The age-old tussle between Marketing and Finance (and making the business the winner)

There’s no doubt that in businesses, big and small, the tussle between what Marketing wants to spend and what Finance wants to give is real! 

From the start-up - where you are arguing with yourself wearing both hats and seeking clarity from the accountant - up to the corporate brands with ‘Heads of’ each side to debate budget, it’s an age-old theme… finance is trying to save the money and marketing wants to spend, or should I say reinvest it. 

It’s the brief that’s at odds, really. Successful marketing inherently involves a degree of uncertainty and experimentation. It often requires taking calculated risks to discover what resonates with the target audience to drive results. 

Accountants, on the other hand, are typically focused on minimising risk and maintaining financial stability, focusing on cost reduction and efficiency. Often naturally risk-averse, which can hinder the agility and innovation necessary for effective marketing. No wonder there’s a clash! 

It’s a battle that has claimed many a brand, as without the right investment, the marketing strategy just can’t hit the planned figures, so more savings need to be made, and so the downward spiral continues.

Growth gets in the way 

It’s bang-your-head-against-the-wall crazy, but when you put it on paper, it’s growth that can often get in the way. You have £X amount in the ‘marketing’ line of the books (as per the budgets agreed last year), and all has been going well. That £X has been split accordingly across your marketing ops/agencies. 

Then hurrah, sales get traction, a campaign takes off.. and the tussle begins - the marketing strategy needs the business to double down on success and put support in place for further growth…the fixed line on the budget says ‘No!’ 

Looking at product-based marketing as a fixed cost rather than a variable cost will limit that ability to ‘double down,’ stifle innovation and experimentation (which quite frankly is a need, not a want from team marketing) and miss potentially huge revenue opportunities.

Teaming up and striking a balance 

On the happy flip side, the product brands we see enjoying stable (or indeed exponential) growth have one thing in common - their ‘Heads of’, support a joint commercial vision, and each appreciates the value of the other. Finance strategy supports and invests in the marketing plan - because they know that they’re playing for the same team and investing in sound strategy, and Marketing, well they just want to deliver the sales to keep bankrolling it all! 

How to get that balance? Like most things in business, it’s a balance of data, goals, structure and communication, and honestly, the best long-term marketing strategies are based on the numbers before vision, so collaboration is really the backbone of success. 

Understanding the data and those metrics that matter is our first go-to. It’s hard to argue with numbers, and when they are clearly supporting the goals, then we’re over the first hurdle. 

What does the data say to date? (conversion rate, acquisition cost, average order values, most profitable products etc), what realistic goals can be set around these? ….and how can these be extrapolated to form part of not only the marketing plan but also the financial business plan? The financial knowledge crossed with engagement stats from platform analytics will help create more lucrative campaigns. For instance, we have a Nutshell Ads budget calculator that we can plug in metrics from team finance to influence our campaign plans.

Fostering growth with marketing as a variable cost

It’s a shift for many,  but when your marketing is treated as a variable cost instead of a fixed cost, magic happens. 

Innovation, experimentation, flexibility and scaling all become possible…and you haven’t compromised risk because the numbers are still at the core of everything.

The long-term, lifetime view

Bigger and bolder. When you make marketing a variable cost, financial-based decisions on the lifetime value of a customer, as opposed to a single purchase value, it unlocks growth potential further. 

For example, if you know from the data that your average order value is £50 - based on margins, etc., £15-20 might be a realistic customer acquisition cost goal to set for paid social. However, if you also know that customers of that product, on average, reorder and spend £380 across the lifetime of their relationship with your brand, a customer acquisition cost of £80-100 would still be hugely profitable but would change the game wildly for team marketing with investment that fosters growth strategies.

Overall Benefits

When the team goal is growth, it’s key for the ‘Heads of’ Finance and Marketing to work together and support one another, whether that’s just a single operator owner or separate teams.

In achieving this, there are gains for both sides: more certainty of expenditure and measurable KPIs for team accounting and budget autonomy, and realistic clear expectations for team marketing. Everyone wins. You just need the right strategy in place.

Need help nailing a performance-based strategy? Book a discovery call today to tell us more about your business challenges, and we can get you on the right track.