Introduction: My previous introductory article outlined why marketers should take the trouble to study accounting and finance, and explained the similarities and differences between the two disciplines. This second article goes into a bit more detail about why marketing and accounting and finance go together.
In today’s volatile, uncertain, complex and ambiguous environment, it is key that our approach to business prioritises the wants and needs of our identified markets and that we create products (goods and services) that satisfy those desires. To state the obvious, if we want to be successful at this, then the whole organisation needs to be focused on this ⎼ in other words, there needs to be a marketing orientation throughout.
Having a marketing orientation means that it is not enough for our marketing strategy to focus on developing selling tactics to promote our product. Rather, we need to be listening to our markets and designing products that they say they want.
The implication of this is that marketing professionals should recognise they are at the centre of a diverse set of vital interdepartmental projects and initiatives. This gives the opportunity of working with nearly every department in any organisation.
Of course, this includes the finance or accounting department. As an astute marketing professional, you should prioritise making your relationship with Finance a collaborative and collegiate partnership.
Why? Well, let me list some of the key reasons below:
1. Finance gets you the money
Finance is normally one of the most strategic departments in the organisation and works directly with all the strategic managers and leaders to decide what direction the organisation should be heading in. They then have a key role to play in coordinating how to get there, which ultimately means that they help decide who gets money and who does not. They interpret your tactical and operational plans, explain them to higher management, and then translate higher management’s response for you to implement.
Do you want a sympathetic partner? For that to happen, you need to know and understand them. Then you have to take that understanding and communicate clearly the strategic nature of your role to the Finance team. Your strategic leaders will inevitably ask Finance to comment upon the viability of your proposals and if they are given the go-ahead, your performance in implementing them.
I cannot stress how important it is that Finance understands WHY you need extra money and resources to create an online presence or build brand awareness. It helps if you can think beyond the current period and explain the monetary implications for future periods, why you need to add to the marketing team, or what further marketing projects may need to be undertaken.
So, the bottom line to remember is that Finance has an awful lot of influence over the funding for Marketing. Make them your best friend.
2. Finance keeps you on track
It is quite natural for people to want to focus on the main reason for their roles. I understand that most marketers will want to spend their work time (and more, in some cases!) designing and implementing successful marketing campaigns. Everyone wants to do what they enjoy, and that’s usually where they will put their energy.
But if you think about it, and arising out of point 1 above, marketing professionals often have to be accountable for the use of scarce resources that the organisation expects to be used to create value. This is another big obligation ⎼ being responsible for managing a significant amount of money for the organisation. It is probably a sure-fire bet that if you look at the costs of your organisation, the spend on marketing will be second only to payroll.
You have a fiduciary duty to manage that money effectively. Naturally, this responsibility becomes heavier as you ascend the career ladder. The more senior you get in marketing, the more important it is to avoid making a major financial mistake.
You need Finance to help you control the money. They can work with you to forecast, plan and track your expenses in a logical and methodical way.
3. Finance are not so different from you
Inevitably, Finance have a role that is quite different to that of Marketing. However, in some respects, they are not that different. You would probably not ask Finance to come up with a creative marketing campaign (but you might ask them to contribute in some way, even if you are just being polite!).
No, Finance is analytical, and Marketing is also analytical. In fact, I was surprised to learn how analytical when I worked with my first marketing team back in the 1980s. However, finance people generally have the edge in thinking analytically and logically and are well versed in money measurement.
Having Finance work with you to model the results and ensure that the effort makes financial sense is an extremely good idea. And they need you to be able to do this because it is only Marketing that knows the market in enough detail. What are the growth rates in your markets like? What is the next trend? What is the discretionary spend? As a marketing professional, you have to come up with the ideas, but be analytical about it.
If you are good at marketing, then you have to know what makes sense for your organisation. At the end of the day, you are there to increase value, implying that you need to be aware of the fact that your effort will be measured according to a set of key performance indicators. So you need to ask yourself what these are. Generally, these are profit and/return on investment, part of Finance’s lifeblood.
Marketing and finance! Two sides of the same coin?
In my next blog, I will talk about the necessity of finance and marketing teams working closely together.
About the Author – Shaun Bowman
Shaun has over four decades of experience working in finance and accounting based roles. He started his career in the accounting sector and after that worked in the finance and accounting positions for many reputable businesses such as Virgin Media, Baldwin Technology, Hunting Gate Group, Willmott Dixon Group to name a few.
Following that, Shaun moved into the public sector to participate in more strategic work through commissioning infrastructure and services in children’s services, public health and adult services, making a positive impact for county councils and London boroughs.
The know-how that Shaun has gained from working for a range of organisations, from small businesses to international corporations, across the private, public, and not-for-profit sectors has been utilised as a Management Lecturer at several UK HE institutions.
Currently, Shaun is working as an Associate Lecturer with the Open University Business School, and he has over twenty-five years of involvement in the Higher Education sector in the UK and internationally with universities and private institutions.
Melding academic knowledge and pragmatic business experience, Shaun has a multidisciplinary view of business. With an expanding portfolio of publications, Shaun’s research interests are in organisational learning and strategy, especially in small businesses.