The role of chief marketing officer (CMO) is changing dramatically. When I think about marketing leaders in my networks and our customerswhether its B2C or B2Bour roles encompass so much more than bringing awareness to our brand and positioning.
A CMOs charge is to show up as a clear mirror for the organization in terms of where we are succeeding, where we are failing and what our customers want. We are the lens into how we can better position ourselves, our company and our product for future growtha viewpoint that depends on social media.
In the current climate, whether youre a CMO with a background in strategy or demand generation, you will be called upon to communicate the value of social media to your CFO.
But regardless of your background or experience, there are steps you can take to communicate the value of your social strategy to your CFO and other financial peers to help protect critical marketing dollars, even in a down economy.
Before you can successfully advocate for the value of social to your CFO, you need a solid working relationship. Here are four ways to build a collaborative, trusting partnership.
The first step is to understand how your marketing plan, strategies and teams ultimately support the business plan. CFOs are highly attuned to the overall business metrics, so you need to understand their quantitative definition of success in terms of the business plan, revenue and margins.
What are you trying to accomplish? Are you trying to expand into new markets? Are you launching a new product? Are you going to acquire a company?
Once you define what is important, you can attach all of your marketing efforts (and budget requests) to those broader goals.
For example, say one of your goals is to enter the APAC market by 2024. To do that, you will need to invest in social listening to really understand whats happening in that market, and accumulate data that will help the launch with relevant positioning, competitive insights, the right message and pricing.
Social data is a critical source of audience and competitor insightsdata which can give your company a clear edge in the market. These insights can help identify areas of the business that could potentially be at risk, or emerging opportunities your business should act on, which will be meaningful intel for your CFO.
There are some CFOs that get marketing, the brand and the longer tail ROI investments that we need to make for future growth.
If youre working with that type of CFO, explaining the value of social is straightforwardyoure already having quarterly and monthly business reviews and your overall marketing KPIs (including social) are one component of that. Its more nuanced when you are collaborating with CFOs who arent as close to marketing, dont understand its value or even the role of marketing to the business.
You dont need a finance degree to make your case (although taking some classes may help), but you do need to speak in their language. Understand what they think success looks like, and leverage the data that only CMOs have access to help illustrate how your marketing efforts are paying off.
One of the biggest mistakes Ive seen marketers make is when they only speak in marketing terms. No CFO, no matter how marketing savvy they are, will be swayed by impressions or ad conversions.
CFOs are most interested in revenue and cash flow. Aligning your marketing efforts with how youre growing top line revenue, or minimizing operating expenses, will establish rapport and position you as a partner for improving shareholder value. We do that easily at Sproutits why Joe Del Preto, Sprouts CFO, and I have such a trusting relationship.
When you have that relationship, it allows you to raise new ideas or big bets confidently. For example, I know what we have done is working because Ive been able to attribute our previous efforts to revenue. And, I am up front when Im uncertain about the exact payoff of a new campaign, and if it might even be a sunk cost, but its still a learning and growth opportunity for the team.
You wont have all the answers. I think thats where Ive seen peerseven me in younger yearsget tripped up. Theyre trying to create a perfect business case that doesnt exist. As long as the trust is built, we can be up front that we dont know but its a bet we stand behind.
As mirrors into the marketing organization, one of the most important things CMOs can do is provide a lens into what our competition is doing.
Joe and I recently talked about how marketers win in two ways: executing the strategy we know works and testing risks in areas were unsure about, but could be the launchpad for our next stage of growth.
Unless we, as marketers, are taking some of those small risks while continuing to do what works, we will stagnate as a business.
In those types of situations, you need to strike a balance between leaning on your sure-fire strategy and justifying bold moves.
For example, you may allocate your budget accordingly. 60% of the marketing budget and resources are going to be spent on the best practices that we know are going to support growth. Maybe 10 or 20% can be allocated to risks today, but next year we need to move that to 40% because we know we need to prepare for our next level of growth.
This is also another opportunity to demonstrate the power of social data and social listening. For example, with the right platform, we can review audience sentiment and perception compared to our competitorsall in real time. Bringing powerful insights like this to the CFO can help identify risks.
Remember as you continue to build your track record, you will become more confident in admitting the unknown because you will have the data and insights to back up your claims.
Its not uncommon for CFOs, especially in B2B, to push back on awareness-related spend, especially if budgets are tight or the market is uncertain, given its a long-term investment that doesnt have direct, immediate revenue attribution.
Social media investments can fall in this camp, so sometimes we need to identify and communicate an alternative timeline. Consider if this is the right time to make an investment in these longer term brand equity, brand awareness solutions or can we push that off because we have short-term goals that we need to meet first?
Even having an open conversation about prioritizing short-term goals or managing a volatile economy is valuable and important.
You might have to recognize that its a tough market right now, so you will pull back on this investment thats less directly attributable to revenue. But you will come back in six months because we need to get this back on the table, otherwise, were going to have a hard time in 2024 or 2025.
Be realistic when you know something isnt going to have a direct impact, but be confident about making the investment at a later date.
Maximizing the impact social media can have on an organization requires investments in people and the tools. When presenting these line items to your CFO, you need to be prepared with an airtight, data-driven case.
Pinpoint and present how a new approach to social media management can cut costs for the bottom line. Whenever its time for our executive team to begin annual planning and review budgets, I try to identify cost savings that will benefit both the marketing organization and the business as a whole.
I will also bring productivity savings to our CFO. I may say, With this investment, its going to save my team 50 hours a month that we can dedicate to other areas that we werent able to reach before.
For example, we recently commissioned a Total Economic Impact study conducted by Forrester Consulting which found that Sprout drove $973,000 in productivity and efficiency over three years for a composite organization. Over that same time period, brands were also able to eliminate manual data aggregation for monthly reports by 75%giving social teams more time to act on insights rather than compile them.
Presenting potential cuts and productivity savings like these show you understand the full business perspective, not just the marketing perspective, of your spend.
Marketing tech stacks are always under scrutiny, especially if there are many solutions under a budget. Proposing investments that consolidate or simplify your existing stack can help demonstrate the value of a new solution.
According to the Total Economic Impact study, the composite organization saved $473,000 over three years by consolidating legacy solutions into Sprout Social. The organization was able to stop paying fees and eliminated two legacy solutions to save nearly $200,000 annually.
Any sort of consolidationwhether thats consolidating a public relations platform, a listening platform or a publishing platformis powerful. Having a tool that is compatible with other pieces of your tech stack, like your CRM or business intelligence solution, will drive even more savings.
To prove the ROI of social, you need to be fluent in your CFOs language. Framing your efforts and communicating how they are connected to larger operational goals is the fastest way to break through.
Download the Total Economic Impact study today to learn why we believe Sprout is the best solution for making a swift impact across your business.
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Demonstrating the value of social to your CFO - Sprout Social