When I was in the United States one of my classes taught by Prof. Mary Long gave us a document, that explained why it is important for marketers to learn marketing/business financials. I have decided to share that document with you guys.
Marketers Must Learn Martian (AKA, the Language of Business) – Heather Fitzpatrick (Published on December 17, 2013)
In the 1992 best-seller Men Are From Mars, Women Are From Venus, author John Gray argued that men and women have fundamentally different psychological make-ups that drive miscommunication and can lead to dysfunctional relationships.
Marketing professionals and their non-marketing counterparts, particularly those who come from a financial background, suffer from a similar problem.
The consequence of the dysfunctional relationships that emerge within a corporate setting is substantially reduced profitability. Unfortunately, it is often the marketing professional who becomes the scapegoat for the sub-par performance.
That is why marketers must learn to speak in financial terms.
The Root of the Problem
Gray’s book argued that the fundamental differences between men and women affect how the genders think, how they react to stress, what their expectations are relative to communications, and so on. In many cases, these expectations are so different that it may seem men and women come from entirely different planets. To make the relationship more functional, Gray asserts, men and women must each understand the cultural context of the “planet” on which their life partner grew up.
Like men and women, marketing professionals and their non-marketing counterparts may also seem from different planets. Marketing professionals’ natural interests, training, and—most important—their language may differ significantly from their non-marketing counterparts’.
The language gap causes anxiety on both sides. Marketers are frustrated as their budgets and strategies are contested, and they worry that the C-Suite perceives them as the source of the problem rather than a resource for solutions.
Non-marketing executives are anxious about the investments they are making in marketing activities, ranging from social media to new channel development, and may even consider marketing a dark art that eludes measurement and exudes risk.
Why Marketers Must Be Linguists
In most organizations, that planetary gap is cultural. The struggle between Marketing and Finance or Operations, or both, is expected by both sides. It is up to the marketing team to change the dynamic.
The benefits of the effort are substantial. In addition to reducing potential misunderstanding and distrust, marketing professionals have three other reasons for learning to speak in financial terms.
- Market leaders are bilingual
Our research indicates that the most effective companies—the organizations that are leaders in their industries—are led by executives who fundamentally understand marketing. In fact, in most cases, the CEO considers himself or herself to be the leader of the organization’s marketing efforts.
Because the CEO understands the market and how marketing investments are designed to produce results, he or she helps translate marketing requirements into the financial language require by shareholders, investors, and others.
When the CEO effectively bridges the language and behavior gap between Marketing, Finance, and Operations, the organization becomes bilingual. At the very least, the people in the organization have a working understanding of the language, priorities, and cultural context of individuals whose contributions to corporate success differs significantly from their own.
The advantages to market leaders of this common language are significant. They are more likely to be on the same page regarding business strategy, target markets, and required investments, less likely to discontinue critical funding before strategies are fully executed, and more adept at gathering critical information from and about their markets.
Unfortunately, most companies are not bilingual. In fact, in some cases the CEO and other non-marketing executives may see little value in understanding the language or discipline of marketing. In these cases, it’s up to the marketer to become the translator.
To tap the same critical information—and make a positive impact on the company’s strategies—the marketer must learn to interpret the data he or she is presented and ask informed questions about the market and the company’s financial strategy.
- Financial terms are the universal language
For better or for worse, the language of marketers is not the universal business language. Money is.
As marketers, we know this, of course. It’s why 83% of marketers say demonstrating measurable returns on marketing investments is critical to their success, and why 75% of marketing professionals list their concern about making that happen as one of the top four worries that keep them up at night.
Marketing is measurable in financial terms. However, not all non-marketing professionals believe that. To counter this Measurement Myth, marketing professionals must be fluent enough in financial modeling concepts to persuade even the most difficult skeptics of the value of the investments they want their organizations to make. Doing so requires both a strong command of the language of finance and an understanding of the information systems that can be used to track outcomes against expectations.
- Speaking a common language keeps everyone focused on the goal
Marketing requires expertise and understanding. It also requires both a steadfast focus on the organization’s goals and consistent execution in order to reach them.
Unfortunately, Marketing is also highly subject to sabotage by non-marketing managers whose vision of the goal is not as acute. A financial downturn prompts the executive team to cut funding of key marketing initiatives, the sales team does not execute on the leads generated through promotions, a rogue division erodes brand integrity by failing to adhere to visual guidelines when developing collateral, or the manufacturing team can’t meet production quotas.
In many cases, this lack of vision or unintentional sabotage is directly connected to the cultural differences between marketers and their nonmarketing counterparts. Because they have different values, language, and training, they may have difficulty visualizing the outcomes the marketing team has in mind—or the importance of contributing factors such as brand consistency or customer satisfaction.
If marketers reach out to translate marketing initiatives into financial terms, articulating the importance of consistent execution and sustained focused to financial outcomes, the company’s non-marketing executives are more likely to help ensure that everyone within the company is marching in the same direction.
And Here’s the Good News: It Isn’t Hard
Though it is an effort to learn a new language, it isn’t as hard as many marketers believe it to be. It can be intimidating at first, but the experience is similar to learning a language before traveling to a foreign country. You may not be fluent, but the sheer fact that you’re trying to speak to someone in their own tongue makes them more likely to try to help you. Even unpolished financial skills will go a long way toward bridging the planetary gap.
And your skills will improve with practice. I’ve taught many marketers to speak in financial terms, and even the most numbers-averse clients have been able to adopt the simple ROI models and metrics we designed for their use. It doesn’t have to be difficult.
The benefits of trying are significant—as are the risks of refusing to learn.
Marketing professionals who steadfastly refuse to learn to speak in financial terms will remain the scapegoats for missed sales goals and poor financial performance, victims of the cultural divide between marketing and non-marketing disciplines within their organizations.