, then, when Finance asks Marketing for its budget, our first inclination may be to organize our investments by these subaccounts and submit our budget accordingly. But here's the rub! With this approach we leave ourselves wide open for questions such as these:
- Why ads in these publications?
- Why so many webinars or tradeshows?
- Why so much money for the email automation platform?
- Why so much money for new content?
And, right away, we're playing defense!
And we are then at the receiving end of all kinds of suggestions from our partners in Finance for how to reduce our spending. Before we've even gotten out of the gate, our budget is eroding.
If that scenario doesn't describe your world, congratulations! If it does, here's the shocker: It's your fault.
As marketers, we need to think beyond the subaccounts in the cost accounting system, and understand how the dollars we're requesting are actually going to move business needles.
Businesses are based on revenue and profits generated by customers who buy our products/services—hopefully, profitably. That is the very essence of Marketing. Accordingly, we need to think about our budgets in terms of the customers and what they buy.
Take the first step (it's free).
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- Data Troubles: What If You're Trying, But You Still Don't Know Much About Your Customers