CFOs should care about marketing too

With numerous responsibilities from financial planning to risk management, CFOs wear many hats.

Yet the growth of intangibles means brand image should command greater attention. As brand directly impacts sales growth, hiring success, supplier relationships, customer acquisition costs, and market valuation – monitoring brand health allows CFOs to forecast accurately and make strategic decisions.

By developing cross-functional connections in sales, marketing, HR, procurement and PR – CFOs can keep a finger on the pulse of this key driver of financial performance.

The direct impact

Brand image directly impacts sales and revenue growth. Positive brand perception makes acquiring and retaining customers easier. Quantifying exactly how brand sentiment translates numerically to sales growth enables CFOs to set realistic financial targets during planning.

By maintaining open and regular connections with sales and marketing teams, CFOs can keep a finger on the pulse of brand affinity, consideration, and advocacy – and evaluate the concrete financial impacts to revenue. This allows marketing inputs to demand forecasts, impacted conversion rates to flow into financial plans.

It also facilitates risk analysis on fluctuations in brand image. With collaborative tools like brand scorecards now existing across functions – marketing should become a seamless informant to the financial planning process.

Talent is impacted too

A company’s employer brand affects hiring success, the costs per hire, talent retention beyond compensation, and overall human capital risks. The best candidates proactively want to work for companies with respected brands and culture.

Tracking brand health metrics as a forward-looking indicator allows more informed and measured workforce planning. As well as preventing excessive churn and keeping employee turnover low – reducing recruiting costs and talent acquisition outlays substantially over time.

Forming partnerships with HR gives invaluable insights into human capital risks that link directly back to brand perception and employer reputation. Powerful collaboration tools can connect the dots automatically across applicant rates, brand sentiment shifts and resignation numbers.

Helping CFOs model and predict costs volumes triggered by even small changes in brand equity.

Forging better external relations

Supplier relationships and terms also grow stronger for companies with positive brand images and reputations.

Distribution partners are also more willing to co-invest or offer advantageous commercial conditions based on the predictable scale and reach of strong brands. Procurement partnerships should provide marketing and sales visibility into supplier and partner perceptions tied to brand image and affinity.

This allows CFOs to properly weigh and model the risk-rewards of strategic decisions that may affect brand equity in the supply chain. And build contingencies for any downstream profit impacts if partners were to scale back terms due to brand damage.

Procurement should feed concrete inputs into financial plans on the dollar value of favourable supply chain relationships and terms facilitated by brand strength.

Customer sentiment is vital

In addition, brand damage increases customer acquisition costs substantially if trust or affinity is lost. Restoring consumer brand image requires significant marketing and sales investment over long timeframes with uncertain outcomes.

Marketing and PR relationships allow CFOs to stay closely updated on leading indicators of brand sentiment shifts or incidents which could signal reputation risks. These can feed quantitative models on the financial liabilities of brand recovery efforts or lost revenue. Scenario plans can then give advanced visibility on cash commitments needed to manage or prevent brand crises.

As well proactively right-size budgets if additional marketing spend becomes necessary for damage control.

A greater share of the pie

Strong consumer brands can directly boost market capitalization by influencing independent analyst valuations of trademark equity and deep customer connections.

Quantified as intangible assets, marketing relationships give indispensable visible inputs for properly valuing and positioning the company competitively. They demonstrate the enterprise value unlocked by strategically managing brand image over the long-term. S

hare prices often heavily correlate brand value as it signals competitive advantage, barriers to entry against disruptors and the predictable profits of loyalty.

Marketing partnerships should provide CFOs financialized metrics quantifying brand asset strength and sustainable cash flows over time emanating from brand’s ability to premium price and cross-sell additional offerings cost-efficiently to its base.

What relationships are important?

CFOs need granular visibility into dynamic brand metrics and marketing’s financial contribution to accurately forecast and make fully informed decisions with confidence.

Breaking down silos is no longer enough.

Developing routine integrated rhythms across departments allows keeping pace with the financial heartbeat of brand health – a vital driver of sustained performance.

With tighter alignment, proactive mitigation of brand risks also better protects shareholder value. Ultimately marketing is another window for CFOs into anticipating the future health of the business.