The following is an article translated by Heidi Holmström, Vaimo's Marketing Coordinator, from a Swedish language article from CFO World's interview with Vaimo's CEO, David Holender. Click here to read the original article.
As a CFO (Chief Financial Officer), you are the expert when it comes to everything that is going on in the company, but are you equally up-to-date with what is going on around you and how it affects you? If the answer is no, then it might be time to have a coffee with the CMO (Chief Marketing Officer) and start collaborating.
In one of the latest surveys conducted by management consulting firm EY, 54% of CFOs in large companies state that their collaboration with the CMO has increased over the last 3 years. This is a good starting point, but in some areas, there are still major obstacles in the cooperation between the CFO and the CMO; this often depends on the CMO’s drive and view on digitalisation, which may remain a mystery to the CFO.
At most companies, major changes go hand-in-hand with a digital transformation. As CFO, you are busy transforming the company from the inside out; for example, you may get started with advanced data analysis. Time is allocated to the implementation of new processes, outsourcing and automation, and besides that, it's business as usual.
The CMO is also busy with digitalisation, but from a completely different angle. Think about the new digital customer, who's always online. She is tech-savvy, refuses to wait, switches between her smartphone, laptop and tablet, and when in contact with companies, she expects to have the same user experience, regardless of channel. In contrast to the older generation, this approach to technology and news characterises an early adopter, and applies to the majority of the younger generation.
Mobile dependency reaches new heights when more time is spent on sharing your life with casual acquaintances online, than socialising with close friends IRL. When all apps automatically know who you are, what you like, and what you did recently, consumers become more self-centered than ever before. Consequently, browsing an online store that always starts out on a generic start page, and that asks you to login every time, becomes a pain. The bad customer experience spreads like wildfire amongst loved ones, not to mention casual acquaintances. The CMO’s task is to always know what the customer thinks and feels, which means that the CMO sees digitalisation from the opposite end, where the customer is in focus - digitalisation from the outside in.
The fact of the matter is that digitalisation occurs exponentially much faster compared to 5-10 years ago. The behavior of young consumers is changing so rapidly that the older generation does not stand a chance of keeping up. Traditionally, when it comes to large companies, the younger target group is often under-represented, which can lead to the failure of digitalisation. The reason is that the younger generations do not recognise themselves and cannot see the benefit in the changes being made, as they are too far removed from their own reality. It is not difficult to understand that the costs of these failures are high and one of the main reasons why the CMO and the CFO need to collaborate earlier in the process.
The CMO continuously collects data, and the evolution and interpretation affects the CFO’s decisions.
- The customer’s preferred payment method such as Klarna, Paypal, or credit/debit card can affect margins.
- User behavior on the site affects strategic decisions; for example, the peak times that people are most in need of support and where in the world it should be situated so that it is available at the right time.
- Bounce rates and data from social media can provide indications of the competitors you are loosing traffic to, and how this affects the stock price or the company’s Employer Branding.
- Common KPI’s, such as traffic, bounce rate and interactions on social media, help both the CFO and the CMO work towards common goals.
- Even if more internal meetings are not the most popular suggestion, it is the only way to increase effectiveness, since communication increases the understanding of each other’s tasks, incentives, and goals.
- For example, getting involved in the end user experience tests conducted by the marketing department is a way for the CFO to be part of how new messages are received and how new strategies should be developed.
- Increasing collaboration and being open to each other's perspectives can reduce cultural differences between departments. The first step is to understand why the other person reacts the way he or she does.