CFOs: Don't be afraid to invest in marketing

It is impossible to ignore the state of the global economy currently. The perfect storm of a pandemic and Brexit has left the UK economy battered and bruised. This has resulted in a cost-of-living crisis which has affected every single corner of the world.

I have worked with business owners in scaling up their organisations for over twenty years and it is fair to say there is a general feeling of uncertainty out there. However, entrepreneurs and business leaders are an interesting breed. They generally can move forward and seek pivots or new opportunities. There is certainly cautious optimism in the marketplace currently.

Is now the right time to scale up? There is never a bad time to scale up.

As a CFO you are integral to the scaling-up process. The financial decisions that you make will have implications on how the business moves forward and grows. Building a business takes years of planning and an uncertain economy can present challenges, but it can also present opportunities for growth.

A clearly defined strategy to increase profits is paramount. By leveraging the right strategies businesses will have a better chance of growing profit.

As a CFO you may feel that marketing is not your remit. Technically it probably is not. However, in terms of budgets and growth, this is an area where money should be spent.

Using marketing strategically to increase brand awareness and attract new customers in difficult times is key and very often not considered important by businesses. Over the past twenty years, I have seen how the right kind of marketing attracts more customers to a business.

For example, digital marketing and public relations is a good place to start. These are two areas that will help to expand your online presence. It is important to allow for marketing spend in your budget when looking towards scaling up.

If it is used correctly, marketing can be a powerful tool for increasing profits, but it needs to be used strategically and understood to ensure its effectiveness.

As a CFO, getting comfortable with what marketing consists of and how it works is important. You will want to see a clear return on investment. By analysing historical data, market research, and projections, you will be able to estimate your expected revenue growth, customer growth, and or profitability generated by marketing expenditures.

A really good example of marketing spend is a client I am working with, Spotlight Sound. Spotlight Sound is an AV installation and event production company. This year the company has seen exponential growth, doubling its workforce. Revenue for May was up by 98%. The aim is to continue to grow the team.

CEO Sam Dimond is concentrating on doing this through marketing. He says: “I will continue to grow my team so that we can deal with the vast amounts of work coming through our doors. However, growing my team relies on people knowing who we are and what we do. It is about building our reputation and being visible. I had never really considered the importance of marketing before.”

Diamond says he is concentrating on raising the business’ social media profile and organic public relations which will see them featured in the press. “I believe that the bigger our profile the easier it will be to hire and the more contracts we will be able to take on. I don’t think that you can do that without a solid marketing plan,” he says.

Scaling up means focusing on engaging with new customers and people within your industry. In tough economies, I have seen companies pulling back on marketing spend. This is likely down to a lack of understanding of what marketing is and does.

It can seem like the easiest place to cut spending. To cut marketing means you are cutting visibility in the marketplace. In an uncertain economy such as this business growth will rely on new customers being able to find you.

It is worth saying that marketing spend needs a strategy. CFOs should assess whether their marketing investments align with the company’s overall strategy and objectives.

Marketing must be able to support key business goals like increasing brand awareness, driving sales, expanding market share, or entering new markets.

Working closely with a marketing manager or department to establish key performance indicators (KPIs) and metrics will help you to monitor the effectiveness of your marketing campaigns. It will help you to work out if adjustments or reallocations are needed.

The decision to allocate funds toward marketing as part of a growth and scaling-up plan is a strategic one. It requires careful monitoring of the financial implications and potential returns. By considering these factors, CFOs can make informed decisions on spending money on marketing initiatives that support the company’s growth and profitability objectives.

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