When trying to work together, marketing and financial departments always seem to clash on how much to spend and where to designate spendings, which ultimately causes a rift between the two departments.
Marketing wants to spend more on marketing activities to increase market and value shares, whereas finance wants to save and spend efficiently, to maximize revenues and profit margins.
What is the source of this clash? Afterall, both departments share the goal of maximizing ROI.
Marketing teams focus on where and how to spend on creative strategies to increase their market shares, whereas finance teams are evaluated by finding opportunities for saving and decreasing cost to maximize revenues and profit margins.
Both departments have great directions for optimization; however, what is the best way of creating a collaborative strategy between both departments to increase prices, without losing your customers?
The issue is that it is difficult to predict the ROI since it is hard to gauge the reaction of consumers towards marketing activities, therefore the financial department perceives this as a big-spending risk.
In the past few years, many multinational companies have realized that in order to achieve their end goal of maximized ROI, there must be a shared commercial vision and the utilization of effective research tools that quantify data and insights to measure consumers’ perceived product value and integrate with other internal and market data
Hence, these large companies have started applying big data analytics to predict consumer purchasing behaviors and reactions to marketing activities and price increases. This has paved the way for the creation of product pricing strategies, thus, appeasing departmental dilemmas for revenue maximization.
How are the relational dynamics between your marketing and financial departments?
For more information on how you can optimize your pricing strategy for revenue growth, contact us for consultation.