As the dynamic landscape of the automotive industry continues to modernize, expectations of the Chief Financial Officer (CFO) are expanding. Today's CFOs are going beyond traditional financial planning and analysis (FP&A) to become a leading influence on the customer experience. Once confined to balance sheets and profit margins, CFOs must recognize their impact on corporate strategy and better integrate across functional teams to tie investment decisions and integrity to targeted outcomes. This shift underscores a new era, where financial strategy seamlessly intertwines with the customer experience, driving innovation and fostering brand loyalty.
Connecting Financial Strategy to the Customer Experience
Financial strategy not only ensures an organization can continue to operate; it directly influences the long-term success and innovation of an organization, which directly impacts the customer experience. This high level of influence is transforming how CFOs are evaluated today; Travelers’ 2024 CFO Study found strategic planning for future company success and resiliency to be a CFO’s most valuable skill. CFOs are not exclusively fiscal experts, instead organizations are hiring CFOs with broader strategic backgrounds and vast understanding across operations, product, marketing, risk, and finance. Armed with comprehensive financial insights and a strong strategic mindset, CFOs are uniquely positioned to bridge the gap between fiscal responsibility and customer-centricity.
CFOs assume tremendous responsibility for the success of an organization. Instead of being the de facto risk-averse leader, CFOs should recognize their direct influence on their organization’s approach to customer strategy. CFOs who are involved in an organization's strategic and operational decisions and who understand how those decisions influence FP&A have the unique capacity to take an educated, proactive approach to risk management. By aligning financial goals to growth initiatives, CFOs pave the way for innovation that resonates with their customers, driving engagement and differentiation in a fiercely competitive market.
Making Customer-Centric Decisions
When considering customer-centricity, every decision holds the potential to either strengthen or undermine brand affinity. Empowered CFOs recognize high-value opportunities by building and relying on a multidisciplinary team that enables transparency and calculates the risks of financial decisions. For example, hybrid and EV automotive manufacturing CFOs rely heavily on customer-facing teams to better understand buyer behavior in addition to typical FP&A measures. Taking advantage of all available data has given these industry-leading manufacturers, and their CFOs, the confidence to prioritize investments in hybrid vehicles over traditional vehicles and EVs. Collaborating with informed stakeholders across the organization to factor in customer demand, program and social risks, environmental and compliance requirements, and more, empowers CFOs to make the most informed investment strategy decisions. This cross-functional collaboration allows direct traceability of innovation investment and its return on investment (ROI).
As ROI tracking improves throughout the organization, the CFO can better justify each approved investment. More than ever, CFOs are responsible for strategically defining their organization’s risk profile while making a critical impact on short-and-long-term strategy. With these evolving expectations, CFOs no longer consider financial impacts exclusively. More and more, CFOs are asking themselves “How am I impacting the customer experience?” and “How will this influence our brand?” CFOs are evaluated across financial KPIs and customer-centricity metrics, solidifying their broad impact. Increased insight into how investments and strategy decisions resonate with your customers improves the quality of financial models and allows you to identify which actions will retain the most dealers and customers—all while generating the most revenue.
Establishing Traceability to ROI
How should CFOs foster transparency and traceability across the organization? We highlight 5 foundational keys to success:
- Take advantage of cross-enterprise visibility to connect the dots in ways your C-suite partners can’t.
- Employ a balanced approach to financial innovation and managed risk; specifically aligning capital allocation policies to vehicle portfolio performance and strategies.
- Build a blended yet nimble team spanning Strategy, Data & Analytics, Product, Marketing, Technology, Supply Chain, etc.
- Diversify due diligence & benchmarking to extend beyond traditional financial benchmarking and include external entities and industries to drive innovation and fresh thinking.
- Champion collaboration beyond FP&A. Consider taking part in recruiting and onboarding across the company where possible.
CFOs and their partners must balance risk with innovation. Finding that balance relies heavily on belief in your product and investments, a centralized financial function, and commitment to due diligence & benchmarking. From investment in innovative technologies that enhance the driving experience to sustainable practices that minimize your environmental impact, each choice reflects a commitment to delivering unparalleled value to your customers. Invest in and build what your customers want! By championing those investments with a throughline to the customer experience, CFOs go beyond allocating budgets to foster brand advocacy and customer engagement.
Driving Forward
As the connector of business investments to the corporate mission, CFOs must effectively communicate their vision to the rest of the C-suite and broader organization. Showcasing the symbiotic relationship between your financial strategy and customer experience solidifies the purpose of collaboration and alignment across functional areas. CFOs can expand their influence, inspire internal collaboration, and drive organizational transparency while harnessing data-driven financial models to determine their investments. These strategy-and-customer-conscious CFOs are uniquely positioned to propel the automotive industry into a new era of customer-centric excellence.
RELATED SOLUTIONS
RELATED SOLUTIONS
