Why and How Successful CMOs Are Partnering with CFOs for Growth

Why and How Successful CMOs Are Partnering with CFOs for Growth

Healthcare systems need to accelerate growth. Meeting this imperative requires a transformation in the way C-suites operate, blurring the lines between functional silos. As the top financial strategist, the chief financial officer (CFO) can provide valuable guidance and influence to the chief marketing officer (CMO) in shaping their marketing budget and strategies. However, if the CFO and CMO fail to collaborate effectively, that friction can impede overall business growth.

According to a 2023 survey of more than 275 marketing executives across industries, more than a quarter of CMOs describe their CFO’s willingness to collaborate as indifferent (26%), even hesitant (7%). At the same time, more than half of CMOs report their CFO is at least willing to collaborate. To close the gap, the CMO and CFO need a mutual understanding of how they can become a power duo that drives organizational success. Here’s why this partnership is so critical and how it can be cultivated.

Why Are Successful CMOs Collaborating with CFOs?

By having the CFO as a partner, the CMO gains a champion at the decision-making table for allocating resources toward marketing. The CEO, board of directors, and other stakeholders rely on the CFO to determine key strategies needed for the organization’s success. When the CMO is intertwined with the development of long-range financial planning, marketing strategies are aligned and prioritized.

When CMOs and CFOs collaborate, they can foster better communication and unity between their functional teams. This partnership can ultimately ensure success in achieving shared revenue goals. Together, they better navigate the planning and execution of organizational strategies, steering clear of mere wishful thinking.

What Can the CFO Offer the CMO?

The CFO naturally focuses on the return on investment (ROI) of different business activities. As budgets fluctuate, the CFO aims to guarantee that marketing investments effectively drive the company’s financial prosperity. To do so, they look at data.

A Data-Focused Perspective

When health systems take a data-driven approach, they best deliver on growth strategies. CFOs are well-positioned to analyze and interpret financial data. By building strategies and plans rooted in finance insights, such as payer and service mix, and incorporating financial metrics, such as customer acquisition costs and closed-loop patient contribution margin and profitability metrics, into their reporting, CMOs can tell a more robust story. And as marketing plans evolve, CFOs can help establish clear performance indicators to measure the effectiveness of marketing efforts.

An Ally in the Boardroom

Through their unique perspective and expertise, CFOs can bring added value to marketing discussions with the CEO and the board. They can help remove barriers by providing quantifiable metrics that clearly capture profits and losses. The CFO and the CMO can then present an aligned vision of where the organization should continue to invest in marketing activities.

5 Ways CMOs Can Work Better with CFOs

It’s clear there is currency in a collaborative CFO-CMO relationship. But how to cultivate that partnership? Here are five ways CMOs can get CFOs on their side.

1. Develop a Measurement Framework for Your Marketing Efforts

Vanity metrics that don’t directly address the organization’s business goals and financial objectives will not impress the CFO. CMOs should work with CFOs to develop marketing metrics that identify leading and lagging indicators over longer periods of time. Organizations that align on these metrics within the C-suite generate high revenue growth, according to a 2022 survey of more than 1,000 C-suite executives.

Choose marketing metrics that matter—the key performance indicators (KPIs) that can be linked back to profit. These include:

  • cost per lead
  • cost per conversion
  • conversion rate
  • marketing-generated and -qualified leads
  • marketing-influenced opportunities and closed business

2. Demonstrate a Commitment to Data-based Decision Making

Without a strong business case backed by data, CFOs often categorize marketing as an expense that provides questionable return. The marketing team should justify plans and strategies with data-driven insights into market trends and consumer behavior, not by hunches or personal preferences. This analytical approach can demonstrate constraints for mitigating risk and exposure.

3. Optimize Your Current Marketing Budget

The CMO should be able to demonstrate prudent spending of their budget. Before asking for more funding or support, marketers should verify their existing efforts are cost efficient. Even small efforts, like auditing tools or capping the total amount spent in one tactical area, can add up to big savings.

4. Build a Mutual Understanding

Marketing and financial teams may find it difficult to reach common ground when each side thinks and speaks differently. To bridge the gap, both teams can develop a shared language to ensure the most effective communication and comprehension. By doing so, both teams can then collaborate to establish a clear and cohesive strategy, a tactical plan, and assessment of results.

5. Keep in Close Contact

CMOs should actively seek opportunities to maintain frequent communication with the CFO. By doing so, CMOs can ask questions and gain a deeper insight into the broad range of concerns on the CFO’s mind. These include capital strategies, debt management, and other concerns CFOs must synthesize and juggle in real time, every day.

CMOs can stay connected, regardless of the work environment:

  • Foremost, align the Strategic Marketing Plan with the organization’s Financial Plan.  Partner with the CFO to understand the assumptions underlying the plan to demonstrate how the team’s work is rooted in, and driven by the financial model guiding the system.
  • Engage the CFO in regular conversation regarding the progress of both the Marketing and Financial plans. Ask about environmental and performance changes that are impacting the Financial Plan.
  • When working in an in-person environment, CMOs should choose to work in close proximity to the CFO. This could be as close as next door.
  • When working remotely, CMOs should schedule periodic calendar time with CFOs to chat via phone or video.

Are You Ready to Tap the CFO as a Powerful Ally in Healthcare Marketing?

Healthcare marketers know what they do is valuable. But they don’t always know how to articulate the power of a brand to not only attract patients but also improve the revenue strategy. Watch our webinar on CMO-CFO relationship building for perspectives from real marketing and finance leaders from Unlock, Orlando Health and Mass General Brigham. Click below to save your seat.

Already in ongoing strategy conversations with your CFO? Learn how to more effectively demonstrate marketing ROI with Unlock ROI Insights.