The Importance of CFO Buy-In for Retail Success
No retail journey is complete without the buy-in from your CFO. CFOs play a crucial role in approving investments and ensuring that the company’s financial goals are met. It’s essential to bridge the gap between marketing and finance to secure necessary investments.
Meet the Panelists
A group of CFOs discussed how you can win over your CFO for marketing and ecommerce investments:
- Alex Goldelman, CFO of Uniqlo
- Susan Weisel, CFO of Brooklinen
- Alex Brocklehurst, SVP & CFO of Coach
- Emily Culp, Chief Brand and Strategy Officer at BodyHealth (Moderator)
Watch the replay or read the recap below.
Building a Strategic Partnership
Emily Culp emphasizes the importance of a strategic partnership with the CFO. This collaboration focuses on setting KPIs, driving business performance and risk mitigation. Transparency and frequent meetings with the CFO are crucial for building trust and driving value creation. A study by KPMG and the CMO Council found that only 22% of CMOs feel they have a collaborative relationship with their CFO, highlighting the need for improved partnership.
Aligning on Vision and Goals
Aligning on a long-term vision and shared goals is the first step in fostering a successful partnership between CMOs and CFOs. These goals should include both financial and non-financial metrics, such as customer engagement and brand health. A shared framework for decision-making and investment measurement is essential.
At Uniqlo, teamwork is the foundation. The leadership team, including the CEO, aligns on goals, initiatives and expected outcomes, creating a cohesive strategy that minimizes friction between finance and marketing.
The Role of Trust and Transparency
Trust is a critical component of the CFO-CMO relationship. CFOs should not be seen as mere scorekeepers but as partners who surface numbers and align on business trends. This trust allows for open discussions about initiatives and resources, ensuring that both sides work together towards common goals.
It’s important to recognize that not every business initiative will succeed. Learning from failures and maintaining a feedback loop between teams is essential for long-term success. A culture of transparency and mutual trust helps in navigating these challenges.
Crafting a Compelling Business Case
When presenting a business case to the CFO, early partnership with finance is crucial. This collaboration helps shape the business case with a financial context, ensuring its success. Visibility into assumptions and clear timing for measurement are also important factors.
One common issue is the assumption of incremental growth without considering potential cannibalization. Accurately estimating cannibalization rates is essential for realistic business projections and ensuring sustainable growth.
Balancing Short-Term and Long-Term Goals
It’s important to balance short-term financial performance with long-term strategic investments. For example, shifting marketing spend from lower funnel to upper funnel can drive long-term brand growth, even if it doesn’t yield immediate financial returns. This requires patience and trust between the CFO and CMO.
Innovative marketing strategies, such as repositioning a brand or shifting focus to new customer segments, can take time to show results. A strong partnership and shared belief in the strategy are essential for navigating these transitions.
Leveraging Digital Innovation
Digital innovation plays a crucial role in modern marketing strategies. Experimenting with different approaches across the funnel can help in understanding consumer behavior and optimizing marketing spend. For instance, top-of-funnel initiatives like influencer marketing or TikTok campaigns can build brand awareness and drive long-term growth.
Understanding the relationship between different parts of the funnel and their impact on overall business performance is key. Consistent measurement and adjustment of strategies ensure that marketing efforts align with business goals.
Triangulating Data for Better Insights
Relying on a single dataset can be misleading. Triangulating data from multiple sources provides a more comprehensive view of business performance and helps in making informed decisions. This approach ensures that marketing strategies are based on robust data and align with overall business objectives. For example, using AB testing, geographic analysis and product-level insights can provide a clearer picture of the impact of marketing initiatives and help in optimizing resources.
Key Takeaways for Marketers
Building a strong relationship with the CFO requires transparency, trust and frequent communication. Aligning on shared goals and leveraging data for informed decision-making are essential for securing investments and driving growth.
Understanding the financial metrics and valuation multiples that drive business success can help in crafting compelling business cases and gaining CFO approval for marketing initiatives.
Conclusion
At the 2024 CommerceNext Growth Show, we asked our industry-leading speakers to leave the audience with three key CommerceNext Steps to take back to the office. Check The CommerceNext Steps here.
