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Vonage In The News
Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2013 Results

Carolyn Katz Elected to Board of Directors of Vonage Holdings Corp.


Vonage Customer Reviews
Vonage vs. Time Warner Cable SoCal
Vonage vs. Time Warner Cable SoCal

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Vonage, a VT2142 and a RTP300, My Experiences - A Detailed Review
Vonage, a VT2142 and a RTP300, My Experiences - A Detailed Review

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Salt Lake City: impressions after several months

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Get Your Marketing Budget & Tests Approved

Vonage In Print News

How To Get Your Marketing Budget & Tests Approved By The CFO

April 14, 2004

By Staff

Over the past six months, nearly every marketer we've interviewed in about their career has bought up the same exact point, "You have to have a solid relationship with your CFO to get ahead."

Great, so how do you do that? We contacted a CFO to ask him.

“We have a very interesting relationship, we work on it every day,” says Vonage CFO John Rego of the company’s CMO, Dean Harris. “Dean sits close to me, he can scoot over any time and ask a question.”

Data that keeps your CFO happy

Because Vonage is in a growth phase, “We spend a lot of money on marketing,” says Rego. “I watch every penny that comes in and goes out.”

However, “I don’t want to be enmeshed in data,” Rego says. When a new campaign is in the works, he simply wants to know what it will cost to acquire a customer using the new method.

So, Rego asks for just three pieces of information from marketers, “What’s the budget, what did we say we’re going to do, what did we actually do.”

Along with the CMO, he tracks customer acquisition cost trends on a weekly basis. “We talk a lot about our little friend called churn,” Rego says.

He also sits down with all department heads on a weekly basis to look at the ongoing relationships: how is marketing interacting with customer care, sales, legal, and the actual marketers who do the work? “In case marketing wasn’t talking to customer care we can find that out,” he says.

A large part of Vonage's ads are online. “We can get an amazing amount of statistical data,” Rego says. “How many people clicked, how much time did they spend, who came to the ad, who liked the ad. We nail it down to a disgusting level of detail.”

Each month starts a new cycle, offering a chance to change the specific ads and where they run. From the ads, he knows what it costs to buy a customer, “so yeah, we like the CPA advertising.”

While Rego admits creativity is an important asset for a marketer, “they have to have business savvy as well. Dean is especially good. He owned and operated his own business, an ad agency, for years. He understands the CFO perspective of controlling costs.”

On Budgeting

Rego knows that if his company spends more on marketing, they’re going to get more customers. “Marketing is the most significant spender of the company, so they’re the most significant cost of the plan,” he says.

Some organizations set the bar unrealistically high, expecting marketers to fail, and when they don’t reach their inflated goals, the company isn’t disappointed. “We don’t do that. It’s not based on pie-in-the-sky stuff, it’s based on stuff they can actually do.”

In other words, he doesn’t want to see an over-inflated budget.

It doesn’t bother Rego that marketing plans these days can change on a monthly basis. In fact, it’s a benefit. “Each month Dean’s group is challenged with retooling the advertising. We know with a great level of specificity how much the CMO will spend this year. That’s inflexible.”

What’s flexible are the tactics the budget is spent on. “But we’ll track and make sure he’s keeping it within the confines of the budget.”

As long as Harris stays within the budget and keeps to “X dollars per new customer,” Rego is happy. “The thing that impacts that greatly is churn,” he acknowledges, and that’s what Harris has to watch out for.

How to get more marketing staff in the budget

What can you do to convince your CFO to budget more for salaries? “Nothing,” Rego jokes. “It’s market driven.”
Just now, when we’re coming out of a “pretty abysmal” job market, Rego says, it’s useful to know what the industry is paying for specific jobs, and what those job descriptions look like. In fact, “We’re in the throes of doing an RFP to do a formalized grading study to find out what the industry is paying a marketing associate with a title of manager, for example.”

But if you really want heavy hitters, you need to offer perks. Stock is the obvious option for a start-up, he says. But CFOs might be willing to negotiate for things that are small financially to the company but are important to employees, such as a couple of extra vacation days.

For example, Vonage has a hot lunch catered every day for all employees, varying from Italian to Chinese.

“We’re in an industrial area of New Jersey, and there’s not a lot to choose from,” Rego says. Plus, as a tech company he employs a lot of kids in their mid-20s. “For many of them, lunch is their chief meal, so we feed them well.”

It’s a nice benefit that makes employees happy. And how does that fly with a CFO focused on every penny spent? It’s not a huge deal, because “it isn’t that expensive when you’re doing it in bulk. Plus, it keeps employees in the building so you don’t lose them for an hour a day.”

CFOs can help you negotiate with marketing vendors and agencies to get the best contract possible. “It’s up to Dean to tell me the top two or three ad placement agencies, but once we know who they are we work closely together to make sure it’s a good contract.”

On CFO pet peeves

While Rego dislikes being given “bizarre, unmeetable budgets,” his biggest pet peeve is running into functional silos.

“This can start happening in companies that are getting big. You can’t get anything done, because if you want to work with marketing, you get a table of 50 people,” he says.

As a CFO, he says, he just wants people to stay focused on the cost and keep it simple: “What does it cost to get the customer, what does it cost to keep the customer.”

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