Oh, that resolution to exercise more and eat a healthier diet. It sounds so right—but incredibly daunting. Can I keep it up? When it comes to our own fitness, plenty of folks help us with tools, plans, and the mindset to climb that mountain. But we need to select the right ones, at the right price—or an intended investment in our future could instead be a wasted expense we can’t afford. And it couldn’t hurt to have an accountability partner who keeps us honest.
Shouldn’t the same be true for your company? It turns out that the steps to improve your company’s health aren’t that much different than those you take to work on yourself. Here’s what I mean:
Though we can’t expect dieticians and personal trainers to fix what ails our business, we do have appropriate surrogates—marketing and finance. The relationship between these key cross-functions reflects the prospects of your ability to fine-tune your company’s appetite for efficient and healthy growth.
Recently, I worked with an organization that marketed to several client types. Each type would benefit from my client’s offering, but to different degrees, and in different ways. Those at one end of the spectrum could offset significant costs manifold with almost immediate impact. Those at the other end could advance their mission with relatively little financial impact. Target clients in the middle ground had the ability to offset costs, but it would take up to two years to feel the effect on the bottom line.
Upon further investigation, I discovered that the CFO had developed the pricing structure in isolation from marketing without insight into the vastly different value drivers for the array of client types. The result was one structure for all, a simple cost-plus-margin construct, with the margin necessarily driven by what the least value-driven clients would or could pay.
Once my colleague and I, as fractional co-CMOs, introduced value-based pricing, we were able to work with the CFO on a more effective model by client type designed to capture much more revenue overall.
I’ve been talking about the CMO/CFO relationship quite a bit with a fractional CFO, Brad Kayton. As we ran down a litany of areas where marketing and finance overlap—pricing strategy, staffing models, business planning, strategic budgeting, new offering launches, to name a few—we developed a 90-minute workshop called Profitable Growth Intervention. We are now offering the workshop free of charge to leadership teams to help them develop this critical partnership and leverage it to advance their firm’s priorities.
While we won’t rename it Diet and Exercise for a Healthy Business, I firmly believe this is inherent in a strong relationship between marketing and finance. And the CMO and CFO can be the accountability partners needed to keep the business on track for strong growth.
If you’d like to talk about these questions, please reach out to me at firstname.lastname@example.org.