Financial Marketing Is Accelerating
Will things return to normal in 2010? If our idea of normal includes the notion that marketers manage their discipline as a cost, then no, that's no longer normal. This kind of thinking has long been in decline, and the recession has hastened its obsolescence. Especially entering a positive economic cycle in 2010, CMOs must absolutely lead their corporations in generating profit and growth. Marketing is no longer a cost center; it's a profit-and-growth center.
If, however, our idea of normal includes the notion that finance becomes more of a critical co-discipline with marketing, then yes, that's normal and is, in fact, accelerating. If there's anything we should've had reinforced to us over the last two embarrassing years in business, it's the importance of high-integrity finances. Marketers now stand in even greater appreciation of their stalwart partners, the CFOs.
An Adapted Set of Concepts and Measurement Tools
When marketing was a cost center, these two corporate leaders, CMOs and CFOs, often stood in conflict. However, now that marketing is a profit and growth center, the CMO and CFO are fast becoming aligned.
As part of this alignment, an adapted set of concepts and measurement tools have emerged. These allow the CMO and CFO to speak the same language. Here are some examples:
|Traditional Financial Concepts ||Adapted Financial Marketing Concepts|
|Return on Invested Capital||Return on Invested Customers|
|Shareholder Return||Marketplace Return|
|Products in Service||Customers in Service|
|Unused Inventories||Un-sold Prospects|
What a great time for an economic recovery! The CMO and CFO are now able to work closely together, to manage their customers as assets.
There Are Cycles, and There Are Permanent Changes
Oftentimes, even inevitable changes will unfold slowly, during growth periods in the economy. The rising tide keeps even leaky boats afloat.
When there's a downturn, however, inevitable changes often accelerate. We saw this vividly during 2008-09, when a long-inferior U.S. auto industry finally fell into bankruptcy.
The increased synergy of marketing and finance, described above, is an inevitable change. We may have seen some marketing linger as cost centers as late as 2007, but, exiting the 2008-09 recession, CMOs can no longer manage their discipline as a cost. Similarly, exiting the recent recession, the CMO and CFO can no longer work in conflict. The concepts and measurement tools are now firmly in place for the CMO and CFO to work together as one, in driving corporate profit and growth.
We call this Financial Marketing, and it is accelerating heading into 2010.