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In the early 1990s, the Ford Motor Company initiated an extensive internal branding project. The project included formulating the brand promises for the corporate brand, automobile brands, and car models for each brand. A large three-day employee event was held in the Cobo Hall. As part of the event, each employee received a newly written marketing manual. The head of the branding project was the CFO.

When this author joined McDonald's as the global CMO, my greatest supporter was the CFO, Matt Paull. He understood how to manage your brand, how to run your business. Mr. Paull recognized that brand management is business management. From the CFO's perspective, the strength of the McDonald’s business has been built on the strength of the McDonald’s brand. Keeping the McDonald & # 39; s brand relevant to customers was critical to sustained profitable growth. Matt Paull was one of McDonald & # 39; s biggest brand boosters.

Although some finance departments have been implicated in the ugliness of financial engineering, many branded companies have benefited from CFOs who are brand champions. These CFOs understand the absolute need to invest resources in their brands. To do this, however, the finance departments must be fully integrated into brand management. Effective brand business management is not an academic exercise. It makes business sense.

The current CFO is defined

Some say CFOs view branding as a bottomless money pit where good money dies. Some people see the finance function as just keeping costs down. However, these ideas are outdated stereotypes. The CFO is the brand's financial conscience.

In an interview with the Wall Street Journal, a finance manager said, “We used to be the bean counters. Today we need to understand how the beans are grown, how they are harvested, how they are put on the market so that we can offer advice in addition to safety. Just knowing how many beans they have is no longer good enough for the company. "

Finance helps brands focus resources on the strategies and activities that really matter. In 2002, Matt Paull knew McDonald's needed to be more efficient in allocating resources, improving productivity, and investing in new restaurants. He also knew McDonald & # 39; s needed to invest in updating existing restaurants, improving the quality of innovation, and revitalizing McDonald & # 39; s brand communications.

There are different definitions of the word "finance". This makes sense in today's context of branding business: “Finance” means “managing an offer of money”. In other words, “finance” helps branded companies properly manage their limited cash supply.

We also often hear that the CFO only cares about the bottom line. And yes, being profitable starts with improving productivity and eliminating waste. The more efficient brands become, the more resources brand companies must devote to these critical branding activities. However, CFOs know that brands need to have high quality revenue growth in order to have profitable business bottom line growth.

As the financial corporate conscience of a branded company, CFOs and their finance departments have a responsibility to optimize the allocation of limited resources to those things that strengthen brand preference. With increasing brand preference, customers buy more often. As the brand preference increases, so does price sensitivity. Building a brand preference makes money.

The needs-based, event-oriented market segmentation is a fundamental marketing construct. Finance can help by answering questions like:

What is the financial opportunity for each brand?

Where are the spaces?

What are the priorities?

Marketing and Finance: A Critical Partnership

A marketing partnership with Finance helps brand companies allocate resources to the right geographic markets and the right brands in the right needs-based, event-driven market segments. The real challenge for the CFO is to focus on the things that really make a difference. Finance is the filter that we can use to set priorities.

A Deloitte study (the global professional services company) conducted in Q2 2018 of 172 CFOs showed that the CFO's role has expanded to include areas such as business planning, strategic planning, information technology, data management, procurement, risk management, compliance and other operational activities Functions.

Coronavirus has expanded the CFO's responsibilities. As one CFO has described, it has become essential to keep track of things. CFOs, he said, learn quickly. CFOs need to be able to adapt quickly to changing circumstances. With technologies like forecasting, capital management, and efficiency gains across all supply chains, finance is leading the way for businesses to become more data driven. According to a company's chief accounting officer and global controller, we are able to leverage data access and functional expertise to drive strategies and make business decisions.

In the future, the planning of the brand business and the financial processes must be integrated in such a way that the management and the brand management are inseparable thoughts. Sales, cash flow, profit margins and ROI for all stakeholders depend on strong, performing, preferred and growing brands.

Beth Kaplan, executive director of Deloitte & Touche LLP's Center for Controllership, said, "The value that controllers and other finance managers can bring to their organizations is based on providing proactive, predictive insight, rather than transactional, reactionary historical information."

Marketers are passionate about being voices of customers for brands. Finance is the voice of the fiscal conscience. CFOs and finance keep brands on the wings of our hopes from getting astray. Finance is the inner voice that guides and challenges when marketing strengthens brand preference. Often these two voices contradict each other. That is a healthy debate. Too often, passion can get in the way of the best strategies.

With the passionate conviction of brand leaders combined with the conscience of a strong financial discipline, brand companies will generate sustainable profitable growth in the future.

Contribution to Branding Strategy Insider by: Larry Light, CEO of Arcature

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