April 13, 2005
If your target audience is CFOs, you're probably in a world of marketing pain. As our new report reveals, CFOs ignore most ads. So, how can you get them to respond? Our new Special features a wealth of research to solve your problem, including copywriting tips, top 3 pain points, and both demographic and \"psychographic\" data. You'll get inside the mind and even the daily routine of a typical CFO. P.S. We showed a preview copy of this Special to the Managing Editor of CFO Magazine, and she said it was right on target:
By Dianna Huff, MarketingSherpa B-to-B Contributor
Let’s say you need to create a marketing campaign with the ultimate goal of getting your field sales rep a meeting with a prospect's Chief Financial Officer (CFO). You'll probably try one of the following tactics:
o Cold call using an outsourced telemarketing firm or your inside sales folks.
o Invest in an expensive, glossy DM or advertising campaign promoting your “solution” that “optimizes” productivity.
o Send an email campaign to a list you rented (or place a lead gen offer in an email newsletter CFOs read).
Your campaign falls flat. You have no clue why.
Welcome to the world of marketing to CFOs – a world where its inhabitants turn a deaf ear to marketing lingo and a blind eye to flashy creative. If catchy headlines aren’t going to reach the people “who sign the checks,” what will?
First, let’s talk about who a CFO is, the day-to-day job, and how issues such as Sarbanes-Oxley are affecting the CFO and businesses in general.
Twenty years ago, CFOs toiled in relative obscurity managing back-office functions like bill paying and budgeting. According to CFO Magazine, risk management meant buying insurance, not “guarding against terrorist attacks.”
No longer a “number cruncher”: CFO's three roles
Times have changed for the CFO, who is now seen as a strategic partner to the CEO, many of whom see CFOs as their second-in-command. Due in part to technology and accounting software – which have freed up finance departments – CFOs have seen their roles significantly expanded.
According to the Spencer Stuart report, “The Global Fifty: Perspectives of Leading Chief Financial Officers,” today’s CFO is responsible for the following three roles:
Role #1. Strategic planning and decision-making To be fully effective, a CFO must understand the changing dynamics of the “big picture,” and provide insights and knowledge of the competitive landscape.
Role #2. Financial community liaison CFOs are now responsible for communicating the company’s value, building rapport with analysts and investors, and most important right now, maintaining trust and communicating integrity – in the CFO, the company, and its numbers.
Role #3. Management team member In order to be effective, a CFO must partner with COOs, CEOs and other members of the management team. A CFO’s main job is to take away the “financial worry” from a CEO and provide opportunities to “see the horizon.”
Demographic data & how CFOs spend their time
According to surveyed CFO Magazine readers, the majority of CFOs are male (82%), are 35-45 years old, hold a CPA and MBA, and have risen through the ranks of finance departments. A CFO earns anywhere from $100K on up -- including options and other forms of executive pay -- depending on the organization type (public, private, non-profit, government, etc.), geographic location, and revenues. A typical CFO has been on the job for at least five years.
CFOs purchase or authorize procurement for the following products and services: - Accounting/Auditing - Budgeting and Planning Software - Performance Management Systems - 401 (k) Providers - Insurance - Risk Management - Health Group Benefits - Technology Services - Legal Services - Outsourcing - Executive Staff/Education
Like other C-level types, finance officers spend most of their time in meetings, either on conference calls or face-to-face, talking with industry analysts, department heads, and ratings agencies.
The rest of the CFO’s time is spent on questions about data: finding good data in a timely fashion and dealing with incorrect or inaccurate data. Budgeting and budget forecasting is a pain, with many companies still using Excel spreadsheets to generate numbers, as is preparing for board meetings. According to Natalie Alarcon, Controller for QAS, makers of QuickAddress software, such preparation can take over 20 hours a month and is incredibly labor intensive.
CFOs work on two levels – the micro and the macro. An effective CFO delegates number crunching activities so he can think about how to create capital and resources for the future. His job is to make sure the company is there in 10 years.
Top three CFO pain points:
CFOs today have a full plate of issues and pain points – everything from pesky shareholder activists and costlier than ever auditors to rising health care costs and pension plans.
Says Wick Sloane, currently of start-up ChangeToolKit.com and a 25-year CFO veteran, including stints at University of Hawaii, Aetna and other companies, “Salespeople are continually pitching products to me but none of them understand my headaches. I don’t need securities, I need clear data on how to manage assets, liabilities and risks at my company.”
Caroline Smith, Director of Marketing for CFO Magazine, confirms Sloane’s complaints. “Financial and accounting rules are changing all the time,” she says. “CFOs are thirsty for knowledge. Give it to them and you’ll get their attention right away.”
The three top issues facing CFOs today are: compliance, communications, and financial planning. What follows is a brief run-down. If you’re serious about marketing to CFOs, it behooves you to research these and other topics in detail.
Pain #1. Compliance
The most significant change to federal securities law in the U.S. since the New Deal, The Sarbanes-Oxley Act (or Sarbox as it’s called) was signed into law in 2002 and is designed to review dated legislative audit requirements and protect investors by improving the accuracy and reliability of corporate disclosures.
In short, CEOs and CFOs are now criminally liable for signing off on misleading Securities and Exchange Commission filings.
Despite its intent, however, Sarbox is a pain in the butt for CFOs. According to a November 2004 study by J.D. Powers and Associates, nine out of ten CFOs say the costs of complying are greater than the benefits. The study also found that “many of those involved in the auditing process, from senior management to the audit committee on down, are feeling the pressure of increased requirements.”
Regulations are even affecting how companies woo clients. The Wall Street Journal recently reported financial organizations are cutting back spending on high-profile corporate junkets – like the Masters golf tournament. The National Association of Securities Dealers has cracked down on excessive gift-giving and entertainment and is forcing companies to rethink spending millions of dollars to impress clients. (“Junkets with a Twist: Wall Street Clients Get Bills for the Fun,” April 7, 2005)
Pain #2. Communications
Gone are the days when a CFO was responsible for merely producing P&L statements. In addition to understanding the entire enterprise, seeing the “big picture,” and providing sound financial advice to the management team, a CFO also needs to communicate the company’s value and integrity to analysts, investors, and employees alike.
“In my twenty-five years in this business, no one selling me products has yet talked to me about how to communicate finances to the people in the company,” comments Sloane. “A CFO needs help combining business ideas and finance metrics. How, for example, can I show employees that their jobs are directly related to the numbers? Reports for rating agencies or analysts are for that audience, not employees.”
Adds QAS’ Alarcon, “I need financial benchmarks so I can interpret our company’s metrics to my CEO; for example ‘What is the cost per lead or cost per employee for companies like mine?’ And I need information about big picture issues, such as compliance, not another product pitch. I don’t have time to listen.”
Pain #3. Financial Planning/Reporting
More than 40% of respondents to a jointly produced survey by CFO Publishing Corporation (owners of CFO Magazine) and Geac reported one of their top priorities is to improve their planning processes and to provide better forecasts. However, many CFOs don’t have the necessary tools. Indeed, 61% of survey respondents say they “need more or new technology to buttress their decision-making capabilities.”
A whopping 90% say their finance organizations get bogged down during the planning season with “low-value, seemingly trivial tasks” due to organizational dynamics and inconsistent internal information. And, 44% say they still use spreadsheets and manual processes to manage corporate performance!
Copywriting that CFOs respond to: information, information, information
“We’ve done research,” says Smith. “CFOs are a discerning bunch. They are not impressed with flashy marketing material, hate clutter, and can’t stand marketing language. Anything that gives them information, however, is going to capture their attention.”
CFOs want information on how to run their businesses and finance teams, how issues are affecting other companies in their industries, how to improve communication, risk management, etc. Give it to them – in the format they want – and you’re well set to open the sales conversation.
Believe it or not, CFOs want printed material with large fonts formatted for easy readability -- because many of them wear glasses. Loading something down with graphics or pictures is not going to get a CFO’s attention, no matter what your high-priced ad agency says. And, steer clear of lingo such as “optimize” and “solution.”
Says Smith, “We’ve found CFOs routinely use the ‘printer friendly’ feature on our Web site for printing articles to read on the plane or elsewhere. Emailing articles to other people is also big.”
Here are some more hands-on tips for the four most common marketing tactics used to reach CFOs:
Tactic A. Direct mail
According to Smith, a simple one-page direct mail letter in a plain #10 envelope works best. Creative mailers to this audience are simply a waste of time. The letter should have a clear, well-defined offer for information – CFOs love high-level white papers (it goes without saying they should be clean and well-written). Executive reports based on studies or research results are also very popular.
Tactic B. Telephone
A typical telemarketing cold call is not a good tactic to use with a CFO. However, calling a CFO after sending a special report or white paper works well – provided you’ve done your homework. Know whom you’re calling, what issues the company may be facing, and how you can help solve problems. Again, don’t pitch – ask questions and develop a rapport.
Tactic C. Email
Email can work well provided it’s “plain vanilla” in terms of graphics with easy-to-read copy that offers CFOs high-value information.
Tactic D. Events
As with other C-types, well-heeled executive breakfasts, roundtables, and presentations (online or off) are quite effective. Events should feature A-list experts on topics that concern CFOs. Says Smith, “We’ve found events featuring speakers from research companies are very popular.”
Lastly, learn how to talk to a CFO in his language. Says Sloane, “It’s wonderful when I meet someone who ‘gets it’ – that is, someone who understands finance and my job.” If you know little about finance, Sloane recommends reading, Finance for Dummies and The Portable MBA. Attending CFO association meetings is good, too.
Above all, follow through with promises. Says Alarcon, “I often ask salespeople to send information so I can read it later. I would say 90% of the time, nothing comes.”
Useful links related to this article:
MarketingSherpa's past Case Study, "Online Marketing to CFOs of Multibillion Dollar Companies": http://library.marketingsherpa.com/sample.cfm?contentID=2828
CFO Magazine & CFO.com : http://www.cfo.com
ChangeToolKit : http://www.changetoolkit.com
Spencer Stuart: http://www.spencerstuart.com