How Marketing and Finance Think Differently

This is a fictitious story about the wide gap and personality differences between the function of the chief marketing officer (CMO) and that of the chief financial officer (CFO). I made up the two characters in this story. But how different might they be from a real pair of a CMO and CFO that you may know (or who works for your employer)?

The haunting question

My fictitious CMO and CFO, Sandy and Jim, are both men, but their gender would not alter this story. They were hired into their C-suite roles at the same time about a year ago, and both were recruited from other companies.

Sandy and Jim have both had enough time in their first year to stabilize the moderately disorganized departments they inherited from their predecessor CMO and CFO that they replaced. Each of them feels that their time and opportunity are now to make real progress and substantial improvements for their company.

Last week by coincidence of timing Sandy and Jim met at the coffee station on the floor of their offices. The story’s plot began to thicken when without giving it much thought Jim, the CFO, asked Sandy, the CMO, what Jim considered to be a straightforward question. Jim asked, “Would marketing and sales behave differently if they knew how profitable to our company each of our company’s customers is? They currently know the amount of sales from each customer reported from the billing system, but the sales and marketing staff do not know the amount of profits that each customer contributes to our company’s bottom line.”

There was a long silence. Jim wondered to himself, “Ooh. Maybe Sandy thinks I’m intruding in his affairs.” Sandy eventually replied to Jim, “Hmmm. Let me think about that for a while. I’ll get back to you.” They then returned to their respective offices to resume the routine daily toil of their job and duties.

Second thoughts from the CFO’s question

Later that day Jim became uneasy. He began worrying if with his question he had adversely affected what until then had been a friendly relationship with Sandy and Sandy’s marketing team. Jim thought to himself, “I know it was just an innocent question. But golly. If all that marketing and sales focus on is increasing our market share and growing sales, then they may not be thinking about growing the most profitable sales.”

Meanwhile later that same day Sandy pondered Jim’s coffee station question. It stimulated Sandy to think about one of their customer segments that his marketing staff had just initiated a targeted marketing campaign to promote selling their kitty litter product. The promotion’s theme was “scoop that poop.” Sandy began to worry. He thought to himself, “I wonder if that theme might offend come of our customers and in turn their retail store consumers. Is this a problem?”

Third thoughts about the CFO’s question

The more that Jim thought about his chance coffee station encounter and his offhand question to Sandy, the more that Jim began to worry. Jim thought to himself, “I know that we have a wide range of low to high maintenance and demanding customers independent of their sales volume they purchase from us. I wonder if Sandy understands what differentiates the most profitable from the least profitable customers to us – and worse yet unprofitable customers. I wonder if Sandy knew this information if it would change his thinking and mindset about the marketing deals, offers, discounts, special services, and all those other things that his staff comes up with to lift sales volume.”

Meanwhile Sandy also continued to ponder Jim’s question. For the kitty litter “scoop the poop” marketing campaign, they provided their customers’ retail stores with cardboard floor displays of an attractive blond hair female model holding a red kitty litter scooper. Sandy now worried and questioned to himself, “Should we have selected a less attractive and brunette model that more women might relate to? Should the color of the scooper been green representing ‘go’ and not the red one implying ‘stop’?”

Fourth thoughts about Jim’s CFO question

That night Jim lost sleep. He began to question if he was successfully fulfilling his CFO governance role to have fiduciary control of the corporate assets and effectively serve as a strategic advisor to the CEO and the board of directors. Jim worried. He wondered, “Should I be forcing Sandy to shift his mindset along with the sales vice president to view customers as investments in a portfolio? This shift would maximize the return on investment (ROI) from customers which in turn would optimize the rate of shareholder wealth creation.”

That same night Sandy also lost sleep. His marketing team was instructing their customers’ store outlets to position the kitty litter cardboard display with the attractive blond to be located near the retailer’s food aisle. Sandy worried. He thought to himself, “Maybe there would be relatively higher sales if the display was positioned near the retailer’s hardware goods aisle.”

A butterfly’s wings – marketing versus finance

It has been said that the random flap of a butterfly’s wings in Africa can impact the wind in the Sahara Desert that evolves into the hurricanes that causes devastation to the Eastern United States of America. Sandy thought to himself, “What little marketing tweak here might we do to stimulate a consumer’s purchase there?”

In contrast, Jim disturbed himself into a cold sweat conflicted with fear for keeping his position as CFO. He thought to himself, “Am I failing to defend the profit maximizing interests of our company’s shareholders and defending global Capitalism?”

The wide gap between marketing and finance

As I stated in the opening to this article, there is a wide gap and personality differences between the function of the CMO and CFO.

But maybe the gap is not that wide. Marketing thinks to act locally for global impacts to increase sales. Accounting thinks to take actions that lift the most profitable sales. Their common focus is what actions to take. Accounting should provide marketing the insights for decisions, and marketing should take actions.

Later that week Jim updated his resume and Sandy asked the product development team, “Can we possibly change the color of our kitty litter?”