How to Win Over Your CFO — and Send Your Budget Initiatives to the Top

You know what you need to accomplish next year, and you have the right ideas to make it happen. But how do you get your CFO to take notice, agree and approve your 2010 budget initiatives — when your request is one of hundreds fighting for resources?

CustomerProfit spoke with two much-admired CFOs from CCG’s client list — one from the retail world and one from financial services — to gain their insights.

The result? No-nonsense budget talk from Nancy Fulton, CFO of the cash-back rewards program Rainbow Rewards, and Perry Liff, Director – Financial Planning, for international retailer Talbots, Inc.

Focus on Business Cases and ROI Models

Both Fulton and Liff agree that for a marketing budget initiative to pass muster in these tough economic times, a concrete business case is essential.

Fulton says each proposal must have enough accompanying detail to clearly illustrate the short- and/or long-term value to the company. “A business case that comprehensively shows that the initiative will pay for itself, within a reasonable amount of time, will help move it up the priority list.”

Liff says a well-established ROI model is also critical. “At a minimum, we expect the project owner to be specific on the assumptions built into the model and be able to back up those assumptions with data.”

Present multiple scenarios, Liff advises. “I like to see a conservative scenario and a breakeven scenario. This gives us an idea of how much the assumptions can miss their mark and still not result in a loss.”

Demonstrate Alignment With Strategic Direction

Demonstrating how your initiative aligns with the company’s strategic direction is also critical, Liff says. “For instance, if strategic direction is to reach out to younger customers, then proposals must show how projects are tied to that goal.”

Fulton agrees. “There may be initiatives worth pursuing even if the ROI is not very good. I recommend discussing those types of initiatives with your finance people, so we can understand the full picture.”

Gain the Necessary Credibility

Fulton and Liff both believe in the value of communication early in the process to help alleviate the natural tension between marketing and finance.

“Open up the dialogue. Reach out to the finance department for help on your ROI statements. Demonstrate an understanding of the importance of financial models,” Fulton recommends.

Liff says Talbots is tackling this issue by expanding the role of finance team members. “Embedded” financial people are now tied to a specific department, such as marketing.

“This way, each embedded finance person can develop the understanding and expertise needed to help each department, and be available for modeling, analysis and forecasting assistance year-round,” Liff says.

Final Words of Wisdom

Fulton advises marketers to understand that there is a limited amount of money to go around and all departments want a part of it. “The CFO is not trying to be difficult. We have to be mindful of where money is best spent across the organization.”

Liff says it also helps to spend considerable time on results measurement. “It may seem obvious, but sometimes it gets lost in the mix. And projects that do what the marketer says they will do build credibility for your next request.”