Business Goals, Budget & Buy-In: 10 Ways to Foster CMO + CFO Alignment

I have always believed that you can’t expect to achieve a goal — growth, especially — if you aren’t willing to put budget and resources against it. This is especially important in tech, where the only way to remain relevant and competitive is to continuously be innovating.

Rise Interactive has been on a double-digit growth trajectory for many years, and to sustain this level of growth, we’ve continued to invest in key functional areas like marketing, sales, and innovation. But doing so, I have learned, requires a special recipe of collaboration across our executive leaders and our CFO, David Zuaiter, to gain buy-in and alignment. It is David’s job, after all, to be convinced that any additional dollars we put toward marketing and other efforts will generate an ROI justifying the expense. 

A couple of years ago, I challenged David to focus more time as a growth-minded CFO — to take more responsibility for revenue and to think beyond the expense side of the business. At the same time, I challenged Natalie Scherer, our head of marketing, to understand what kind of data CFOs need to see to feel good about the budgeting decisions they’re making. At Rise, we talk about several principles we believe brands should be thinking about, and the last but not least of these is “prove it” — build an infrastructure using data that everyone sees and believes for themselves so that we can collectively and proactively make investment decisions that ultimately lead to outsized growth. 

I sat down with David and Natalie to find out what the process has been like for them, what they discovered along the way, and what key takeaways they have that may be of benefit to other growth-minded companies like Rise. Here are 10 best practices they’ve honed over time, that you and your Finance and Marketing leaders may find useful:

1. Start with the company's strategy— not a number.

Keep in mind that every department in an organization is in direct competition for budget dollars, and what’s necessary is to prove why dollars are better off going to Marketing than, say, another Sales function or IT.  Start with the company’s three- or five-year strategy, determine to what extent Marketing is essential to driving the strategy to achieve results, and make the case to allocate dollars accordingly.

2. If you're the CMO, come armed with the right data.

If you’re the CMO, start by sitting down with the CFO to understand what number makes him/her most happy and then work backwards from there. For example, Natalie started out with monthly pipeline reports — how big the pipeline is and how much of it closed — and then started adding more nuance, such as data showing which brands were indicating interest in Rise through various tactics (the Rise website, account-based marketing, etc.) but weren’t in the pipeline yet. “One slide I show every quarterly review is the number of brands who know Rise now who didn’t know us six months ago,” Natalie says. “While it’s not revenue yet, David has been more open to viewing that type of data as progress rather than getting stuck on the very end result.”

The process has evolved to where Marketing is now able to show Finance all its tactics and the clients Rise has won from each. “Historically, I don’t think we realized the data the Marketing team had,” David says. “Based on Natalie’s data, we can see the pipeline, we can see the top-five clients and where they came from — big events or the marketing website or referral or something else — and then determine where it’s worth investing more money.”

3. If you're the CFO, think of yourself as a business partner— not a cop.

If you’re the CFO, think of yourself as a business partner rather than a policeman. Marketing is your client, and you should work to develop a strategic relationship with them. Instead of just saying “yes/no” to their requests, work with them to find a solution by thinking creatively and looking across the organization to provide the resources they need to drive the collective success of the business.  “This is where the biggest changes have happened as I’ve gotten engaged in revenue and come to appreciate more the importance of topline,” David says. “It’s not just focusing on EBITDA; it’s driving the right revenue. And what I’ve learned is that I must start with Natalie because she’s the one with the funnel for all revenue coming in. And if we get that right, that’s going to result in winning the right types of brands, and that’s where our company is going to blossom and where the future resides.”

4. Establish a common language with your data.

Building off of the first point, Marketing must analyze their data through the lens of how Finance views success. “We took Natalie’s numbers a step further to understand what activities generated new clients that were right for Rise from a margin and longevity standpoint,” says David. This led to mutually agreed upon decisions based on how the findings aligned with the corporate strategy. “If the data doesn’t drive decision-making, then it has no value,” David says.

5. Check emotions at the door.

Let the data tell the story and keep emotions out of the decision-making process. “I believe there’s an exception to every rule, but when emotions are engaged, everything becomes an exception,” David says. “This is the hardest thing to do, but I believe it’s why we’ve been successful.”

6. Set realistic expectations.

Important to the process is frequent communication and setting the right expectations for how much time it will take for investments to prove out. “If David gives me $50,000 more in January, it’s not going to mean we win a client in February for our business,” Natalie says. “Our business has a long sales cycle. Setting those expectations — saying to David’s team, ‘we’re going to test this tactic, and we’re going to collectively evaluate it a year from now’ — helped us avoid the constant ‘is this working, is this working yet.’”

7. Establish trust through transparency.

Sometimes the data doesn’t always paint a pretty picture, Natalie says, but when there’s trust between the CMO and CFO because Marketing has been transparent with Finance, it’s less likely that Finance will lose confidence in a program and do away with it prematurely.

8. Realize the value in progression.

Accept the fact that things don’t happen overnight and realize the value in progression. It may take three to six months to see results, but by tracking your progress, you can also pivot when you see you’re getting traction. “Because of the way we’re sharing and tracking data, we can say to Natalie, the numbers look good so go ahead and spend another $50,000 or $100,000 toward this effort,” David says. “Where in the past I might have held back because I wasn’t sure what we’ll get out of it.”

9. Don't jump to conclusions.

Don’t panic if something doesn’t necessarily work the first time. Conversely, don’t claim too much victory when something does work.

10. Bring others into the loop.

Engage your Marketing and Finance teams in the process of analyzing the data and looking for ways to grow revenue and utilize those dollars effectively. For that matter, share key data with your whole organization so that they can see the progress your company is making and how they play a role, all of which leads to better results for everyone.

Final thoughts

Looking back on all of this, David and Natalie made it look easy even though none of us would tell you it was. They broke the mold. Growth doesn’t just materialize out of thin air, but I do think people can make magic happen when companies commit to three important things:

  • Have a vision of growth — set the tone across your organization that growth is your imperative and that you’re going to pursue it properly, taking a data-driven approach.
  • Bring on two remarkable "A-Players" like David and Natalie, challenge them to think differently about their respective roles, and give them the space they need to figure out how best to work together and use data in a way that we can all be on the same page.
  • Give it time to work. This isn’t about instant gratification — it’s about outsized, sustainable growth.

Which of these points resonates most with your executive team? Message me so we can keep the conversation going.

01/26/2022 at 05:36