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Finances

Why digital marketers need to understand their company financials

By Liz Moorehead

Why digital marketers need to understand their company financials Blog Feature

Every Tuesday, our entire company (both remote and at HQ in New Haven, Connecticut) comes together for a company-wide all hands meeting.

The stated goal of this meeting is as follows:

"We all understand the health of the company, are aligned and celebrate and share all we’ve learned and accomplished."

In order to accomplish this, IMPACT COO Brie Rangel coordinates with different company leaders and individual contributors each week to help update the company on:

  • Progress against key objectives we have as a company
  • Deep-dives into initiatives, projects, and other big and exciting things 
  • The five top-performing new articles for the week by our internal content champions
  • How content helped attract, nurture, and/or close a recent deal
  • Recent birthdays, milestones, and anniversaries of employees
  • Shout-outs, recognition, and (what we call) "happy thoughts"

Most of all, however, we review, in some capacity, the financials of our company.

I say "in some form," because we are always working to improve the ways we report and share that data as a company; so, while we have evolved this practice over time — and will continue to evolve, as we find ways to improve and iterate — the principle has always remained the same:

As a company, we all talk about financials, even though almost all of us (myself included) are digital marketers and not finance folks.

And this charge is led by IMPACT controller Eric Choma., who strongly believes in the importance of organizational transparency around company finances, as well as financial literacy for all employees. 

But why?

Well, according to Eric:

"It's easy to focus on just sales and marketing as a way to grow a business, but there's much more to it than that. Don't get me wrong, sales and marketing are the keys to long-term growth and sustainability for a company.

That being said, I believe that every employee needs to put an equal amount of energy into understanding the financial health of a company. Only through the examination of financial statements can you truly understand the impact you can have on the bottom line and the truth health of a company over the long run."

It's this framing that has led our employees to take what we call "an owner's mentality" when we make choices — purchasing tools, running expenses, department budgets, and so on — for the business. 

Meaning, through our financial transparency, we make it a point to focus not only on how we make money, but also how we spend money. We examine both. 

Why financial transparency matters and how we've adopted it at IMPACT

Eric shares this about our open-book approach and why this transparency works:

"[Our open-book approach] allows us to be just as proactive about managing our expenses as we are with managing our revenue. It is an opportunity to teach financial literacy within the company and help everyone understand how their job affects the bottom line. We are an organization where the majority of individuals are in marketing or sales-focused role."

Put another way, many of you reading this article right now are exactly like me. You're creatives, not number-crunchers.

Truth be told, I felt a bit lost with all of the spreadsheets and different terms being thrown around when we first embarked on this approach, although I understood the "why" behind it. 

Now, however — even though I feel like I'm still learning a new term or financial concept from Eric at our all hands meetings each week — I am so grateful for the effort put forth by IMPACT to take this approach. 

I now see Eric's point clearly, as it is one that is not exclusive to IMPACT. In fact, it is true about your organization, regardless of size, industry, or what you sell. Marketing and sales innovation are only part of the equation. Every company employee needs to make a commitment to financial literacy with an owner's.

They are creatives like many of you reading this, but the most successful, growth-focused professionals know that marketing and sales innovation is only part of the equation.

As Eric puts it, "It's about making that critical shift mentally from working 'in' the company vs working 'on' the company."

How financial literacy and transparency helps marketers and other contributors

According to Eric, "I know it may sound easy for me to preach about financial literacy, because I'm a finance guy myself. I get that. I also acknowledge that this is one of the hardest things to do if you're not in a financial role.

But, by taking the time to understand the financials of your own organization, you (as a team member, regardless of your role — marketer, sales, designer, whatever), you can get much clearer visibility and understanding into how what you do every single day impacts the bottom line.

A great example is this. Someone on your marketing team may not understand just exactly how much you're really spending on a month-to-month basis for tools and technology subscriptions. This can be a very common problem, since we all know how much marketers love tools and tech.

Once you make it a point, however, to have your marketing team examine how much they're really spending on tools on a monthly basis, you'll likely find there are a bunch that can either be trimmed down or canceled."

We went through this exercise at IMPACT over a year ago, and Eric is 100% accurate here, by the way. Even though we all thought we knew exactly what subscriptions we had, we definitely found a few lingering subscriptions we no longer needed. 

In addition, it also forced us to have really productive discussions around what we really needed, whether the current tools we had were still fitting the bill, and so on. 

How to get started with your own financial literacy as a digital marketer

Again, I know a few of you may be shaking your heads at the importance of this level of open-book financial "show and tell" at your company.

But I cannot stress enough how flipping this switch, so everyone at IMPACT has an "owners mentality" — not just the owners — has radically improved our company and helped us better understand we need to do to hit our objectives.

For those of you who are more senior leaders or business owners, established systems like the Great Game of Business and Scaling Up have helped us implement this way of financial reporting at IMPACT. 

But for those of you like me who may be into this idea but don't know where to start, I have one piece of advice for you:

Ask questions.

Ask questions individually to your financial leaders — hopefully, they're like Eric, who relishes every opportunity to help someone better understand our company books and to whom no question is a dumb question.

Or go online and seek out answers to questions, definitions to terms, and so on. 

Because, the "bottom line" here (heh, pun intended) is that even if your company goes out of its way to report on financial health, it will still, ultimately be up to you to be an active participant. 

To be, yourself, an owner.

Topics:

Finances
Published on February 28, 2020

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