Why CFOs Should Care About Predictive Marketing Analytics
Predictive marketing analytics isn’t a marketing solution. At least, predictive marketing analytics isn’t only a marketing solution. Finance executives are amongst those who’ll benefit most from adopting advanced predictive analytics.
Here’s why. The role of the CFO is changing from “cost authority to business value architect”, as Accenture neatly put it [i].
73% of finance leaders say they’ve been more engaged with strategy over the past two years; financial management is no longer the CFO’s sole domain:
“Finance 2020 – tomorrow’s digital finance organization – is a radical departure from the status quo. It deals in analytics and forward-looking decisions to create value and manage risk. […] It trades reporting the past for predicting the future.”
CFOs must add greater strategic value. They must become core decision-makers, responsible for driving organisational growth.
Right now though, three major barriers prevent CFOs from realising their full strategic potential:
- Twisted lines of communication between finance and marketing prevent the fruitful collaboration needed to drive business growth;
- Inability to resolve the customer-centric approach that’s so critical to growth with rigorous financial metrics;
- Data siloes reduce visibility across the business, stopping CFOs from developing a unified forward-looking narrative.
Predictive marketing analytics bypass these obstacles, allowing CFOs to step forwards into their more strategic, future-focussed role.
3 Ways Predictive Marketing Analytics Empower the CFO of Tomorrow
#1 – Align Finance and Marketing
The finance and marketing relationship has traditionally been a difficult one. As Forrester observe:
“Marketing and finance share the goal of increasing revenue but often have different perspectives and key performance indicators without a shared understanding of their relationship.
In many cases, marketing struggles to demonstrate its value to the finance team, which results in underfunded marketing departments that can’t produce the business results finance leaders are most focused on.”[ii]
Marketing and finance should be pulling in the same direction, but their different perspectives often obscure that bigger picture. Both departments end up resenting one another – marketing feels they’re not getting recognition for their achievements, while finance sees marketing as an endless cost centre.
This helps no one. What’s needed is a way to reconcile those different perspectives so the shared bigger picture is visible.
Both marketing and finance agree with the principle of collaboration, but in practice the picture looks very different. As Forrester research shows, 78% of respondents agree that marketing-finance alignment is vitally important, but only 15% felt that the two departments currently work together towards shared goals.
Why this discrepancy?
A staggering 38% of marketing and finance leaders rank either technology or metrics used to measure success as key challenges to better alignment. For both departments, an inability to measure the impact of marketing in wider financial terms is causing a rift.
That’s where predictive marketing analytics can step in.
Predictive platforms like BrightTarget create a centralised metric that brings marketing and finance onto the same page: customer lifetime value, CLV. This isn’t CLV in terms of loyalty or customer experience. It’s CLV in quantitative financial terms: predicted lifetime revenue.
From the marketing perspective, they can see which accounts are most worth targeting with acquisition or retention marketing campaigns. They can better focus their efforts, and in turn build a better business case for reinvestment.
From the CFO perspective, you can see exactly where your revenue is coming from, through a clear, centralised dashboard.
You get complete oversight of how marketing is performing towards tangible financial goals. And, most importantly, those insights are future-based. You get a more accurate forecast, which allows you to make better decisions about the wider business.
Aligning on CLV using the BrightTarget platform will enable better collaboration between marketing and finance, which will empower both sides to work together to drive growth.
#2 – Put customers at the centre
In today’s hyper-competitive, digitally transparent landscape, the customer has more power than ever before. If your customer experience lets you down, your customer not only leaves for a competitor – of which there’ll no doubt be many – but spreads the word too.
For example, the Forrester Global B2B Sell-Side Online Survey found that 74% of business consumers reported researching their purchases online [iii]. More than half prefer researching a new purchase online over talking to a sales rep.
Today’s customer is more empowered than ever – which makes the customer experience increasingly vital. Smart organisations understand that, and seek to prioritise metrics like customer loyalty, a key catalyst for long-term profitability.
The issue is that this customer-centric business model has traditionally been at odds with the legacy finance function. Finance focuses on quantitative financial metrics like cost, profit and revenue. There’s little space for metrics like customer loyalty within that model – which has held financial leaders back.
Customer lifetime value is the core tenet of the BrightTarget predictive marketing analytics solution.
The June 2017 Forrester Wave™: Predictive Marketing Analytics For B2B Marketers report [iv] named us a strong performer in the market based on this focus on customer lifetime value:
“BrightTarget predicts not only who will convert and when but also who will deliver the most lifetime value.
Incorporating unique information, such as invoice history, service records, and calculated cost to serve, BrightTarget helps business executives and marketers calculate their customer base’s current value. It then determines which steps to take with customers or prospects to maximize business equity”
This focus allows organisations to align to the customer while retaining rigorous, quantitative metrics that can be trusted.
Businesses can embrace a more customer-centric approach that’s driven by, not detached from, firm financial insight.
For financial leaders, BrightTarget’s platform reconciles the two imperatives of customer value management and financial rigour.
#3 – Overcome data siloes
CFO.com report more than 70% of surveyed finance executives rank their biggest 2017 goal as supporting business decision-making. Over 90% say they need to do more with financial and operational data to help make those decisions [v].
In other words, CFOs want to become more strategic and forward-looking but at the moment they’re limited by data siloes. CFOs must be able to see what’s happening across the business, or they can’t identify or execute change opportunities.
To escape data siloes, CFOs must have centralised oversight that transcends individual departments. This centralised data would form a unified narrative from which the CFO can draw insights to inform business strategy.
That’s where predictive marketing analytics enters the frame.
Advanced predictive platforms like BrightTarget give financial leaders that unified narrative. In BrightTarget’s case, we give you that narrative through a shared dashboard leveraging customer lifetime value.
This one simple interface shows you who and where your customers are, and which geographies, products and markets will prove most profitable.
This insight allows CFOs to better allocate resources, better forecast, and even identify new market possibilities.
Predictive marketing analytics empowers CFOS by bypassing data siloes, giving you the intelligence to make better strategic business decisions.
CFOs embrace the future of finance with predictive analytics
Data siloes, communication barriers and difficult-to-quantify customer value metrics have traditionally held CFOs back, but predictive analytics can dissolve those issues. Advanced predictive platforms empower the CFOs of today to step into tomorrow, offering strategic, future-focussed insight that drives growth.
Far from being a ‘marketing only’ solution, businesses that leverage advanced predictive platforms like BrightTarget position themselves for greater success.
To find out how predictive could help your organisation step into the future, consider the BrightTarget predictive marketing accelerator. This fixed-cost opportunity assessment is designed to prove the ROI potential of predictive in solid financial terms using your own data and business model, so you can start putting predictive into action.
[i] Accenture Strategy, Finance 2020: Death by Digital
[ii] Forrester, How Aligning Finance and Marketing Will Drive Business Success
[iii] Forrester, Global B2B Sell-Side Online Survey, in B2B Loyalty the B2C Way