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Marketing teams spend considerable time demonstrating their contribution to the business. But the metrics they use to show success don't always mean much to the people making investment decisions.
Clicks, MQLs, pipeline and attribution figures might demonstrate activity or progress within Marketing. For a CFO, the questions are more fundamental: how much money is the business making, what does it cost to generate that return, and when will the cash arrive?
In Episode 3 of Revenue Dynamics: Marketing, Sales, and the Economics of B2B Growth, Dale W. Harrison is joined by Tom Grunwald, CFO at The Insight Collective, to explore what Finance actually wants to see in a marketing report.
Building on Episode 2's examination of the true cost of B2B leads, they discuss why conventional marketing dashboards often fail to demonstrate commercial value and how marketers can report performance in a way that supports better business decisions.
What does a CFO actually want from Marketing?
From the CFO's perspective, Marketing and Sales form part of the same commercial system. Money goes in, activity happens and, ideally, more money comes out.
Tom describes this as a black box. Finance can see what the business invests and what it eventually receives, but understanding what happens between those points is much harder.
What a CFO wants, he explains, are a few pinholes in that black box: enough visibility to understand how today's investment is likely to translate into future financial performance.
And that means looking beyond leads, pipeline and even revenue.
Revenue isn't the same as cash
A B2B sale doesn't necessarily produce money in the bank straight away.
Months might pass between the initial marketing activity, a sales conversation, a signed contract and the customer actually paying their invoice.
A deal could take 90 days to close, followed by another 30, 60 or even 120 days before payment arrives. For businesses managing tight cash flow, those delays have significant implications.
That's why a CFO is interested in what today's Marketing and Sales activity suggests about cash flow three, four or six months from now.
They aren't expecting certainty. They want information that helps reduce uncertainty about the business's financial future.
Why conventional marketing dashboards fall short
Tom and Dale argue that much of what appears in a typical marketing dashboard does little to answer those questions.
Clicks, impressions, MQLs and pipeline figures can be useful operational measures. But presented in isolation, they offer limited insight into the commercial outcomes the business can expect.
Worse, many can be improved without making the business any more successful.
When better metrics don't mean better performance
Dale gives several examples.
If MQL volume is falling, changing the lead-scoring threshold can make the number rise again. Moving advertising spend toward branded search can increase click-through rates by capturing people already looking for the company.
Neither necessarily creates additional demand or revenue.
Pipeline presents a similar challenge. Salespeople estimate how much an opportunity might be worth and when they expect it to close. Those estimates can be optimistic, particularly when teams are measured on the size of their pipeline.
Dale recalls tracking his sales teams' predictions against actual outcomes, then adjusting forecasts to account for their historical tendency to overestimate deal values and underestimate closing times.
The problem becomes more pronounced when businesses use default CRM probability weightings. A deal assigned a 30% probability because it has reached a particular stage isn't necessarily comparable to every other deal at that stage.
Its actual likelihood of closing may depend far more on the type of customer and the business's previous success with similar accounts.
Why attribution can undermine credibility
Marketing-originated versus sales-originated pipeline is another common source of disagreement.
Dale and Tom have little patience for arguments about which function deserves credit for a particular deal.
A prospect might have encountered years of marketing activity before speaking to Sales. Equally, a supposedly marketing-generated lead might have come through a personal recommendation that no attribution system recorded.
Tom has seen senior leadership meetings consumed by debates over who generated an opportunity, when the more useful questions concern whether the deal is likely to close and what it could contribute financially.
Attribution can still help marketers compare campaigns, channels and audiences. But presenting it as a precise measure of Marketing's contribution to business revenue can create more questions than it answers.
Finance is generally more interested in a credible, evidence-based forecast than a claim of perfect attribution.
What a useful marketing dashboard looks like
For Tom and Dale, effective reporting starts with the relationship between the opportunities entering the pipeline and the business's ability to win them.
Are these the kinds of customers the company has successfully sold to before? How much Sales effort will they require? What are they likely to be worth, and when might the resulting revenue turn into cash?
Much of the information needed to answer those questions already exists in CRM and accounting systems.
Forecasting revenue using historical performance
Dale highlights weighted pipeline as a particularly useful measure, provided the probabilities reflect actual historical outcomes.
If $5 million of pipeline typically produces $1.2 million in revenue, and the business understands how long those deals take to close and pay, Finance has a much stronger basis for forecasting future cash flow.
The analysis can become more useful when it accounts for customer characteristics.
Win rates, average contract values and sales cycles can vary substantially by industry, geography, company size and other firmographic factors.
Rather than assigning every opportunity the same probability based on its CRM stage, businesses can compare it with similar historical deals.
Where there's less data, the forecast should reflect that uncertainty.
Tom also sees considerable value in understanding the expected lifetime value of customers entering the pipeline. A contract that generates revenue for ten years has very different economics from one that ends after twelve months.
The aim is to give Finance a realistic view of the returns the business can expect from its commercial investment.
Measure return on sales effort
Dale argues that one of the most useful measures for high-value, sales-led B2B businesses is return on sales effort.
A lead might cost $50 to generate but require thousands of dollars in Sales resources before it becomes a customer. Marketing ROI calculations that consider only campaign spending overlook much of that investment.
Instead, the business needs to understand the relationship between the effort required to win customers and the financial value those customers generate.
This also means looking beyond revenue to contribution margin: what remains after the relevant costs of generating and delivering that revenue have been accounted for.
A large contract isn't necessarily attractive if closing and servicing it costs more than the return justifies. Equally, a segment with a relatively low win rate could be commercially valuable if deals close quickly and generate substantial profit.
No single metric tells the whole story. Win probability, deal value, sales effort and customer lifetime value need to be considered together.
Why bigger deals aren't always better deals
Tom also cautions against the tendency to focus on the largest opportunities in the pipeline.
Boards and leadership teams can be drawn toward a multimillion-dollar deal with a recognizable company, even when the business has little experience winning customers of that size.
Meanwhile, twenty smaller opportunities resembling customers the company has successfully served before may offer a more predictable and attractive return.
There are risks even when the large deal closes.
Tom recalls a logistics business whose revenue depended heavily on a single major customer. When that customer's procurement team demanded a price reduction, the impact was significant.
Customer concentration can create financial risk and reduce the value of a business to potential investors or acquirers.
For a CFO, a portfolio of profitable, predictable customers may therefore be more attractive than one dominated by a handful of impressive accounts.
And those outcomes begin with decisions made much earlier in the process, particularly which customers Marketing chooses to target.
Connecting Marketing to business value
The central message from Tom and Dale is that Marketing has considerably more influence over a company's financial performance than its conventional reporting often suggests.
Decisions about the ICP, targeting and brand investment shape which companies enter the pipeline and how likely Sales is to win them.
Those decisions ultimately affect acquisition costs, customer value, cash flow and the long-term value of the business.
Demonstrating that contribution requires moving beyond isolated activity metrics and understanding how Marketing's decisions influence commercial outcomes.
The most useful marketing report isn't necessarily the one with the most impressive numbers. It's the one that helps the business make better decisions about where to invest and what financial return to expect.
For businesses looking to connect targeting and lead qualification more closely to commercial outcomes, our Next-Gen MQL approach uses historical sales evidence to identify where investment is most likely to generate a worthwhile return.
