As a startup CFO, you do need to think beyond the traditional finance role and instead focus on the business performance as a whole, including the commercial funnel.

By using sales and marketing principles, you can add value to strategy-setting, budgeting, and fundraising.

Understanding the Sales and Marketing Funnel

The sales funnel (or commercial funnel) is a visual representation of a customer’s journey from awareness to becoming a paying customer.

Each stage—Awareness, Interest, Decision, Action—represents how customers interact with your business.

For a startup CFO, understanding this funnel helps in forecasting revenue, identifying bottlenecks, and aligning financial resources to growth areas.

For example, if the majority of prospects are dropping off at the "Interest" stage, you can challenge the team to allocate resources towards better lead nurturing and predict its impact on revenue.

Here are reasons as to why CFOs Should Think Like Marketers

• Strategic Leadership: A strong understanding of the commercial funnel helps CFOs become proactive leaders, enabling cross-department collaboration.
  
  For instance, by evaluating customer acquisition costs (CAC) or lifetime value (LTV), you can guide the team on better allocating marketing and sales spend.  (see article on CAC and LTV here)

• Fundraising Preparation: Investors often ask about your customer journey metrics during fundraising.
  
  Being able to discuss your commercial funnel in detail will demonstrate your understanding of revenue generation, scalability, and profitability.

• Budgeting for Growth: The funnel offers clear insights for forecasting.
  
  For example, if your "Interest to Decision" conversion rate is 50%, and you plan to increase awareness by 20%, you can predict how much revenue that new awareness might yield.

Tips for CFOs to Leverage the Funnel:

1. Collaborate with Sales and Marketing Teams: Understand how prospects move through each stage of the funnel and identify where financial investments could yield the highest returns.
2. Track KPIs: Focus on metrics like CAC, LTV, churn rate, and conversion rates to make data-driven decisions.
3. Scenario Planning: Use funnel data to model financial projections, identify risks, and prepare for various growth scenarios.
4. Support Fundraising: Demonstrate how your funnel strategies contribute to scaling the business—a crucial point for investors.

By embracing the commercial funnel and understanding the details of it within your comapny, you can position yourself as a strategic CFO in your startup, driving better decision-making and preparing the business for sustainable growth.

For more insights on leadership skills and how to evolve as a startup CFO, check out my Financial Leadership Fundamentals course. It’s designed to help finance leaders thrive in the dynamic startup environment.

If you want to make your finance career progress easier & faster, follow the steps via our Framework below:

1. Sign up to our next workshop.
2. Work with me in the Financial Leadership Foundations course  that includes monthly Q&A sessions where we can discuss all of your questions and how to apply your learnings to your current role. 
3. Download the Advanced Management accounts course to showcase your skills as a finance leader to the Founder, leadership team and the Board.
4. Book at FLF Career Planning session.