Advertisment

How can CMOs and CFOs better their partnership to establish trust and transparency?

Speaking on Day 1 of Cannes Lions 2023, the CMO and CFO of Mastercard, Raja Rajamannar and Sachin Mehra, delved deeper into why tension exists between the finance department and the marketing department of a brand and how can a better partnership be created

author-image
BestMediaInfo Bureau
Updated On
New Update
How can CMOs and CFOs better their partnership to establish trust and transparency?

Taking to the stage on Day 1 of Cannes Lions 2023, Mastercard’s CMO and CFO spoke on one of the key topics of the brand world - the constant conflict between the functions of marketing and finance, albeit in reference to the slashed budgets owing to economic headwinds or getting the right RoI with adequate budget allocation.

Kickstarting the talk on “Happy Tension: The Power of CMO and CFO Partnership”, Raja Rajamannar, Chief Marketing and Communications Officer, Mastercard, shared certain percentages and facts. 

“It's shocking that less than 40% of the finance people think that marketers can make sound commercial decisions, leaving the remaining 60% on the negative side. But this is reciprocal. Less than one-third of marketers feel that finance people understand marketing and they are making decisions based on knowledge. As a result, neither marketing guys know what the finance people do, nor the finance guys think that marketing people really don't know how to make proper decisions and hold themselves accountable amongst others,” he said.

Sachin Mehra, Chief Finance Officer, Mastercard, shared that while both CMOs and CFOs are on the same team and aim to achieve the same objective of driving shareholder value and creating reference amongst various stakeholders- be it the employees or the community, the tension between both these business functions stems from the lack of trust.

“One way to address the trust issue is ensuring robust communication so that the two can have great clarity and transparency, and lastly, the two need to collaborate and that too effectively so as to get the effectiveness level high and the tension level low. When we think about communication, it's not just about what you say, it's about what you hear and how you listen as well, and making sure that we're both having the mutual respect to understand what each other is talking about and not talking across each other, but actually trying to understand each other's point of view,” he said.

He then went on to state that while it may sound quite basic, the reality is that all human beings have got their own agendas and therefore like to think only about what they want, which is why they always think that the other person really doesn't understand what they're saying. But in reality, it is all about spending time to actually communicate effectively.

“The second area is around what we call clarity, and this is around providing the right level of transparency across both organisations- what is it that we as a finance organisation seek and desire and what is it that the marketing organisation seeks and desires and then to establish objective metrics to get there,” he pointed out.

He also elaborated that the other must-have is around collaboration which in itself deals with organisationally setting the right structure to ensure that it is scalable and tenable. 

Rajamannar further pointed out that from a historical perspective, between CMOs and CFOs, or broader than that in terms of the marketing department and the finance department, there has been an absence of trust followed by a deep sense of suspicion, consistently.

“As marketers, we are also guilty of perpetuating this kind of a situation. For example- when the CFO or CEO ask the marketer what did the allocated marketing budget do for the business, the marketer's response is qualitative in terms of brand awareness going up, the number of impressions garnered, funnel efficiency and brand preference moving up, etc. which are all important, but not the actual answer,” he said.

He then went on to add that most marketers resort to responding with marketing jargon to answer financial questions time and again and owing to the lack of trust, one often tends to try and hide details on the budget because if the CMO shows that there is an ‘x’ amount of money available in the brand’s kitty, there is a constant worry that the finance team will take it away.

“Many times we don't do our own diligence properly as marketers when we have been given the responsibility by the company, we have an accountability to demonstrate the results that we are driving. We need to connect the dots between marketing actions and business outcomes, not just in terms of marketing metrics, but we often don’t connect them because many a times we don't even care to measure,” he stated.

To cut through this tension, Rajamannar shared the marketer’s perspective and mentioned that marketers, first of all, need to be confident that they have nothing to hide and that both they and the finance team are in it together to accomplish the company's objectives, hence there is no need for fluffy answers.

“When we claim that we have done a fantastic campaign because it has given great results, it is we are talking about ourselves. But when the CFO on the marketing area goes and tells the finance team about what it is the particular RoI on the campaign, there is a higher level of credibility. So, there's a basic level of transparency and trust on one end and at the other, there is a buildup of the credibility itself, and that’s what works extremely well for Mastercard,” he said.

Sharing the finance team’s perspective on the same, Mehra said that there are certain views and points of opinion from the finance team as well as it all relates to what it mean to build a brand. 

“When we think building a brand, we think brand valuation, when we think about fuelling the business, we're saying how are we driving the bottom line of the business and then when we think about creating competitive advantage, it's around driving profitable market share. At the end of the day, what the marketing organisation is doing is exactly trying to achieve these, then finance happens to be different than the lens with which the marketing department looks at it,” he said.

Delving further into the same, Rajamannar pointed out that while the CFO looks at brand valuation, marketers emphasise on relatively softer metrics such as how is the brand reputation doing, what is the sentiment around the brand, what is the kind of brand strength, what is the attribution of what marketing is doing to build on recognition for the brand. 

“When you’re looking at fueling the business, the three pillars for marketing- build the brand, feel the business, and drive competitive advantage, are all a mission which deals with why we exist even as a department at MasterCard,” he said.

Similarly, when the CFO is looking at fueling the business, he’s looking at the bottom line and the marketing person is trying to look at what are the top-of-line metrics, what kind of lead generation has been amassed, what kind of lead or conversions ratios have been garnered, what kind of new product platforms or bundles are being created, etc. But then what does it translate to the bottom line is what the finance person is going to be concerned about, he added.

In terms of competitive advantage, it is all about looking at the market share in terms of what is the preference for the brand, whether is it really giving one an advantage competitively, what is the trust factor in the brand, what is the affection that people have for the brand, etc.

Speaking about the marketing ROI for the brand, Mehra stated that the first and foremost necessity is to have relevant metrics, not just for marketing but for finance as well. Secondly, it is important to measure them credibly with full integrity in terms of what numbers are being reported. Post this, one needs to have transparent reporting in a dashboard because it is the one thing that enables one to understand where the money is being spent exactly in terms of product, geography, initiative, segment, etc.

“The heart of being successful in this has got to be around making sure we check our egos at the door and that’s true for both the finance and marketing organisation because at the end of the day, it’s not about our personal agendas but for the betterment of the company. The tension will always be there, but if these are done, then it will be a happy tension,” Rajamannar stated.

Info@BestMediaInfo.com

brand objectives fluffy numbers credibility happy tension CFO Trust Cannes Lions International festival of creativity Mastercard Cannes Lions 2023 CMO Raja Rajamannar and Sachin Mehra
Advertisment