Marshall Self is the managing director of finance and travel at Google Canada and Jess Murray is the North America banking lead for Accenture Song. Here they share their advice on key steps that banking’s C-levels should consider to accelerate growth in the digital marketplace. A version of this piece also appears on the Accenture Banking Blog.
How strong is the connection between the chief financial officer and chief marketing officer in banking's C-suite? In this time of immense change and evolving customer expectations, this partnership is critical for banks’ growth.
As with many industries, the pandemic and its associated digital acceleration forced the banking industry to play a more active role in addressing the changing needs of its customers. It is now clear to the banking industry that to remain relevant, the customer experience as well as the business experience must be the focus.
This is where the marketing team plays a critical role in banks’ future, acting as the voice of the customer and driving engagement across the organization. Now more than ever, there is a standout opportunity for the CMO and the CFO to invest time in their relationship and align on value.
While today’s CMOs and CFOs recognize value, they view it — and, more importantly, they measure it — in different ways. Those conversations should be pivoting from budget and cost to growth and how best to measure success.
How can the CFO and CMO move forward together to embrace these value discussions and to build a stronger connection? For the CMO, it's about aligning on value measurement and speaking the CFO's language. For the CFO, it's about gaining a deeper understanding of marketing's role in driving customer-centric experiences.
The marketing team plays a critical role in banks’ future, acting as the voice of the customer and driving engagement.
To start a growth dialogue, CFOs and CMOs can look at the key moments of collaboration for marketing and finance.
Marketing is at times considered a cost centre within the bank. In our experience, it’s often a budget that’s cut, as there is a gap between the value that’s perceived and the value that’s actually delivered. The average financial services marketing budget is now just 7.4% of total revenue, down from 10.7% in 2020, according to a survey by Gartner.1
Furthermore, customers’ touchpoints with their banks are evolving. This has elevated the role that marketing plays in activating meaningful connections, moving from planning experiences to orchestrating them. Customer expectations are shifting, and banks are required to be less transactional and more proactive and advice-driven.
When banks help customers solve problems instead of simply selling products, they open up a much bigger opportunity. For example, search volumes for life events like starting a job or buying a car significantly surpass the search volumes for auto insurance or car products.2 This is where banks can increase engagement with customers, and better serve their needs. Marketing is best positioned to be this connection, but underfunding can make it difficult to win these important moments.
Equally important, CMOs and CFOs can't afford to be misaligned when it comes to what constitutes success and how to measure it. In 2020, as marketing budgets were influenced by the pandemic, Accenture’s global CxO pulse survey revealed a contrast in the top priorities for the C-suite. CEOs stated that “revenue growth through new and existing customers” was the top priority, while CMOs prioritized “reducing the operating cost of commerce, sales and marketing to grow existing customer profitability.”3 Marketing initiatives are not always measured or optimized against the true business goals and, too often, measuring the marketing ROI is a struggle.
Taking the next steps together
1. Walk in each other’s shoes
To determine what resources are truly needed for growth, the CFO and CMO can focus on gaining a deeper understanding of key aspects within each division.
An important step in this partnership journey is working to flip the view from marketing as a cost centre, to the materiality of marketing’s impact on growth and value. By investing time in understanding the customer journey, CFOs are able to address key questions that marketing addresses every day, including:
- How does the bank attract and acquire new customers?
- How does it deepen existing customer relationships?
- How does it retain customers who offer high lifetime value?
- How can the bank track and measure value? (What drives value from a bank perspective to inform the right KPIs down the line?)
Understanding the customer journey, and where there may be underinvesting, will help CFOs make better decisions about the funding of marketing.
Conversely, by spending time with the CFO, the CMO will be better placed to understand how to measure value and link marketing actions to the strategic goals of the organization. Simply put, we see strong results when CMOs invest time in understanding how to quantify the investment in marketing by asking questions, such as:
- How can the ROI in experiences and marketing be best articulated? (For example, by measuring the percentage of sales driven by marketing.)
- How can teams work to understand the full omnichannel impact of marketing across each channel? (For example, understanding the effect of digital marketing on in-branch sales.)
- How can the impact of brand investment on the bottom line be effectively communicated?
While these can be challenging connections to establish, the questions work to support alignment between CMOs and CFOs on the importance of brand health, while setting clear expectations for a longer-term investment to be nurtured.
2. Define success and align KPIs
Together, a CMO and a CFO can refocus the conversation on value measurement by developing KPIs and CPIs (customer performance indicators that measure how the company is performing for its customers) along with frameworks to successfully measure impact and improve value-driven marketing. With this focus on collaboration, a CFO will understand how the CMO’s metrics drive revenue, while the CMO will simplify metrics so they resonate beyond the marketing organization.
These success metrics will focus on the customer journey with attraction, acquisition, and retention information. Take the time to consider:
- New customer quarterly targets
- Number of products per customer (predicted lifetime value)
- Retention rate for customers with high lifetime value
Communicating the value differential between acquiring new customers and deepening relationships with your current customers is key. CMOs can then connect with the CFO and finance team to break down the ROI of each strategy. This improved model will provide greater flexibility for marketing, with better financial controls and guidance.
One great way to approach this is to hold regular meetings throughout the year at which the CFO, CMO, and CEO review KPIs and adjust plans when necessary, instead of a singular annual budget review.
3. Build a framework to improve, scale, and celebrate wins
Track your key KPIs and budgets to jointly optimize shared goals. This could include cutting the bottom 10% of underperforming channels and initiatives and reinvesting that budget in the top-performing channels.
Investing time in developing the CFO/CMO partnership will bring more wins for both divisions.
In the regular check-ins, continue the work to align on KPIs, de-silo, and collaborate on flexible budgets to help ensure money is deployed efficiently and effectively for profitable growth.
Teamwork requires commitment for success. Investing time in developing the CFO/CMO partnership will bring more wins for both divisions and, in turn, growth for the bank. This is not about dramatic changes, but rather giving attention to thoughtful, strategic steps for a deeper connection and team achievements.
The CFO and CMO are the latest dynamic duo in the boardroom — and this partnership can unlock incredible growth. Start the conversation today using these points as your guide.