Don’t just have conversations with finance when it’s budget time
The key to a good working relationship between marketing and finance? Don’t make every conversation about money – that’s the advice of Boots’ CFO Michael Snape, who was talking alongside CMO Pete Markey at the Festival of Marketing: The Year Ahead this week.
A good working relationship comes down to “relentless communication”, ensuring the marketing strategy fits into the wider business strategy to build trust and alignment, and using “as much data as you can”, he said.
“Pete and the team don’t just come and have conversations when they’re asking for more investment or it’s budget time. They actually spend a huge amount of time with me and other members of the exec team… to really explain what they want to achieve and why. So there is a real push to get buy in,” he explained. “You see and feel their excitement. They really want you to get it.”
By having conversations that extend beyond money, Snape said it brings the business closer together and creates trust. Marketing is no longer a separate entity disconnected from the rest of the business because, as Markey said, “as a CMO you need to have a narrative behind your function”.
“They don’t just spend time talking about returns and investments, they actually go into the heart of what we’re trying to do and therefore get buy-in around the table so everyone understands what we’re trying to achieve in the long term as well as in the short term,” added Snape.
There should never be a marketing strategy that doesn’t link to the business strategy.
Pete Markey, Boots
A recent example is the discussion he and the marketing team had around Boots’ upcoming Christmas ad and who was going to front it.
“It wasn’t a conversation about money. You could see how excited Pete was about the concept and the advert, and how it fits in with everything else. When you have somebody really put the time in to have you understand and get it, then when the money conversations come around you’ve got so much more context and it makes the whole thing a lot easier,” he said.
Snape also highlighted the company’s decision to increase marketing spend last summer, despite revenue being in decline thanks to reduced footfall on the high street because of the pandemic.
“In the past, Boots particularly, and many businesses would have cut back on advertising and promotional (A&P) spend and been trying to find money through the P&L. We actually increased it. I think it’s the first time in our history that we were having a tricky year and we decided to put more money into A&P investment rather than less,” he said.
“We could do that because we had the confidence that it was going to work, because of the constant communication, the data and the engagement that was driven by the marketing team. It wasn’t the case that they came and asked for it; if anything we both said to one another ‘can you do a bit more’, and it worked out really well for us.”No more ‘good old Boots’: How new CMO Pete Markey plans to drive reappraisal
Markey said the constant communication between marketing and finance has also given the marketing team licence to try new approaches, such as its sponsorship of Love Island this summer.
“That was a new move for Boots; talking to a slightly different, younger audience in a way we’ve not done before,” said Markey. “We’ve not done a partnership like that where our products featured in the show, so being able to talk about that, the strategy, the intent, what we wanted to do, how we wanted to demonstrate our credentials… was really helpful because it became more than money, it became about our strategic intent and what we were looking to do for the brand and the business.”
The relentless communication between the teams has also enabled Boots to find the “sweet spot” when it comes to talking about short-term and long-term goals.
“The level of communication has to be really strong. [We have to be able] to talk about the narrative of what we’re trying to do as a marketing team, how that fits into the broader narrative of growth for the business and how the two connect up,” he added.
“There should never be a marketing strategy that doesn’t link to the business strategy. Often they are two different things and you think how did that happen? But the marketing strategy should be part of the business strategy.”
Markey said he and Snape have signed off plans for this financial year and the next two years. “We’ve got a really clear narrative in the business strategy of components that are completely about marketing but are superglued into the business strategy. So what we’re doing is helping to drive business growth, but with some components of that driven within marketing,” he explained.
“It’s key that your marketing activity is central to what the business is doing and not adjacent to or alongside it. It has to be the critical growth driver.”
How to get CFO buy-in
For any marketer still struggling to build a closer bond with finance, Snape went back to the point about moving conversations beyond the transactional.
“It’s really important you don’t make every conversation you have with finance about money. Spend time talking to your FD about what you’re trying to achieve – nothing to do with investment or returns or anything else. Have them want to get it,” he said.
“They’ll really appreciate that because often we’re treated like a bank and people only come to you if they want something. If you invest that time and say I really just want you to understand what we’re trying to do, they’ll absolutely love you for it.”
He said it’s important to realise that marketing and finance are still “two quite different worlds” though, so marketers shouldn’t assume their CFO will understand some of the more granular details around channels and digital.
“Don’t be scared to explain things in quite simple terms,” he added. “They’ll really thank you for it because often they’ll be too embarrassed to ask… If you help people understand it and get it, as well as having the money conversations, you’ll have a much better relationship.”
When you have somebody really put the time in to have you understand and get it, then when the money conversations come around you’ve got so much more context.
Michael Snape, Boots
Being able to prove the value of what marketing is doing is also key. Marketers should ensure they’ve got the data to support success and show when things have worked, because “we do like numbers”, Snape joked.
A recent study by Forrester found that just 28% of B2C marketing leaders feel confident in their ability to accurately measure and attribute the incremental business value of their marketing efforts, though.
In order to remedy that, Snape said when it comes to metrics there are three things to bear in mind. Firstly, he said: “Don’t wait and do great big pieces of analysis at the end [of a campaign] and then work out whether something works or not.”
He advised marketers to “get as close to real time information as you can, even if it’s leading indicators, so… everyone has a good sense about whether something is working or not”.Inside Boots’ mission to create a ‘world class media agency’
Secondly, he told marketers to always try and be scientific. “If everybody is very clear about what you’re trying to achieve as a business and where marketing fits in to that, then it’s not just the very direct KPIs on that marketing investment that matter. It’s things that may have nothing to do with that particular piece of activity,” he explained. “But, of course, that activity impacts on the whole so look at all the KPIs that you can get on how your customers are perceiving you, not just ‘did sales of category X go up or not’.”
Lastly, he urged marketers to be honest about where things can’t be measured.
“Too many times people try and invent justifications or analysis, which apparently tells a fantastic story but when you get under the skin of it, it’s not always directly correlated with what they’ve actually done,” he warned.
“When you can’t measure something be honest about it and say why it fits into that broader strategy, why you’re trying to do something that maybe we can’t directly attribute to value, then you can understand how it fits into the broader piece.”