Communicate by the Numbers with CFOs
My friend, a marketing specialist, once told me how she really feels about accounting and finance people: "When I listen to you guys talk, it's like you speak in some secret language. I don't understand any of it."
To some extent, she's right. When we talk shop, we constantly use very specific jargon: prepaids, accruals, principles of conservatism (and we don't mean politics), return on investment and so on and so forth. Every profession has its own terminology, but I agree that ours may seem a bit peculiar to an untrained ear. Unfortunately, that and our affinity for accuracy and details contribute to the persistent communication barrier between finance and other corporate functions—including marketing.
Nevertheless, as Yoda might assert: Communicate, we must. In the case of marketing, every program requires fiscal approval, so that it can become a line in the budget with sufficient monetary allocation. You may have the most brilliant idea, but if you don't have funding to implement it, it will remain an ephemeral dream. The interrelation with finance is unavoidable.
It is, therefore, vitally important to be aware of the simple fact that, in the eyes of finance, marketing is a cost center that adds to the company's operating costs, while having an unknown impact on revenues. It also has a profit-and-loss responsibility that directly affects the company's bottom line. As long as you and your projects are perceived as just expenses eating away the precious margins, there always will be tension in communications and resistance to your requests.
Turn It Around
There are three keys to turning around this negative perception and working more effectively with finance:
1. Treat them as more than purse holders. Ultimately, there is one fundamental prerequisite for establishing any successful human connection, finance or otherwise: Know your audience and understand people's motivations and priorities. When dealing with your colleagues from finance and accounting, you should be able to gather insights into who they are, explain reasons behind their conduct and anticipate their reactions. Only then can you take full advantage of the communication process and successfully realize your intentions. Instead of treating them as the ones holding the purse, get them on your team and make them your business partners.
2. Speak the same language. Thankfully, we do have a common language that can be used to facilitate mutual understanding: Both marketing and finance operate with numbers. Try to spin your budgetary needs in terms of the net benefits, emphasizing the end results you expect to achieve after the allocated funds are put to use.
Most likely, you already have the pitch and the supporting data ready. You've probably studied the demographics, the attainable market and the probability of customer/consumer interest—and you've done demand modeling and analyzed the pricing climate. All of that information can be translated into the ultimate target: revenue and profit projections.
Don't forget that your audience is inclined to deal with something tangible. You will not succeed with a vague description of future gains.
3. Cultivate a holistic attitude. I will share a little secret with you. We finance people are very receptive to progressiveness. In the past 10 years, the corporate environment has changed dramatically—and chief financial officers, controllers, budget managers and financial directors no longer act as simple bean counters. Today, financial professionals exercise a holistic approach to their duties. This means that the company's healthy growth and development is as much their primary concern as it is yours. Always keep in mind that you, your teammates and colleagues in other organizational functions are all in the same boat, rowing toward the same goal of your company's survival and success.
I talk about the interconnection of organizational functions to all department heads and team leaders. I cannot claim that everyone is quick on the uptake, but some people adapt very fast. One marketing manager, for example, would preempt every project discussion with the same opening: "You are going to love this one!" Then he would proceed with charts and graphs, showing me the possible market share, the probability of customer acquisition, the competitive pricing and so on and so forth. When he finished with the cost estimate, I had enough data to assess whether the investment would yield continuously positive results.
His enthusiasm and professional camaraderie always ignited the cooperative spirit in me. This doesn't mean that I blindly signed off on whatever price tag was attached to each proposal, but I would immediately spring into action, jotting down numbers and calculating cost per acquisition, profit per unit, rate of return ...
So, next time you face the challenge of having your expenditures approved, try to be conscious of what motivates the person on the other side of the table and remember that a discussion of future monetary benefits is like a balm for financial ears. Trust me, the control panel of the communication road is within your reach. You just need to turn on the green light.
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