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How can you approach the CFO to argue for greater investment in your brand?

Learn to speak the language of the CFO in 900 words
How can you approach the CFO to argue for greater investment in your brand?

The message from the fourth floor was loud and clear: “We need to reverse declining revenues.” Carol, the CMO of a medium-sized pet food brand, knows well that she needs to translate her business’s ambition into focused brand objectives for her marketing team.

The reflex reaction for most marketers would be to offer sales promotions. Carol has gone down this path before, only to experience a fleeting moment of volume joy. Without taking her eyes off margin, she wants to first diagnose where the decline is taking place, and why. Based on these findings, Carol will then set clear objectives and calculate the incremental financial value of achieving each. So how does she go about doing all this?

Carol’s right hand person and brand management lead, Chen, believes that Kantar’s Blueprint for Brand Growth, has the answer. The paper starts with a truth bomb: If you have more equity than expected for your brand size (High Future Power), you are four times more likely to grow value share in the following year.

Future power has a proven link to increased sales value

This is in stark contrast to the indicators of size, salience and past behaviour that have been used as predictors of growth for the last ten years. Now, penetration is merely presented as an outcome and brand perceptions are put back at the heart of the marketing effort. So how can Carol and Chen secure the 1% penetration gain that they need for their brand? Using the Blueprint’s Growth Accelerators as a compass, they deep dive into their brand tracker and sales data for signals to set their objectives.

#1 PREDISPOSE MORE PEOPLE: The evidence proves that if people think quickly about your brand (salience) but also the right way (meaningfully different perceptions), then they command 5x higher penetration today and real advantage in penetration growth over the next two years.

Meaningfully different brands see 5x higher penetration

First, Carol and Chen work out which attribute would make their brand more meaningful and different in the mind of the consumer. Then, by how much they need to improve their attributes to increase brand revenues from €100m to €110m. This is a longer-term brand goal, but the team can still get halfway there by the end of the financial year.

They set their brand target: Increase perception that our brand ‘offers an appealing variety of flavours’ by 10% by 31 March.

#2 BE MORE PRESENT: The evidence proves that brands that capitalise on their predisposition with active intentional presence, have a higher likelihood of getting picked.

This means that if you stand out (on the shelf or search listing) with your distinctive assets, you can better convert predisposed people to purchase. Carol and Chen inspect their Kantar Worldpanel shopper data and realise that penetration is down in every retailer, in line with loss of their SKU assortment. Alarmed by a potential distribution issue, they set out to optimise their trade efforts. They make plans for a ‘Pet week/ quarter’, aiming to reassure their retail partners and defend their brand’s physical space. This is a shorter-term goal. Longer term, the team’s ambition is to start selling in stores all four of their SKUs as more category buyers become better predisposed to the brand.

They set their defensive target: increase offer assortment in main store chains to include an organic SKU by 31 March.

#3 FIND NEW SPACE: The evidence proves that a brand doubles its chance of growth when it finds new uses for its range.

A brand’s chance of growth doubles if it can find new uses for its range

Carol and Chen review their brand’s Demand Spread Score, only to find that it’s below average, meaning that they hit fewer demand moments than most of their competitors. They are aware of the emerging needs surfacing in the sector, that ‘treat or reward’ has become a new reason to be chosen. Rather than breaking boundaries, a brand of their size wins by breaking consumer habits, and so they devise a plan to do exactly that - steal purchases from competitors.

They set their consumption target: ‘treat or reward’ to become the brand’s additional demand moment, and Demand Spread Score to increase from 1.3 to 2 by 31 March.

As Carol walks back into the boardroom, she feels apprehensive. Her team has been called a cost centre in the past, so she needs to try harder (than any other department) to defend her budget. It’s nothing personal; only 22% of CFOs believe that their CMO demonstrates ‘excellent’ value to the business’ bottom line. And even the CMOs themselves (61% of them) admit that they find it challenging to communicate marketing’s impact on business outcomes.

But this time it will be different. Throughout her presentation, Carol stresses three key points:

1. The consumer is the origin of all financial values in the business – the marketing team knows them best.

2. The business decline is sharp – her actions will not only halt it but also recover past value lost.

3. Her marketing metrics are not some generic KPIs, they are utterly dependent on the business’s strategic objectives.

The modern marketer is “part artist, part scientist, part champion for marketing with a business”, as marketer of the year and CMO at Boots, Pete Markey famously depicts them. For Carol though, science played an even bigger role when she created her two-speed marketing plan to gain 1% penetration and bring an extra €5m into the business.

As she walks out of the room, she has newfound confidence in her team’s financial fluency. Their marketing goals and the story behind setting them spoke the language of the boardroom and helped Carol secure more investment budget than she went in for. She proved her financial understanding, aligned her work to business goals, and strengthened her team’s alliance with C-suite. The marketing budget will not be as easy to get slashed during cost-cutting. Carol continues to monitor progress and activate her strategy, according to the data.

To understand how our insights and strategies can propel your brand to the top, check out our Blueprint for Brand Growth page.

Want more?

Register for our digital launch on Tuesday 20 August and discover the Kantar BrandZ Most Valuable South African Brands of 2024. The team from Kantar bring the Growth Accelerators of the Blueprint to life, sharing success stories from our Top 30 homegrown brands to inspire your future growth strategies.

Join the conversation, follow us on LinkedIn and X for our latest insights and tune into FutureProof Mzansi, our marketing podcast to help you grow the brands of tomorrow.

31 Jul 2024 13:33

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About the author

Mary Kyriakidi is a global thought leader, brand guidance.