How to...market your work to the FD: The Marketer - 5th March 2010

Caspar Craven comments in The Marketer Magazine on why marketers may be adroit at advertising but when it comes to promoting their activities to the finance department, they are often slow to deploy their talents.

How to...market your work to the FD

In 1842 Charles Babbage, a British mathematician and engineer credited with coming up with the idea for the first mechanical computer, wrote a letter to the then poet laureate Alfred Lord Tennyson.

In it, Babbage complained that Tennyson's poem The Vision of Sin was factually cumbersome. In particular, Babbage drew attention to the couplet: "Every moment dies a man, every moment one is born."

Babbage wrote: "If this were true, the population of the earth would be at a standstill. In truth the rate of birth is slightly in excess of death." He went on: "I suggest the next version of your poem should read, ‘Every moment dies a man, every moment one-and-one-sixteenth is born'."

The pernickety Babbage clearly wasn't much of a poet. The relationship between finance and marketing often runs along these lines. People holding the purse strings embrace Babbage's love of calculation, while creatives, like Tennyson, claim that emotion beats mathematics every time.

In the context of the workplace this ideological conflict causes tensions that can hobble organisations. Yet often all that's holding marketers back from getting along with the finance director is a failure to choose the right results to report and the right language to use.

 Lose the attitude, bozo

Former Unilever Global Marketing Academy head and CIM fellow Andy Bird says the trick for marketers is to adopt the right mindset from day one. A "them and us" standpoint, he argues, is simply not acceptable - it should be all about joining forces.

"If you take the stance that you are justifying your budget to the board by arguing a case, then really you've fallen at the first hurdle," says Bird, who worked in various brand marketing roles with Unilever before founding his own business, Brand Learning, in 2000.

"You must weave finance into your plans from the very beginning. It's really a sign of failure if you find yourself at a budget or board meeting and the FD is hearing your ideas for the very first time.

"The way to succeed is to work with the finance team more strategically; to think about how campaigns are going to drive business performance," he says.

"Marketers don't often work in isolation, but if you do get to a point where you have to sell a budget out of context then you'll struggle to be heard."

Land Instruments marketing director David Armory says his marketing department made the classic error of not getting involved with finance from the outset, confining its activity to discounting promotions instead of helping to develop a business strategy.

"As the market for temperature sensors and gas monitors became increasingly competitive and commoditised we began to focus on products and to compete on price," he admits. Throwing good money after bad made reporting to the FD a nightmare.

Armory was forced to rethink and he carried out market research to discover who was buying Land Instruments products, how and why, which enabled the business to develop a market focused strategy, from product development to customer retention.

"This model enabled us to outperform similar businesses in the market. Segmentation helped us to identify growth opportunities in a recession, as well as to identify the uncompetitive market segments," he explains. You can bet Armory's FD is not cutting back on marketing spend this year.

It is not a battle for budget, after all, but a co-operative effort toward the ultimate goals of your organisation - be that making money, expanding internationally or saving the world. Marketing is not only about making money for the boss - it may also be about finding ways to waste less of it. Finance is all about counting it - honestly, you make a lovely couple.

Get a reputation

FDs, like the public, often associate marketing with promotion, and forget about all the other work the profession puts in to identifying a market, informing product development, finding opportunities for cross-selling and identifying the customer segments that are not worth targeting.

If you didn't report metrics on all the work your department did in these areas in 2009, you're missing a chance to score points with the board.

Ernst & Young marketing director Andrew Shaylor secured marketing's reputation with finance and the board by working closely with the company's business development strategists.

"The greatest achievement of the ‘Opportunities in adversity' campaign was that it demonstrated the value of marketing, and connected it with revenue," says Shaylor.

He and his team worked with the business development department to carry out market research resulting in a report that not only offered clients valuable insights into their ability to cope with the recession, but which also acted as a device to pull in existing and new clients to discuss ways Ernst & Young could offer them support.

"The campaign was responsible for 20 per cent of all revenues in the period in which it ran," says Shaylor. (For more on Ernst & Young's campaign, see p.50.)

Take nothing as read

In private you might be proudest of the creative executions you commissioned last year, but you need to remind the FD of all the work you did before you got to that point to ensure that your campaign was highly targeted and efficient.

If you've played safe and repeated last year's activity, you need to explain why. To justify a campaign with the words "because we've always done it that way" is tantamount to requesting a P45.

Casper Craven, a former FD and co-founder of marketing consultancy Trovus, admits the words "we've always done this" used to make his hair stand on end. He points to an example of a top accountancy company. For years it carried out the same direct marketing campaign with 6,000 flyers inviting potential clients to visit a section of the firm's website. When Trovus assessed the campaign it revealed that not a single relevant organisation had visited the site.

"From a marketing perspective, doing what you have done before is a safe option, but FDs understand that the world is changing rapidly and will want to know why you haven't investigated new opportunities," claims Craven.
Many consultancies, such as Accenture, Lane Clark & Peacock and Deloitte now offer marketers in large organisations number-crunching services that will compare sales with marketing activity to identify what's working in broad terms.

Remember that sales volumes are only relevant in relation to marketing spend. "The other big frustration was when marketers failed to report the relevance of results," says Craven. "They highlighted volumes and quantities such as column inches and website hits, but not whether the right people were taking notice."

Insead professor of marketing Jean-Claude Larreche says it's easy to waste money chasing sales. If you're promoting a low-cost product to price?conscious consumers, you're likely to achieve a poor ratio between marketing spend and sales volume.

"Brain power rather than spending power solves this problem," he explains. Developing a business strategy from the outset with finance and the board that allows you to position your product at the top end of the market will help you achieve better sales figures with the same, or even less, promotional spend.

Thank heavens for digital

"When marketing people take the time to learn how finance and the wider business view success and failure then their conversations with the FD become much easier. The good news is marketing as a profession is headed in this direction," says Craven.

FDs are beginning to understand that there's much trial and error involved in finding that special something that makes your campaign work, and are helping marketers to opt for more measurable channels, particularly since the recession has made monitoring every penny crucial. Brand building, while not out of favour, has taken a back seat and ROI is the acronym of the day.

Cass Business School professor of marketing metrics and CIM fellow Robert Shaw admits that demonstrating returns ahead of a campaign is hard. But he bemoans countless examples of well known brands that fail to grasp the power of numbers: a brewer that couldn't say to the nearest £5m how much it spent on promotions, a firm with a multi-million pound budget that never analysed its reports and a petrol company that couldn't say how many marketers it employed.

This, for an FD, is a waking nightmare. You can reassure your finance chief with the many digital metrics now available: web analytics and CRM software can help demonstrate - beyond reasonable doubt - that what you do is working.

"There's no question that in the current environment there's quite intense pressure on marketers to look at the effectiveness and efficiency of what they're doing," says Andy Bird.

"It's not about being accountable, it's about being responsible. Although it's tough to isolate the effectiveness of various campaigns, technology helps organisations respond to what they are doing right.

"Some new online businesses do it fantastically well," he says, "they are flexible and nimble and if something is shown to be working they ratchet it up quickly. The model of ‘test, demonstrate and learn' is increasingly important."

Make friends with finance

One way to lubricate relations between you and your finance team is to befriend them. Not only will this ease any tense situations - you might find that a friendly FD will find more time to offer you a helping hand with the metrics.

"Both parties need to move closer," argues Casper Craven. "I'm not saying you must become drinking partners; rather that you should find common ground and take time to understand one another's mindset.

"The dynamics of the workforce are such that the onus is on marketing. In practice, you should spend time with finance, communicate ideas before they become plans and allow for feedback. Steps like these will improve the smooth running of your respective teams," says Craven.

After all, when Babbage wrote to Tennyson 170 years ago bemoaning his lack of scientific accuracy he did so with mirth in mind. He was pulling the poet's leg.

For more information please visit The Marketer magazine.

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