Why CMOs Hate CFOs

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I told you why CFOs hate CMOs. It’s time to put the shoe on the other foot.

In an interview on What CFOs Expect From Their CMOs, one CFO was quoted as saying:

“Being a numbers guy, I think everything can be measured. From my perspective—and I know this is an idealistic thought—you should be able to get everything down to a formula-driven type of ROI.”

The CFO’s comments are bullshit. CFOs routinely approve requests from IT for routers and servers without quantitative proof of ROI. When was the last time HR had to show the ROI of a training session?

Everyone knows that there is no ROI on a router or server or on an employee training session. But poor old Marketing has to show an ROI for every one of its expenditures.

My take: CMOs resent CFOs because they feel that marketing is held to a different or higher standard.

CFOs will read that and say “not true — it’s about accountability. We want more accountability from marketing.”

Nice try, beancounterboy, but your six-syllable word isn’t the issue. It’s a four-syllable word that’s at the root of the problem here. In-fra-struc-ture.

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It wasn’t always that IT got away without showing an ROI for stuff like servers and routers. But over time CIOs successfully demonstrated that there’s something called an IT infrastructure that’s required for a lot of things to happen. Nobody wants to spend more than they have to to create this infrastructure, but management came to realize this one very important fact:

There is no ROI on infrastructure. Infrastructure is an enabler. It enables other “things” to happen — and it’s those things that produce (or don’t) an ROI.

HR doesn’t talk explicitly about an employee infrastructure, but no one disputes the notion that employees need skills and knowledge to do their jobs, and that training programs ostensibly improve those skills and knowledge levels (arguing about the effectiveness of training programs is outside the scope of this post, and blog altogether).

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But there is no marketing infrastructure, is there? I don’t mean a marketing technology infrastructure, like CRM apps. I mean, more akin to concept of an employee infrastructure, that there is no explicit recognition of — or need for — a customer relationship infrastructure.

Here’s the premise:

There are “things” Marketing has to invest in, that in and of themselves produce no direct ROI, but are necessary for a successful customer relationship to develop.

What are these “things”?

1. Maybe advertising. According to Yahoo! Research:

“Estimating advertising cost-effectiveness is akin to measuring a relatively weak signal in a sea of noise.”

If that’s true, then, if there is an ROI to advertising, it’s pretty much impossible to measure, right?

But maybe the purpose of advertising, is not to produce an ROI. Maybe the purpose of advertising is to create awareness for your company, and to establish a positive image for your company in the minds of customers and prospects.

The actual ROI — the sale of the product or service — comes somewhere down the line, but couldn’t be done (or done as efficiently or effectively) without the customer relationship infrastructure (i.e., awareness and positive image) produced by the advertising.

2. Maybe social media. Maybe there is no ROI of Facebook or Twitter. Maybe having these “things” creates awareness and positive image. Maybe it creates a platform for customer and prospect engagement that enables something else — for example, a marketing campaign with specific offers and messages — to happen that actually produces the ROI. 

3. Maybe [you-fill-in-the-blank].

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So CMOs hate CFOs because the latter want quantitative proof of ROI for every expenditure, which the former can’t provide. So what do CMOs do? The make shit up. And that’s why CFOs hate CMOs.

This problem isn’t going to solve itself. CMOs need to create and hone a definition of what a customer relationship infrastructure is composed of, and what it requires. And then educate CEOs and CFOs — just like CIOs did — on this notion of a customer relationship infrastructure.

It’s a constant battle in IT over how much to invest in IT infrastructure, and it will be a challenge to determine the right amount of spend on customer relationship infrastructure. But that battle — over how much to spend — is different than fighting over the precision of, or accountability for, an ROI calculation.

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