Key Takeaways
- Understanding Basic Financial Concepts:
- Profit & Loss (P&L): A P&L is essentially the story of a company’s financial performance over a year. It shows income, expenses, and whether the business made a profit or loss.Balance Sheet: A balance sheet is a snapshot of a company’s assets and liabilities at any given point. It reveals the company’s financial health by summarizing what it owns (assets) and what it owes (liabilities).Net Current Assets: This metric shows how much cash and liquid assets a company has after accounting for liabilities. It’s an essential indicator of financial health because it tells if a company can meet its short-term obligations.
- Importance of Communication:
- Finance professionals often use jargon, which can make communication with marketers challenging. It’s essential to ask questions and clarify terms you don’t understand, as finance people generally want to help rather than resist.Marketers and finance teams can work better together if they understand each other’s language. Encouraging open communication bridges gaps between departments and reduces tension during budgeting or resource discussions.
- Alignment Between Marketing and Finance:
- The most effective marketing-finance relationships occur when both teams are aligned. Finance teams want to hear how marketing impacts business goals (e.g., sales pipeline, lead generation). Marketers should back up their ideas with both creative and data-driven insights.Marketers who can demonstrate how their campaigns influence the bottom line are more successful in securing budgets and resources. Metrics like customer acquisition, lead conversion, and ROI help finance teams see the tangible benefits of marketing efforts.
- ROI and Risk Management:
- It’s not always easy to pin down the exact ROI of every marketing activity, particularly in brand-building efforts. However, finance teams appreciate ongoing updates on marketing performance, even during the execution of a campaign.Collaborate with finance on managing risk. For example, move from “trust me” requests to calculated risks by showing how marketing initiatives have succeeded in the past and will contribute to future growth.
- Budgeting and Financial Literacy:
- Creating a good marketing budget requires clear objectives and flexibility. Marketers should understand the business strategy (e.g., growth, profitability) and how their budget aligns with these goals.Finance teams don’t always expect an ROI percentage, but they do appreciate detailed plans and data-driven strategies.
Practical Tips and Tools
- Collaboration Tools: Use platforms like Slack, Trello, or Asana to ensure consistent communication between marketing and finance teams. Schedule regular meetings to review campaign progress.
- Finance Dashboards: Implement tools like Google Data Studio or HubSpot to track key metrics and show real-time impact on business outcomes.
- Regular Reporting: Update finance teams frequently on campaign performance. Weekly or monthly reporting builds trust and shows responsiveness to changing market conditions.
These takeaways emphasise the importance of clear communication, financial literacy, and alignment between marketing and finance teams for overall business success.
Transcript (captured by AI, might contain errors)
Speaker 1: Hello everyone, hope you’re doing good. It’s so lovely to see you here today. Thank you all so so much for taking the time. If you haven’t, just like Emily has right now setting the example, do let us know where you’re watching in from today. We’ve got Montserrat in Madrid, I’ve seen folks in Basel in Switzerland, we’ve got folks in London, Cambridge, Cambridgeshire twice, and London, Leeds, Hampshire, Hailing Isle, I’ve never heard of that Billy. So there we go, it’s a real pleasure. Thank you all so much for taking the time today. If you haven’t already, you will see in your chat feature that you’ve got the option right now that you head into the chat feature and you can see a thing that says two. If your toggle in that two says hosts and panellists, switch that over to everyone so everyone can see your messages today so we can get that conversation going on today. So I can see Georgie, Eric, you’re both presently on hosts and panellists only, so make sure to switch that to everyone and we’ll get going with the conversation. While you’re in that chat feature, it would be really lovely to get a gauge for today’s conversation on where your confidence level is with the finance element of the conversation that we’re going to have today. So if one is like, I want to run a race screaming, and like 10 is like, I don’t know, I’m the Chancellor of the Bank of England, where are you in between those two things? And it would be really lovely to know. I can see a couple twos, ones. So that’s where we’re starting and I’m a little bit like that too. So I think we’re gonna have a lot of fun. Today, our speakers are here. They’re fabulous. The first is Lee. Lee is a personal friend. He runs the company that the Marketing Meetup have our accounts with, which is called Green and Purple. He’s a former Deloitte director, a CFO of an energy company, and he’s a thoughtful, softly spoken man who’s an all-round legend. I know you’ll like him a lot. I really, really do. I consider him a friend already, which has happened very quickly. The second is Stuart Hurst. So Stuart is the founder of Cloud 10 Accounting and someone who sets the stool out to help folks genuinely grow their business through understanding their numbers. Stuart’s on a mission against dinosaur accountants, as well as being a TikTok star. So seriously, you need to see his dancing. So he’s quite impressive. Definitely better than I can do. And both Lee and Stuart are here to help us do something a bit different today. They’re gonna give us a view outside the marketing department. Now, this is important as we hear time and time again, but the way to get respect as marketers is to get others to understand us, but we need to understand them first. So today we will. We’ll be functioning purely as a Q&A today. So if you’ve got any questions in, head to the little toolbar down below and you’ll see a Q&A option. Pop your questions in there and we’ll get those answered as we go along. Before we get going, one last thing to do is thank our sponsors. So this week’s featured sponsor is Sticky Beak. Now, Sticky Beak is a company that is run by truly lovely human beings. Anna, their CEO, is delightful. Sam, their head of marketing, is incredible. And what Sticky Beak do is that they help you pre-test your campaigns. So they will gather real world consumer insights based on campaigns that you would like to test before you put them out into the world. So you get real feedback straight back from real people. It’s really fabulous. And for your first campaign, you can claim £100 off what would usually be a £259 test. So a really affordable way to get feedback on your tests before you put them out into the world. I also want to say a big thank you to Plannable, Frontify, Redgate, Cambridge Martin College and Exclaimer. We’ll speak to each of those in future weeks as we feature them as our sponsors. Well, that said, that’s more speaking than I usually like doing. Let’s get going with today’s session. So Lee, maybe we start with you, because I’m going to pick on you. What are the concepts you think marketers should be more aware of? Or potentially the concepts which you don’t see marketers be aware of, but you would like to?
Speaker 2: That is a great place to start. I’m going to slightly answer this by some of the chat that you’ve had on LinkedIn already. And I think lots of this is about communications. So really open communications and something we were talking about with Stuart before we started about finance people sometimes using lots of language that isn’t very accessible. And people assume they can’t somehow just challenge it or ask what is the real world meaning of that stuff? I use the word stuff because it quite often is just language and jargon. Stuart does this even better than I do, I think, in that cutting through it and just talking, what does it mean in the real world? Like, that’s what I would say is one of the key things is asking, what do those random acronyms mean? What are those random things mean that you finance people have decided to communicate in? Breaking through that is something I’d really encourage.
Speaker 1: Nice. I really love that. You know, and even that as a takeaway straight away, because I think there’s there’s often this fear of appearing stupid somehow. And I think there’s sometimes an almost adversarial relationship between finance and marketing, you know, where the marketer feels like they have to go cap in hand to the money people and go, you know, we want we want this or we want that. And then for the money people in return to go, you know, I don’t know, the P&L or the balance sheet or, you know, this line or this. And it looks confusing. And you want to have that conversation on an even keel, but I’m not sure you are. So I mean, like for you to sort of say, it’s actually all right. Yeah. And to question those things is is really, really useful. Stuart, how about yourself? I mean, like, what concepts and so feel free to introduce any marketing concepts here as well. Any finance concepts here? I need to get on my marketing head. What concepts do you wish marketers would know more about or character traits like Lee speaks to that in that interaction between us and them, so to speak?
Speaker 3: I think it’s important. There’s a few things to be perfect. And yeah, at least the nail on the head with the being OK to challenge the numbers, you know, like for those that were in agencies, what’s the most important number on your balance sheet? If you don’t know what that number is or where it is like, there’s there’s step one. I sit down with a lot of owners and say, what’s the difference between a P&L and a balance sheet? Do you know? I think 8% of people nod their head and say, yeah, yeah, no, I know that. And then I will happily say, tell me, then tell me what the difference is. And I think of that, 8 out of 10 people get it wrong. So so there’s the fear factor around, OK, some of the numbers is is real. And so I think a bit more. Yeah, that one is the honest conversations. Well, and it’s pretty true of a lot of business owners. For me, a key takeaway is is have an idea of of what the vision looks like. Like I tend to find when it comes to the marketers and agencies, I get sometimes fantastic vision boards around the look and feel of brands or projects, the vision around the numbers of what that will look like and whether that’s finances of turnover and costs and profit or even, you know, campaign results, followers, like anything numeric is almost always left or minimal or or not there. So we would love to see that that bringing together the finance and this creative vision so that the two are a bit more intertwined, if you like. And it’s a shame at the moment that for a lot of businesses like marketing and finance are almost like this instead of instead of being like this. So but when they do work together, like the difference it can make is is absolutely fundamental to is the rocket fuel in many ways that you get this balance right. And then, you know, it makes something what move from being a risk to a calculated risk as a big difference between those two things. And I think you can only do that sometimes if you’ve got some financial awareness or at least plan a roadmap of like, what does good look like in the financials? And if you don’t know what good looks like, then, you know, it’s I always say it’s like going to the airport and hoping for the best when you go on holiday, just turn up and hoping that you and your family all go to the same place and the place is nice. That’s that’s kind of what you need. Yeah, that’s really interesting,
Speaker 1: actually, to point out the distinction between a risk and a calculated risk, because, again, you know, maybe I have to be the voice in the room to a certain extent, but that idea of like, you know, just trust me, you know, just trust me to do it, you know, and the thing that I hear you sort of saying here, you know, it’s yeah, you don’t come across as an unreasonable person, but it’s useful to have those numbers that backup, you know, to sort of take it to a place which
Speaker 3: feels useful. Yeah, but and on that, just as a comment there on that chat about the willingness to cooperate, and yeah, and a disk profiling, if you’ve not done disk profiling your firm, I think that’s huge. And you will find that creatives generally hit the influencer box a lot, they’re big about feelings, they’re big about emotions, they’re big, they’re creative. So you saying you’ve got a good feeling, not to all accountants, but to 70% of accountants are in the compliance to see on a disk profiling, they want logic, they want detail, they want to think about things, going to someone in finance, or like, if you’ve got internal finance department and saying, I’ve got a good feeling about this, we’ll put shivers down their spine, I naturally put them on the defensive. So there are even the way that you communicate in terms of you might be a feeling, but we need to build that with, with what’s going to hit for that compliance kind of human being can make all the difference to getting a budget approved or not.
Speaker 1: I love that. Well, you know, personality types, you know, you’re putting the humanity into this, which I think is, is really important. Now, before we started today’s session, something we said to each other is let’s not assume knowledge. And so you said that 80% of business owners you sit down with come in, you ask the question between a balance sheet and a P&L potentially taking it into a marketing context. Can we speak to that? Because like, there’s some comments in the chat feature who are just like, you know, nobody’s ever taught us that. So in layman’s terms, could you sort of speak to that as easily as you could?
Speaker 3: Yeah, the difference between the two and the most important number. So, so effectively, a profit and loss is the story of the year is the company trading over the course of a 12 month period. And if your financial year can start at any point in time, but let’s say it starts in January and runs to December as a calendar year to make life simple. Everything’s at zero on the first of Jan and we, those numbers build up, sales grow, costs grow, and hopefully make a profit. And we get to the next year and everything is wiped out. Again, we’re back at zero. Like it’s just the story of the year. And now we, are we making a profit or a loss effectively? And that shows me in all our income and all our expenses, essentially the balance sheet is again, in layman’s terms, it’s a snapshot on any particular day of everything of value to the company, everything it owns, it’s got value. And that might be cold hard cash, which is obviously got the set value, people owe it money or things it buys, computer equipment, et cetera, less everything it owes to everybody ultimately. So, you know, your suppliers, the revenue, and then you get a value at the end. So in, in very basic terms, the balance sheet is a, is a first indicator of the value of a company. It’s often can sell for more than that with other bits and pieces, but that number and the direction that the balance sheet moves, that moves on a daily basis. And that, that is a, you know, that snapshot of that point in time. And the most important number in a balance sheet is, I would say a second would be cash. People say cash value, that second is your net current assets. And what that means is your current assets are things that can be turned into cash really quickly. So that’s cash normally, and your debtors, people that owe you, you owe your money. Normally you would say you would hope you would get paid of them pretty quick. So they’re your assets, less your liabilities, the people you need to pay quickly. So suppliers and HMRC are normally the main two. And net current assets means if you do, if you’ve got 10 grand in assets and five in liabilities, 10 take away five, it’s five, your net current assets are 5,000 pounds. And crucially in layman’s terms, net current assets means if everyone knocks on your door tomorrow and says, where’s my money? If that number is positive, life’s generally okay, because you can pay them off, collect your debt and pay them and life’s okay. If that number is negative, and a lot of times it is, that could be problematic because if people start wanting to pay him, you’re going to feel life is difficult on the cash front. And so it’s one little number in that balance sheet, net current assets or net current liability if it’s negative. And tracking that on a monthly basis I think is really important. And year on year, because it might be positive, but if it’s getting nibbled away at, it could indicate that cash is getting tighter and tighter and tighter. So that for me is always the most important number in a balance sheet.
Speaker 1: Love that. And I think that’s useful as context on the business front, but also the marketing front, because presumably a lot of business owners, and you said not all business owners, will be aware of this kind of thing. And it may be that as marketers, we can also infer the general sense of where things are in the business. So when we go and asking about the marketing budget, we can take a look at stuff like that, understand where we are and go, okay, these are how we need to adjust plans. Lee, I want to take it to you here, because I think we’ve spoken a little bit about some great traits already. But I’m curious what the best marketers you’ve worked with have done, because we’ve got some really, really interesting stuff going on in the chat right now where folks are sharing their experiences and stuff like that. And judging by the tone, it’s quite often negative. So let’s sort of turn this into a positive sense. What are the best sort of characters doing in your opinion or your experience?
Speaker 2: I’d love any stories. Yeah. So what I was thinking about as you were asking me that question was about being aligned. So finance being aligned with a marketing team or the marketing individuals or whatever. And what I mean by that is, you might not always feel like it because finance might resist or challenge, but they do want to tell a story. And I think this is where the combination is actually brilliant, or done well, it’s brilliant in terms of being able to enrich both parts of a conversation. So it’s really interesting what Stuart was saying about having a feeling about something, but then being able to back up the feeling with data or with past experience adds to a richness of story that allows both people to present what they are trying to achieve. And if you’re working in the same business, and I think about it, I think Stuart and I both think about it in terms of how we work with our clients, we’re trying to achieve an aligned, like the same goal. And so having a really like aligned conversation about what we’re trying to achieve, how can we take the information that we’ve both got and present this as something that allows us to present a wider picture that’s more than just a feeling and it’s more than just a set of numbers. I was listening to, because it feels like we all did a bit of similar prep of listening to each other on podcasts and things yesterday. I was listening to you and James when you went to see Canberra. And I love the fact that James said his favourite part of meetings is when he gets to see the graph. It’s a reminder that we don’t all understand or interpret information in the same way. And we need a collection of different sort of data sources in order to capture everybody’s different minds and the way that they want to have those things presented. And that’s how I’ve seen it done brilliantly before. Probably the best marketer I’ve worked with was a lady at Deloitte, who just managed to encourage people to do things in a way that they didn’t realise they wanted to and do it in a way that allowed her to present the information that she wanted. And it was all just, it was, it was, she did a brilliant job at it. Brilliant, brilliant job.
Speaker 1: Nice. I love it. Thank you. And you know, that alignment, I mean, we spoke about this before we went live. And when you mentioned the word storytelling, I just lit up, because it is interesting that it’s one of these, again, from the marketer’s perspective, you know, it feels like one of these concepts that we speak about all the time. And to be honest, you know, if I could be incorrect, I thought we kind of owned, to a certain extent, you know, this idea of the storytelling. But the fact that both of you sort of spoke to that before we went live, and you have done just now as well, Lee, I hope opens a few minds, because it has mine to the sense that like, there are these collective mechanisms that we can use that feel like they’re owned by marketing, but actually, you know, you’re people, and you like your stories, and it all makes sense. And I think this also starts to lead into this idea of ROI conversations, and stuff like that, because if there’s a story behind it, presumably, we can, you know, start to justify these things. And so, Stuart, I actually want to take it to you specifically on that ROI conversation, because a big part of marketing is about brand, and brand can be tricky to sort of put a number next to. So, what if I can’t prove ROI financially? What’s your view on it? Should anything not be measured? You know, or is there sort of some leeway that folks can give themselves here?
Speaker 3: I think, yeah, there’s not one true source of truth. Like you say, it is, I think someone put in the chat about the classic, you know, half of marketing works, and half doesn’t. I don’t know which half, that whole set up. So, I don’t think there always needs to be a clear, nailed on ROI, particularly like financially on a number. And I think sometimes, people can set themselves up for a fall by doing that in terms of being too nailed on a, this will return a number in a set period. And I think the other thing to think about sometimes is how campaigns or brands or whatever weave into one another, and how they complement each other amongst different strategies. So, I think it can be a bit naive sometimes to label one activity and nail a definitive ROI. But there’s got to be some kind of vision of longer term goal of what is, what this is going to do. And ultimately, it will increase, I guess, the long term goal is to increase revenue in one guise or another. But that could be three months, could be six months, could be two years down the line, like there’s a long game to play. And I think, just think about what metrics, what’s driving the ROI, what beyond the finances is driving those. And, you know, I’ve seen, you know, there’s classic things like followers, you know, those kinds of things, likes reach that it’s got out to, if things go viral, there are campaigns we can look at like that. I really respect markets when I’ve worked with them, that can work on a project. For me, they gain faith, it’s not the ROI when they start, it’s not the soul and dream at the start, it’s when a project is in, in the, in the, it’s on moving, if you like, it’s in gear, it’s going, it’s the ROI and the updates of the numbers around what is happening while it’s going on. So, if there’s a three month project, I don’t want to hear at the start, it did this number at the end, it did this number. I want to know every week, what’s happening and what’s changing and how that is evolving. And if strategy sometimes is changing because of something that we’re looking at. So, like a classic one I worked with was an Instagram campaign that was, that was big and the algorithm changed partway through to second connections being less important, first connections being pushed out and it fundamentally changed the way that content was being delivered and the numbers that were being hit suddenly dropped off a cliff because that was being monitored, those, that, that reach and what was being said and thumbnails that were being used, it was identified very quickly, like how that algorithm had changed and the campaign moved and changed. It would have been very easy just to keep pumping out the same stuff on this, on this campaign and not, not change it. So, for me, the ROI is, is what you can tell me while the campaign is going on on is this working or not, or what’s moving and shaking. So, I love the fail, fast, fail, often mentality of we try different things even midway through. And I get, I love it when I’ve had, I’ve had marketing campaigns with 10 different thumbnails, tried this version, this version, this version, and then you start to see some stats on engagements and things that are happening and, and then, yeah, you know, that’s not going to give me a pure ROI, but it’s going to give me something to, to see is the needle going in the right direction. So, it was a long answer, I guess, but ROI is about, on an ongoing basis, it’s a misconception that I need to give a budget to someone and then sign it off and they, and if you think finance forget about it for three months, like they absolutely don’t.
Speaker 1: They’re just not on. I love that. No, but, you know, and, and so I guess to get into the weeds in that, you know, was there a specific mechanism that you found most useful to communicate those changes? I mean, like, did you, this is like super tactical, but did you have weekly meetings? Was it
Speaker 3: weekly email? Was it a report? Yeah. So, so we, for those that have read, I would absolutely recommend for anybody in, in business or in a department running a department to read Traction by Gina Wickman. It’s my absolute Bible for all things business. So Traction as it’s a weekly meeting with a scorecard and the owners of the business and heads of departments will do it. I would say if you went on a desert Island tomorrow and you had one piece of paper and add some numbers on to define what your business doing well or not, you could write them on one piece of paper. So some will be financial like cash in the bank sales, but others will be, you know, a number of happy customers, number of Google reviews, perhaps number of client complaints, like, you know, a number of LinkedIn views, whatever it may be, you would have the metrics and you would have a top level one at owner’s level, but then each like head of marketing and team would have their own set of scorecards of five to 10 numbers of what’s, what they’re responsible for and what’s driving them. And every week we would meet on a, on a Friday afternoon, meet for them, run that. So you’d have sub team meetings. And then the department heads would meet at the end of the day for summarizing the top numbers. And it’s when I started now, I use software, but it was an Excel spreadsheet, good old accounts, Excel spreadsheet. And you’d have all your scores at the one side, your drivers, and then you’d have your target. And then you’d have your weekly target. And it was green if you’d hit it or above red, if you hadn’t. And if you hadn’t, it was right. Well, what do we do week after that? What do I book in the diary now for, for next week to fix that problem? And, and that for me really brings to get all departments, whether that’s marketing operations, finances, there’s a real focus on what’s driving our business. And when you start, you’ll have five, 10 drivers, a guarantee in six months time, they will all be the same. You’ll have learned and developed and evolved and gone. That’s not really pushing the needle. Hang on. There’s something else here that’s, that we need to be tracking. And it’s in a geeky numbers way. It’s fascinating to, to watch that change. And it also brings ownership to the numbers of not just finances, but you want to give people responsibility. Every person, your organization responsibility for at least one number. And I like the idea of manually punching it in on a spreadsheet or typing on software. So there’s don’t let the machine just spit out a number because I’m not going to look at it. I’m not going to take responsibility. So, so getting everyone responsible for a number and report on that can help bring the sense of everyone understanding what’s working and what isn’t, even if they’re not directly related to that, to that department. That’s
Speaker 1: really fabulous, mate. That’s such good advice. Thank you. We’ve got Charlie, Charlie in the chat saying, thank you with a big exclamation mark and, and my good mate, James saying this is such a nice idea. So, so that’s really fabulous. Good advice and, and really, really useful. Folks, I can see that there’s 11 open questions right now in the Q and A. The thing that I could do to ask you a favor is if you see any questions that you particularly like, give it a thumbs up and we’ll get to those very shortly. I just want to ask a couple more of the sort of like the broad general questions that we tend to get, and then we’ll head into the community Q and A. So thank you already for giving a thumbs up to a case of this question at the top here. Let’s, let’s head into the budgeting stuff, Lee, if, if we could. And so I think, well, I’ve written this down as a question to start off with, but take it where you would like to, because I’m not sure that it’s a particularly great question, to be honest. But the question is, what makes a good marketing budget? Are there any rules of thumb that you can be applying to budgeting to, you know, to make an effective, good marketing budget? I’m going to take it as a what makes a good budget, because I think, you know,
Speaker 2: what makes a good budget, because I think any element is, is part of just a wider budget. So I’m going to come back to alignment or objective, because a bit like Stuart’s explanation of what profit and loss is, the, that is the outcome for the year, that’s the story for the year. What do you want the story to be? What’s the setting of the objective? So that’s what I think that you start a budget with, is what do we want to achieve? And then it’s about, for finance people, it’s about setting a detailed plan. And again, I like the fact that we talked a bit about flexibility already. So we set a plan, but then we have some flexibility in it to understand, if something happens, what will we do? How do we change? How do we adapt it? Budgets have this weird aura of being a fixed thing forever. And yet most good finance people will understand that there’s the ability to move them and change them based on what’s happened over a period of time. And then I think it’s understanding what the outcomes are from setting that budget. So specifically for marketing, it’s like what, you’ve set that big goal, but what’s the pieces that align with it? What you, Stuart’s talked lots about the metrics that you might be tracking, and how do those metrics align with that goal? And how are we then drawing lines? And I know it’s, I’m alluding to ROI calculations here. But I think they’re super hard to do. And I apologize for all accountants, if we’ve told you, you have to have one, because they are so hard to do for lots of general answers to this. But what we can do is look to what are we trying to achieve? And how does that support the longer term objective? That longer term objective probably has a profit and loss and balance sheet outcome from it. So if we’re setting a bunch of campaigns that will deliver these things that support that longer term objective, it has had ROI, it’s just a really hard bit of maths. But I think I would hope most good finance people can understand that correlation can show and like line up historic examples of budgets and things that have happened and say, I can see how those things are being replicated again. So there’s a layering there of set the longer term vision, set what you hope those things are that go towards it, have some detail and then have some backup plans. And that’s quite a really good budget process, should take a really long time. Unfortunately, but fortunately, it’s your planning for a long period of time, you want to take the effort to think about what does it look like? And it’s not just 12 columns, a list of numbers. I think done well, it is quite a hard task.
Speaker 1: Yeah, well, you know, it’s interesting. So Janice has put in the chat about, it’s important to have this understanding of the business strategy and what’s more important, you know, growth or profitability and that kind of stuff. And it’s, I think hopefully, that’s what this whole season is about, you know, sort of looking out and sort of going, you know, it’s not just marketing, you know, it’s marketing in context, which is as part of a wider business. And so the fact that you took the question of what makes a good marketing budget into a place of what makes a good budget, you know, that’s really helpful, even as a mindset. And I just, I’m not sure I do that enough as a business owner. You could probably tell me better than I could, Lee. But, you know, I think it’s easy to get siloed into these spaces. But actually, to sort of broaden it out like that is dead, dead useful. Stuart, do you have anything to add to that beyond what Lee has said? Otherwise, we can take it.
Speaker 3: Yeah, I think I summarized it by having just it links to that vision and bringing the numbers to life, like I say, with the with the grand plan.
Speaker 1: Nice. I love that. Cool. Sounds good. Well, let’s let’s head into the community Q&A then. And the first one comes from Kasem, who asks, and I’m probably gonna head back to you, Lee, for this one. What typical metrics would CFOs expect to see from marketing? And what do they value? And I feel like we’ve got an it depends coming up. But if we are going to put that to you and stop answering for for you putting words in your mouth.
Speaker 2: Well, it’s almost like you’ve heard me answer that sort of thing before I’ve said, the right answer is there isn’t a standard answer, which I know is really unhelpful. But what I mean is, it should be really business specific, it should be industry specific. So the answer can’t be the same answer every time. So, but this is, again, when it comes to like, making sure that the finance team understand what will give them more richness to their numbers. So if if it’s something around, I don’t know, a conversion metric that actually drives sales pipeline, they will care about that. They don’t realize they will, but they care about that. So KPIs that then can give a richness to the financials. Those are the ones to be tracking, that’s what I would want a good CFO to really care about.
Speaker 1: Nice. And I really appreciate that answer. And I guess, maybe as a follow up, and we’ll get the next question to you, Stuart, but just as a follow up to this, Lee, have you have you experienced any really great conversations where someone’s walked in to the room and they’ve gone, look, I just want to understand your world and the things that you value? And if so, how has that conversation gone? Because if it’s the it depends, it’s industry, it’s etc, etc, then presumably, there’s a there’s a conversation that happens somewhere along the
Speaker 2: way. Yeah, I’d say it probably doesn’t happen as often as it should. It can. So really good. It’s a really good question, Joe, because now I’m thinking through different meetings with people and probably trying to think of meetings that we’ve had. I can’t, I can’t, I can’t, I can’t quickly think of a great example. I’m really sorry, or give me a pause. And I’ll come back to you.
Speaker 1: I think that might be illuminating in itself, you know, and, you know, look at that for an example, if what we’ve said so far is a great marketing, finance, alignment, storytelling, you know, clear objectives set in the in the budget, you know, which sort of delivers an outcome, which everyone’s agreed to. And then we can’t point to an example in your rich experience in various businesses, both consulting and in house to sort of ask that question and sort of have someone say, Oh, I’m not sure actually, of how that conversation went. Yeah, that in itself is like, bloody useful. And maybe, you know, there’s there’s people on this call right now, which is like, you know, as we’ve established, there might be that relationship to start with, you know, maybe this is an encouragement to be the change you want to see type of thing, you know, not to overstate it, but it’s, that’s just really interesting to me.
Speaker 2: And I had a tiny bit to it, which is, despite anybody’s experience, finance, people don’t want to resist thing. I felt like I timed that really poorly. And maybe Stuart was going to spit his water out at the same time. But I genuinely, none of us are there trying to resist or challenge things that is unfortunately, an awful lot of process and task work quite often involves accountant’s lives, day to day lives. But I genuinely believe we don’t want to be those horrible people that refuse things. And actively, we should be trying to be aligned. And good conversations will allow us to do that. So I think probably the examples I can think of are where it’s initially been a challenge conversation, that’s then come out to be a good positive, like, well, how can we get around this? What can we do? So, yeah, that’s probably actually the examples I’m thinking of where I’ve had to say, we haven’t got enough money to do this. But we might have enough money to do that. And working out what to how far does that get people? And what can we achieve on a lesser budget or something? It’s interesting, because I’ve,
Speaker 3: there have been times when I’ve said to people, that budget isn’t enough for what you want to do, like, you need to make a number bigger. Like, it’s really interesting, I guess, on people’s takes, but I’ve been in rooms, whether that’s with business owners outside or as a virtual CFO gone, there’s more money, there’s more for this, like for this campaign, and where this wants to go, like, that’s not enough. Like, so it isn’t if I think it’s communicated well enough, and it’s a true collaboration, it’s not finance’s role isn’t to drag the spending down, it’s to make the spending right for the reward. Like, and that’s a different concept to go into the room going, I’m not getting in a fight with this person on trying to make as much I’m, I want to, I want something that works for both parties. So it’s not always a, we’re going to drag the number down. And it’s just that sense of understanding, I think, on the CFO general direction of the of the things that we look at, it depends on the direction of travel from the CFO and the MD of is it a rocket to the moon growth? Is it about profitability? Is it about brand awareness that depending on what direction of travel, and as a marketer, I think you can really challenge CFOs and MDs for what’s the vision for this company? What’s the direction? What where do we want to go? And if you don’t know that, then that’s, that’s your right to really kind of push that back on
Speaker 1: them to give people those kind of understanding. I love that, Stuart. And there’s been a couple of stories that have actually come into the chat right now. And it links. So there’s the three threads I want to hold together here. There’s the chat, there’s your your thoughts about dinosaur accounting, and then the question that comes from Holly. So we’ve got a chat comment that comes here from Susie, he says in my first job, I went to the finance officer and asked for a new biro because mine was out of ink. He laughed in my face and said, you’ll be lucky. There is a there’s a second story, which I won’t read out now, but does deserve a lot of acknowledgement from Jess. The second thread is your thing about dinosaur accountants, however, you know, and everything that you rebel against in here. And then the third is Holly’s question. So Holly’s question in the Q&A is, what do you think of finance teams biggest barriers are to marketing, whether that’s internal team activities or bringing on board freelance consultant for strategy pieces, etc. What would make you veto a chunk of work and also what would make you really buy into their services and activities. And the reason I want to loop together those three things is that I think we’ve got two examples of where people have probably gone in with quite positive attitudes, I would hope. And then, you know, been met with a quote unquote dinosaur accountant, and sort of been pushed back in a way which felt maybe unreasonable. So how can we how can we give the folks watching in today, the sort of the ammunition to sort of, yeah, come in.
Speaker 3: Right. I say language and communication is everything. Normally, if that happens, like it will often be on that, that this profile and if that type of human being that one person will be more on the rationale, the detail, and the other person is a big picture thinker that’s running on emotion. And that’s not always the market in one corner and the other. Statistically, 70% of accountants sit in this compliance, logical detail, wanting to understand and take time, then that’s not all. I mean, I’m not for one, you can probably tell we’re raving around. But, but that’s, that’s the stereotypical. And I think the first thing to understand is just that, particularly when there’s if there’s a big spend or a budget, that those kinds of decisions naturally, any, any large spend shouldn’t be a jerk knee jerk off the cuff. Yeah, let’s spend it. Yeah, let’s do it. Let’s get excited in this pitch and do it. That as a rule, someone should go away and take some time to think about it and plan with it and, and, and come back and debate and discuss it. So I think sometimes when, when you get that disappointment of this positivity and negative, it’s because it’s probably a communication in the way that things have been communicated and a lack of diving a bit deeper, giving a bit more what if scenario. So what if it does go massively wrong or what does people talk about? What good looks like or hopefully what does bad look like? Like what’s, what’s the worst version of this? If it crashes and burns and, you know, we talked about budgets. Well, I often do, you know, a rocket to the moon, a worst case in a middle line, and we track and we kind of quickly work out which one of these three we are, we are on with, and that then affects our decisions after that then, because we know, okay, well, we’re on this great trajectory or we’re not. So I think there’s a little bit of more scenario planning that could go into things and the worst case and, and what doesn’t work will be good. And give people time to, to think about it. I would, I mean, I best, some of the best I’ve worked with have come with a pitch and I’ve already booked in meeting two and meeting three for, for the next phase and give people set timelines for, okay, like we’ll catch up in a week, have a read through this document, you know, and as much information as possible, even pre-reading before, before we go into that pitch, if you like, that shows understanding. And I think it’s great if you’ve got access to the company’s finances, I’m a big believer that everyone should be able to see how profitable or not a company are. And because it’s not fair on you, if you want to spend a hundred thousand pounds and there’s two quid in the bank, and there’s no sign of it getting any bigger than everyone’s wasting their time with that kind of work. So again, a push for certainly a director and management level and heads of is, is pushed for that. Well, what do the finances look like? What have I got? What’s the direction? What’s the general thing? Otherwise you can be doing before you start, you’re talking completely different languages and, and you, I would never set up a hundred grand budget if I had, if there was 10 grand in the bank, like it’s just, it’s not feasible and doable. So, and I think the best that do it, like I say, just pitch, they do pitch their best case, worst case. And there’s a clear content plan, strategy plan for week one, week two, month one, month two, month three. That’s, that’s got enough detail in it to know that it might not be successful and hit all the numbers, but we’ll give it our damn best shot. And it’s not going to be let’s flip a coin and hope for the best, which can sometimes, it feels like it sometimes on a, on a one pitch and there’s no
Speaker 1: substance to it. For sure. Well, you know, I’m guilty of that for sure. And you know, it’s interesting because, so there’s been such a fascinating conversation going in on the chat about typical gender roles. And I think implied in that there’s a lot of, as someone said in the chat, you know, it’s a, it’s a wider conversation, so I’m not going to take us too far there, but there’s a power dynamic. And I think what you’ve hopefully spoken to there, Stuart, is, you know, by showing the plan and showing the idea, then hopefully we’re starting that journey at least to having a productive conversation. And as I say, I’m guilty of the, let’s do this thing because I’m excited about it, you know, and I think I probably quite often have the, but as a founder, I’ve kind of got like that prerogative, but in, and then, and then James says, no, Jay, that’s actually the opposite way to, to these things as they work. But yeah, you know, it’s, it’s easy to get excited, but I appreciate that thoughtfulness and then the point about the personality types as well. Even in your own marketing team, it’s really
Speaker 3: interesting to get a blend of profiles and people that are the more optimistic, more pessimistic, and, and even pre-running it through your team in detail of like, that’s the version one, if you like, to get the challenges to, you know, we are the same in accounting groups, there might be more compliance by default, but you need someone that’s more direct, you need someone that’s an influencer and, and even, even getting your own team to buy it before moving to the next department in itself is, is a, is a really good step for.
Speaker 1: That’s a really, really great point. And as Paul says, you know, we need to be careful not to generalize teams, you know, I think exactly to your points, Stuart, there are so many different personality types, you know, we’re speaking to two, as a, as Trevor said in the chat here, we’re speaking to two great communicators. And so, you know, that’s, that’s fabulous, you know, and in the same as the marketing world, there’ll be variations, you know, so this is, this is really fabulous. So thank you. And I’m going to take this next one to Stuart, because you alluded to it, and then we’ll go to you afterwards, Lee. The next question comes from Sam, who says clearly senior leaders need to understand the numbers, but how transparent should you be across the organization? Should everyone in the marketing team understand the financial performance slash budgeting regardless of your level, in your opinion, or is it like, you know, senior management should know X and middle management know Y, etc? I’d encourage everyone. I mean, I’m a believer in
Speaker 3: every single person in the firm, at least knowing, they might not know what’s in everyone’s salary, don’t get me wrong, but the detail around the company’s profit, the level of activity, the sales volumes by like service type or product code, and the key costs and overheads for in that business. I mean, in the last three business I’ve worked in, I’ve shared every, all that numbers with all, with a hundred staff at one point of this is our performance. And then I, each group gets more detail on their numbers. So each pod will know, they all know their own salaries. They all know what they’re contributing to. And we try and get an understanding of margin or some kind of contribution or some kind of running costs for that department. And then, then you can have proper adult conversations in my mind of, right, well, do you take this pay rise? Do we take this workload on, or is it better to hire someone else? And what this will mean X to your pay rises, but, you know, put a balance in, in workload and longer term growth. So for me, financial transparency is a big, big plus. And the more people that know, have an idea of things, the absolute better. So we do like company updates, even at my old firm, when I can add the last one over 50 people, every quarter full on financial updates, full on strategic updates with a breakdown of, of what was good, but what was bad. And it can be difficult sometimes don’t get me wrong, but if you’re working somewhere where cash is tight, you don’t want to create unnecessary panic. But again, I think if it’s done with a strong leadership and a vision and a plan and what that will look like for, for moving that forward, you can get this almost siege mentality from people wanting to work harder and do more and be more understanding than, than living in fear.
Speaker 1: So, yeah, that’d be my take on it. Love it. That’s so useful. And I think it actually leads into the next question for you, Lee, because presumably by having more of those conversations, you end up in a place where people are more financially literate as well, you know, because they’re understanding where the numbers are. So there’s a question here from Laura who says, I am non-financial. So how can I talk with confidence and authority when pitching for my marketing budget next year? And maybe Lee, I don’t know whether there’s any, this is a real question because I genuinely not a clue. You know, we have the equivalent, like the Mark Ritz and mini MBA where people can learn how to do marketing really well and stuff like that. Are there any resources that you can recommend for folks to sort of get a grounding in, in, you know, finance and accounting stuff that might be quite accessible for non-marketers? I’m going to start with
Speaker 2: something slightly funny. So I’ve done my exams, my professional exams, and I’d love to say that that’s the right place to start is by some sort of professional institute, but it’s not. So don’t go there. And I was the president for my society for a long while, but I still wouldn’t recommend it. That’s an interesting, I don’t think I’ve got a great, what I might do is share a link to, there’s a, what’s called a financial ops, like a Slack channel that’s available. And they’ve got a really interesting bunch of various, it is for finance people, but what I find is they use much better language to talk about these sorts of topics. So I think I’d share that with you, just be able to distribute it in some way. Yeah, it’s how to better present the budget without having a strong financial understanding is all of the things we’ve talked about in terms of understanding what you want it to achieve and converting what your feelings are into these outputs and metrics that won’t be an ROI percentage or a number or anything, but that when presented to somebody in finance who can help convert those into what the objectives are, we’ll be able to help you find a way to make that budget more palatable. I mean, that’s really poor language because palatable there doesn’t imply that it’s good. Whereas what it is, is these things, it’s interesting in the chat, lots of talk about marketing views as a cost center. And I find that interesting because it’s, it finances the worst cost center, you know, it genuinely doesn’t do anything to, or it’s harder, it’s great to convert its value. Whereas marketing being so closely aligned with the growth and ambition of a business that it, to me, it should have greater standing. And it somehow, by virtue of the finance people holding, somehow hold themselves out to be in some way more special. And it’s not at all, and it really shouldn’t be seen to be. And it pulls me back to my original comment about it’s to everybody’s success there to convert those ambitions into the business’s success. And that should be a success for finance as well. Like a good marketing budget should be a finance
Speaker 1: success. Yeah. That’s just so interesting. You know, so I think it’s definitely a trope within the marketing community, you know, sort of referring to ourselves as, you know, fighting against this idea of being a cost center, as you’ve seen in the chat. You know, for you to say that, as we’ve got Laura here saying, wow, that’s so interesting. I’ve never considered that finance doesn’t have to justify itself yet marketing has to explain every last penny. So Laura’s mind is blown, but, you know, we’ve got this self-talk around, you know, marketing being a cost center and having to justify, improve and et cetera. And, you know, as we come towards the end of this session, I just hope that the thing that people are taking away from this is very much in the spirit of everything you’ve been speaking to Lee and also you Stuart is this, you know, a little bit of the shoulders relaxing, you know, and a little bit of a conversation and, and, and, you know, a story and we use the word justification, but justification isn’t it, you know, sort of like, we’d like to do this. What do you think? And a collaboration, you know,
Speaker 3: stuff like that. I think the best ones connect the dots. It’s not just finance and marketing, like the link to sales, like it’s not always about increasing number of leads or this brand awareness or number of followers. It’s like, well, what’s the quality of conversions? What’s the quality of leads that come through? If they’ve been more successful sales as a result, the sales been bigger as a result and the best marketers tend to connect operations, finance and sales and, and, and weave that story together. And if you can nail that, like life’s good.
Speaker 2: It’s interesting. We’ve got 50 minutes in and we haven’t talked about quality or cadence or speed. And actually both of those are really interesting things to track as well as just an ROI number that might, if it takes, I want, I used to work with a guy and he eventually won a client. He’d been trying to win for 20 years. My view was that was a pretty poor use of time. But so I think I have an understanding of all of those elements makes it an awful lot better to understand whether or not something’s good value for money, whether or not
Speaker 1: it is a cost. Yeah. But it’s all part of the conversation, right? You know, and at the end, it may be after 20 years, you turn around and go, this is now the foundation for the business or whatever it may be, you know, and that’s, but that’s the story element, right? You know, if the story is there that, you know, that 20 years is worth it and 20 years is worth it type of thing. We’ve got a technical question coming from Jenny on zero-based budgeting. And so this is something that we’ve been encouraged in the marketing community to at least look at by Mark Ritson, a big influence in the marketing space. But Jenny asked the question, what are your thoughts on zero-based budgeting, which Mark Ritson is very keen on? I haven’t yet found anyone in finance who is happy to use this approach. I don’t know, I’m going to throw that out to both of you because I don’t even know whether that’s like a really common sort of methodology in budgeting widely or how that’s sort of seen in your space. So Stuart, maybe first, but
Speaker 3: only because Lee spoke last and if you don’t mind. Yeah, I think it’s not a lot of common thing in terms of the approach to things, the way to tackle it and the way to look at it. I think it’s still about new concept, but it’s a different concept. And again, it’s not something as a rule that on your finance training and working that is first thing around budgeting and working, it’s working to numbers and working that. And I think that in itself can make it a difficult thing to get by. But I absolutely think in the right place, it’s got legs for sure. And it’s something different and it’s a newer approach. So absolutely. Nice. So, you know, I mean,
Speaker 1: the thing that I’m hearing there is it’s the methodology at all, like anything else, apply it in the right places, but not in others. And Lee, to go back to your four steps earlier, you know, that feels just as valuable, you know, sort of start off with the objective and then move downwards. That feels particularly useful to be putting together a decent budget. So thank you. Let’s we’ve got three minutes left and plenty of questions. I’m trying to just make sure that we haven’t covered off things that are now sort of gravitating towards the top of the Q&A. So let’s take one from James and head to you, Stuart. And it is it came in quite early as a question, but is how important is it for marketers to be able to read and understand the balance sheet? Should there be an understanding of the key financial KPIs that can be married to your
Speaker 3: budget slash investment bids? I think it’s important to have a basic understanding of finances, I think helps like I don’t. Is it critical? Maybe not. But I think if you’re working with others and you’re not in founder role, I think, yeah, absolutely. Absolutely helps you. You’re communicating between the two of you. And it helps set that bar of like where where where to start. Almost like I said before, there’s no point 100 grand budget if there’s nothing in the coffers. And I think you can put a better argument together as well. If you can see that there is a story of a balance sheet that I could look at a balance sheet year on year, month on month. And without knowing almost nothing about that company, I could tell you a story of that company, of whether it’s had tough times, where high growth, you know, whether I could even tell if it’s been staff turnover from certain numbers and things in there so that the numbers do tell a story. So I think being aware of that and being able to contribute that can only help you, your communication and your pitch, so to speak. So, yeah. Nice. I love it. Thank you.
Speaker 1: You know, I’m like, I’m just going through the questions here. But I think there’s a. There’s just this overriding theme, right, as we keep coming through the questions, and I think it’s a really positive thing to have explored what we have today. But, you know, I can see even in the chat, as we get 58, 59 minutes in today, that, like, there’s still some things that people are holding on to as stereotypes, you know, and these feelings. So, like, we know what it feels like and one hour is not going to change perceptions. But hopefully today you’ve been speaking about storytelling, you’ve been speaking about alignment, you’ve been speaking about putting together cases for things that make sense. Like, I hope that this message is getting through, because for me, like, it feels like a really humanizing message and one that’s sort of like about collaboration and alignment, which feels really, really useful. As Montserrat says, it’s great that two finance people have ventured out and spoken about this matter, which is useful. As we as we close, maybe I could just ask you for any final thoughts on things that we haven’t covered off today. Because, like, we’ve been wide ranging, but I’ve also been a layperson asking these questions. And so is there any like piece of advice that you wish more marketers would know or that you feel like we’ve missed off from today’s session? And Stuart, maybe if I go to you
Speaker 3: first. That’s a good question. I don’t know if I missed off. I mean, I just say it’s a, like anything, it’s a constantly evolving things. And there’s not a rinse and repeat magic pitch deck or set of budgets or numbers or, you know, ROIs or goals that will work every time and each time, even with the same finance person. So I would say, make sure that you’re learning and it evolves based on what you learn, you know, as a marketer, really. And that might change some of the numbers and what you report on. And always just ask that question of like, what’s the company’s grand plan? What is the vision? What are we trying to achieve? Is it growth? Is it profitability? Those are really important contextual things around the numbers to understand to be able to deliver a successful
Speaker 1: kind of budget. Love it. So useful. So, so useful. Lee, final words?
Speaker 2: It’s really helpful. Stuart answered that bit because I think it, some Jason asked a question about story and potentially that incorrect answer about using the word story when it’s really what it means is context. The only other thing I was going to say was, we touched on it right at the top, is training each other. I think there is definitely language and communication that will be benefited by upskilling each other. And that is, if that’s as simple as breaking down a language barrier, or creating, you know, some sort of understanding of each other’s important words and phrases and acronyms, and then I’d encourage us all to do more of that. And I feel like I learned lots from you, Joe, all the time about what the right language is to use about things. And so, and I hope I’ve done some of the same back. And that, so that’s what I would encourage us all to be doing is like more of that.
Speaker 1: Love that. Well, you’ve, you’ve both gone a long way to doing that today. And, and like, also shout out to everyone who’s attended today, because I think by doing so, you have been part of that process in terms of opening your eyes and ears to a different perspective. And I, you know, I just want to commend everyone who turned up today, because that is like, that’s the magic, you know, I think that speaks to real empathy from the whole community as well. So thank you for being useful, and wonderful and brilliant as ever. Stuart, Lee, we’ve had our hour and everyone tuning in as well. So just want to say a big, big thank you. It’s endlessly appreciated. Before we go, I just want to say a big thank you once again to Sticky Beak, this week’s featured sponsor, you can get 100 pounds off your first test, we’ll put that in the follow up email. And likewise, all the rest of our sponsors, Front to Fly, Exclaimer, Planable, Cambridge Martin College and Redgate, as I say, we’ll, we’ll follow up with their details afterwards as well. Next week, we’re doing a very similar session looking at sales, and the intersection between marketing and sales. So another way, another opportunity to look out and understand our colleagues, which I think will be a lot of fun. So with all that said, it’s been an absolute pleasure. Stuart, Lee, you’re both legends, and everyone watching in, you are too. And I hope you have a really cracking week, everyone. Take care.