Five ways to bridge the gap between CFOs and marketing departments
The gap between CFOs and marketing departments is often much wider than it needs to be. The CFO is trying to make sure the operation is making money, and the marketing department just wants to spend it, right? Here are five suggestions to begin to bridge this gap in philosophies!
Marketing as a second language
Marketing is a foreign language to many finance people. The thought of spending money on things that aren’t always tangible is hard for us to handle. We acknowledge the need for marketers and the black magic they use to attract customers. Finance folks just want to make sure the show doesn’t cost more than the revenue it generates. Casinos need good marketing people AND good finance people. Preferably, good people who can work together for the good of the organization rather than being at odds constantly.
Marketing reports; the good, the bad, and …
Good reporting includes more than just revenues and expenses for promotions. Marketing and Finance should discuss in advance the elements to be captured to help paint a complete picture of marketing activities. New or creative methods may be necessary to accumulate the ideal data.
Analysis is critical
Analyzing marketing activities is a critical step for every promotion or event. Actual results should be compared to the planned or expected results. Anything unexpected or unusual should be investigated to help make future promotions more successful. It might also keep the finance people off your case. You’ve heard it said that numbers don’t lie. However, when it comes to analysis, the end result can be influenced or skewed by the numbers used. Marketing, Finance and possibly senior management should agree on what is reasonable for use in calculating and evaluating promotions.
Determining the “R” and the “I”
Finding agreement on Return and Investment between Marketing and Finance isn’t always easy. If the two have established the reporting and analysis processes and criteria discussed above, you will have a great foundation. Then all that is needed is to establish the specifics for each promotion. Some elements to consider are:
- What costs should be included in the investment?
- What are we going to include in the return?
- Are we using actual or theoretical wins?
Nothing is free
The idea that free play is not free is one that has dominated the industry for several years. Marketing departments understand this, but there is really a larger idea that CFOs would love to get across. Without good internal controls, staff has the power to “print money” by adjusting points and awarding comps or promos. Everyone recognizes the need for internal controls around the cash within the operation. It’s cash! The reality is marketing incentives also carry value. Points, promotional items, complimentary items, and promotional play are all valuable from a financial perspective. Without good controls over those processes, the casino is exposed to fraud and abuse.
