A Twitter thread about the need for marketing and finance to work together led to an interesting comment from business school professor Bruce Clark about profitability.
Samuel Brealey: Sad fact is that the purse holders are trusted, and if they trust the marketers, then it opens more doors… Many marketers simply aren’t interested in those conversations, or aren’t qualified to look into them.
Alastair Thomson: Finance people are there to maximize the profit not minimise the cost. That sounds like the same thing, but it isn’t…
David Laud: Precisely – true there’s often a fear amongst marketers in getting into a conversation around financial matters relating to budgets and outcomes. It’s not rocket science, any marketer worth their salary or retainer should be tuned in to ROI, ROAS & welcome engaging with the CFO
Bruce Clark: This attitude is something I try to beat out of students in class (“you must be able to talk about money”), but sadly, some marketing students go into it precisely because they don’t want to do arithmetic.
One of my interesting challenges over the last decade has been the tech firm pursuit of growth without a prospect of profit. As the stock market has rewarded this behavior, it has been harder to convince marketing students they should care about profit.
In the path between initial growth and eventual profit, too many tech firms appear to have a step labeled: “a miracle occurs.”
Andrew Everett: Yes, it’s called “exit strategy.” It’s not about creating viable businesses. It’s about creating IPOs (or being acquired).
Alastair Thomson: Relies heavily on the “bigger fool theory” we’ve spoken about before, though, Andrew…