Within any business the finance and marketing functions usually have limited interaction. However, the consequences of Covid-19 and technological advances around business analytics may see a change in this relationship. As organisations increasingly utilise data to formulate decision-making, the gap between finance and marketing may well shrink.
Data-driven businesses believe they have a competitive advantage. After all, data-driven decisions are a fundamental element of business life: predictive analytics as part of R&D, artificial intelligence (AI) within IT support, and business intelligence to manage major portfolios. However, the adoption of data-driven marketing is more limited to advertising placements, customer profiling and personalised experiences.
Establishing a data-driven strategy gives confidence that marketing activities contribute to winning work
Post-pandemic, businesses concerned with winning work need to review how marketing activities will support opportunity generation. Reduced budgets and smaller marketing teams (the Chartered Institute of Marketing in the UK reports that just under 10% of marketers have been made redundant during the pandemic) mean organisations need to adopt a smarter marketing approach to support winning work.
Establishing a data-driven marketing strategy for 2021 allows a business to have confidence that the marketing activities will be contributing to winning work and generating the required return on investment (ROI). When resources and budgets are limited, it is vital that the marketing activities can demonstrate they are contributing to bringing in business.
Who should lead?
While marketing remains the natural domain for the sales and marketing team, using the skills of a finance professional to lead and review the marketing strategy provides several benefits. The ability to analyse data on revenue, client lifetime value, levels of engagement and impact of spend means that decisions around the marketing strategy can be made using substantiated, robust data.
One example of where this has happened successfully is at Harwood Hutton, a firm of accountants and business specialists, where Adam Stronach, a corporate finance expert, heads up the marketing function. The executive team believed that changing their approach to marketing would contribute to both client retention and new work for 2021.
Stronach led the review programme to analyse the data and performance information on clients, channels, budget ROI and engagement levels. The data was held in different repositories, but by bringing it together through the review it allowed the marketing team to have transparency around those marketing activities that clearly contributed to winning work.
‘There needed to be a clear line of sight between the marketing activities and the opportunities being generated’
The firm used the five basic principles of creating a data-driven marketing strategy:
- defining the marketing objectives to be achieved
- gathering data from across the different data sources
- collecting and collating the data around clients, channels and competitors
- establishing trends and insights to identify the most valuable marketing activities
- transposing findings into a practical marketing plan.
‘The pandemic in 2020 meant that our marketing plans for last year became radically altered,’ says Stronach. ‘This gave us an opportunity to review our total approach, so we could look at how we could get smarter at marketing. For us, it was ensuring the marketing strategy was aligned to the corporate objectives, so all the activities were linked to delivering on our key results.
‘There needed to be a clear line of sight between the marketing activities and the opportunities being generated. By analysing the data we held, monitoring the competitive market and reviewing the performance of previous marketing activities, we were able to see where to focus for maximum results in 2021.’
Create a smarter marketing strategy
There are a number of data areas that can help the FD to create a smarter marketing strategy. However, the six key ones are those with measures that allow the marketing performance to be tracked:
- Strategy. Ensure the marketing strategy is aligned with the corporate objectives. Use this to establish and track key performance indicators to determine the marketing contribution.
- Marketplace. How are competitors responding to the challenges post-Covid? Consider what is best practice and how the business can emulate this.
- Customer. Interrogate databases and systems to establish profiles, revenue spend and services procured. Understand who are the critical top clients and how vulnerable they are post-pandemic.
- Channels. How are your digital channels such as website, social media, platform contributions and email campaigns performing? Are they increasing traction and generating calls to action? Analysing where they fit into the overall customer journey and which have the most valuable interaction will help to determine budget allocations to maximise returns.
- Events. There has been a strong move towards online events during the past 12 months; this brings both cost savings and the ability to reuse content more effectively. Evaluating uptake and opportunity generation from previous events decides the nature and regularity of events for this year.
- Budget: Reviewing the return generated from 2020 marketing activities will reveal where the real contributors to winning work lie. This verification should allow an overall ROI to be finalised.
Adopting a data-driven approach to marketing means the organisation is able to approach winning work in a far more effective manner. The analysis a finance professional can bring in scrutinising the data means that the marketing strategy is focused on delivering the corporate objectives in the most efficient way.
While the day-to-day marketing activities remain within the remit of the marketing team, the CFO can play an important role in transforming the marketing strategy into a business-centric contributor.