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GUEST COMMENT Agility shouldn’t end at the finance team

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Effective data-led campaigns require quick decisions. These are typically micro dials to tune up performance in relation to emerging behavioural trends, whether these relate to existing customers or prospects. The financial implications of these smaller adjustments can usually be accounted for within the scope of seasonal budgets, which are generally set in stone. However, sometimes opportunities emerge that simply couldn’t have been accounted for at the planning stage.

Securing top-up budget from the finance team in such instances can be a lengthy process and often the moment has been lost by the time the various hoops have been jumped through.

Unfortunately, agility just doesn’t sit well with the bureaucratic processes of finance departments, particularly in siloed businesses. Finance teams need a business case for every budget request and for each release of funds to be signed and countersigned. Checks and balances are all very well, but they don’t sit well with the digital world in which time is so often of the essence. 

The irony is ecommerce has been quick to embrace the types of agile methods beloved of start-ups. Most notably, many online retailers are experimenting with spend on channels and territories to align daily/weekly budgets to performance. This isn’t a problem when it is drawn from allocated funds, but it’s a different story when a top-up or more significant investment is required.   

Understand the motivations


While sales and marketing teams have traditionally been driven by short-term targets – and thus most likely to want to seize any opportunities as they arise, finance teams are – understandably – a more cautious bunch. They are wedded to quarterly or annual growth plans and their interest lies predominantly in revenue targets.

In the case of more enlightened data-driven businesses, the finance department may be thinking ahead to next year’s targets based on customer acquisition figures, but this is the exception rather than the rule.

The CEO is (or should be) focused even further ahead because long-term growth potential is where an investor’s attention lies. Consequently, they are most interested in the lifetime value of the most profitable customer segments and territories.  

Securing budget can therefore require an understanding of who controls the budget and how they think: the finance director will likely be unwilling to release funds until they’ve seen a clear business case for revenue growth; a CEO will only be open to the investment if you can prove there’s a viable long-term return-on-investment.

Rethinking budgets


With so many stakeholders, each with a particular agenda, finding a compromise that will suit all parties can be challenging. But that shouldn’t preclude one being sought.

What’s clear is quarterly, or even monthly departmental budgets can be restrictive, or at worst detrimental. After all, if something is demonstrably working, it makes no sense to pass it up. The key questions are; first, how do you demonstrate where the opportunities lie, and second how do you build in greater agility for the budget holder? 

The answer to both questions lies in keeping a close eye on data analytics.

Daily customer reporting reveals the customer trends to evaluate for consideration for opening up discretionary funds. However, an upward spike does not always represent an opportunity so a degree of caution is required and it’s important to evaluate these against particular data points that speak to short or longer-term opportunities.

The first factor to evaluate is if any short-term revenue growth will stack up against the cost of the customer acquisition? If not, will the opportunity bring in the types of customers that are likely to make repeat purchases in line with existing customer modelling and cohort segmentation?

If a case can be made either way, the next factor to address is how to allocate budgets to allow for greater agility. The options here include setting aside a weekly slush fund that can accumulate over time, if opportunities have not presented themselves and can be reinvested if it remains unused after a certain period.

An alternative is to set a weekly, monthly or quarterly contingency budget that can be scaled up or down in line with real-time data. In either case, the CMO has the option to under market to put budgets into more aggressive strategies as and when the time is right.


Who should own the budget?


The million-dollar question though is who should administer this budget, if not the finance team? The most obvious answers might seem to be the marketing department, or indeed the IT team.

However, it is worth remembering that growth opportunities can lie anywhere within the business. After all, using the data to spot a way to drive efficiencies in the last mile can save far more money than an influx of one-time buyers will bring in. 

A data-driven and connected business should be working towards shared goals with all departments having shared access to the same data – and thus a shared budget if there’s a case to be made.

Greater fluidity means quick decisions, and as such giving the CEO the final approval on releasing funds for time-sensitive opportunities, can be a good decision – if you have the right CEO. However, it is worth bearing in mind that these are busy people, adding an extra layer of decision making to their daily responsibilities may not be helpful.

This brings us full circle back to the finance team because actually the CFO does have a broad overview of the business and within a functional C-Suite will be working closely with the CEO to balance long-term ambitions with the day-to-day.

So, the answer is, there’s no right answer as every business operates differently. In fact, it doesn’t matter too much who manages the discretionary budget. The trick is speaking the right language to present an opportunity in a format the budget holder – whoever that may be – can grasp quickly in terms of KPIs aligned to the right metrics.

This means being able to present data in a considered way to make a case in relation to an agreed strategic priority. Agility should be baked into how any successful ecommerce business operates and what holds this back is the concept of departments in themselves.

Freeing up a portion of the budget to be made available to drive growth across an entire organisation is a great way to underline this philosophy and fuel intrapreneurialism.


Fran Quilty, CEO and founder of Conjura

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