As a CFO, you have the critical responsibility of overseeing your organization’s financial health. Your job requires you to balance expenses, investments, and revenue to ensure sustained profitability. But as businesses continue to grow and expand their reach, the CFO’s responsibilities have evolved beyond just crunching numbers. Today, CFOs are expected to deeply understand marketing and its impact on the company’s bottom line. Why? Because marketing plays an essential role in generating revenue and creating a positive image for your organization.
Unfortunately, some CFOs still view marketing as a separate and somewhat inconsequential part of their job. This attitude is based on the misconception that marketing is a cost center that only generates expenses, while finance is responsible for generating revenue. At first glance, it might even seem like a CFO’s primary objective of cost reduction clashes with the CMO’s goal of driving growth. However, this view is shortsighted and ultimately harmful to the organization’s success.
In fact, CFOs and their fellow CMOs share a lot in common. Both have the highest turnover rate in the C-suite, ranging from 35 to 41 months. And that’s not all. Both positions constantly have to educate others about their roles while also navigating the competing priorities of various stakeholders to achieve their objectives.
The reality is that marketing is an investment that can deliver significant returns if executed correctly. By understanding the impact of marketing on your organization’s financial health, you can make better decisions that balance short-term expenses with long-term revenue growth.
In the end, companies will be truly successful when finance and marketing work together harmoniously. Here are five common marketing myths CFOs need to stop believing to yield positive results:
Common Myths about Marketing
Marketing equates to short-term lead generation.
Marketing is often mistakenly reduced to generating quick leads, but that’s just a small part of its scope. The truth is marketing encompasses a broad range of activities aimed at creating and maintaining a company’s brand reputation and value over time. It’s comparable to a balance sheet that reflects a company’s assets and liabilities, showing its long-term value.
Focusing solely on lead generation can have a negative impact on a company’s future prospects, especially when marketing tactics are sacrificed to achieve short-term gains. In contrast, brand building focuses on creating a positive perception of the company, which can lead to prolonged customer loyalty and business growth. Thus, the misconception that marketing is just about lead generation must be debunked to recognize the significant role it plays in building a company’s brand value.
Marketing can be turned on and off as needed.
Consistency is key when it comes to marketing. Treating it like a tap that can be turned on and off at will can have serious consequences for a company’s growth and profitability. Marketing efforts need time to gain traction and establish a connection with customers. Once that connection is made, it is essential to maintain it to keep customers engaged and faithful to the brand.
Additionally, cutting marketing efforts can also harm a company’s reputation and brand image. If customers suddenly stop seeing or hearing from a company, they may assume the worst and question its viability or trustworthiness. This is especially true in today’s fast-paced digital world, where customers have access to a wealth of information and can quickly form opinions based on a company’s online presence.
In essence, B2B marketing is not a temporary fix or a one-time project that can be turned on and off at will. It requires consistent effort and a long-term strategy to build a strong brand and maintain customer loyalty. Cutting marketing efforts may temporarily yield cost savings, but in the long run, it can have a significant negative impact on a company’s bottom line.
All marketing should be immediately quantifiable.
Marketing encompasses a wide range of activities that may not produce immediate quantifiable results, such as brand building, storytelling, and reputation management. While it’s essential to track and measure marketing performance, solely focusing on quantifiable metrics can hinder the effectiveness of marketing strategies. The value of marketing goes beyond numbers, and it’s crucial to consider the lasting impact of marketing efforts on the company’s overall success. By recognizing the value of non-quantifiable activities, companies can better align their marketing strategies with their broader business goals.
Marketing isn’t as important as sales.
While sales may seem like the primary driver of revenue, marketing plays an essential role in the buying cycle. With changing buyer behavior, the importance of marketing has increased significantly, and companies need to prioritize marketing for top-line growth.
The modern buyer is more autonomous and discerning than ever before. They spend more than 50% of their journey doing autonomous research online rather than speaking with sales reps and require 27 touch points, on average, before converting. Forrester explains that “A sales- and marketing-aligned demand management process leads to better conversion rates (pipeline-to-close ratio) and higher average deal sizes.”
Marketing is not just about generating leads and creating brand awareness. It also involves building relationships with customers, understanding—and anticipating—their needs and preferences, and creating tailored messaging to attract them.
In today’s competitive market, where buyers have more choices than ever before, effective marketing strategies can make the difference between success and failure. It’s crucial for companies to recognize the importance of marketing in the buying cycle and prioritize it alongside sales for top-line growth. By working together, marketing and sales can create a seamless customer experience that not only drives revenue but also builds sustained brand loyalty.
PR or earned media isn’t necessary for a company’s financial success.
Brand reputation and storytelling are crucial aspects of corporate development. And while your company must tell its story through owned media (your website and blog, for instance), having others tell your story or validate your credibility can be even more powerful.
This is where public relations and earned media come in. When a reputable third party, such as a trade publication, respected podcast, or subject-matter expert in the space, validates your products and services, the expertise of your CEO, or some other aspect of your company—people are more likely to believe it, causing your brand awareness and reputation to grow and improve. A strong brand reputation leads to shorter sales cycles, higher revenue, increased customer loyalty, and it can even lead to talent retention and employee engagement.
Ignoring the importance of earned media in the overall marketing strategy can be a costly mistake for any business.
If you want PR to have an even more direct impact on sales, look into sales-enabled PR. And if you’re ready to build a harmonious relationship between finance and marketing to see just how much marketing can impact your bottom line, reach out.