15 Actionable Ways To Improve Free Cash Flow Through Marketing

If cash flow is king, Free Cash Flow (FCF) is emperor...
especially during economic downturns.

Here's what this prized metric is all about, why investors and boards love it, and how marketers can directly influence it.

FCF refers to how much money a company has left over after it has paid for everything it needs to continue operating - including capital, payroll, taxes, and depreciation, unlike EBITDA.

A high FCF is a sign a company is in good financial shape, eliminating its debt, and can fund its future growth, all the things that are sought after during a downturn.

(One reason investors think of Apple stock as a safe bet is because it has the highest FCF of any public company at a whopping $111.44 billion)

With that said, here's what marketers can do to improve FCF during times of inflation:
1. Increase sales, by improving:
a) customer acquisition (increase market share, launch new products, launch in new markets, and launch new products in new markets)
b) customer retention (optimise RFM i.e. recency, frequency and monetary, NPS i.e. Net Promoter Score and brand awareness)
2. Reduce expenses
a) Cull investment in non-essential channel/tech/software
b) Outsource if it can be done overseas
c) Reduce inventory levels of products
d) Get discounts by paying early
e) Extend payment terms of payables
f) Leverage grants like Google Ads Grants if you're a non-profit to save money on ads
3. Improve ROMI (Return on Marketing Investment) and efficiency
a) Prioritise marketing projects with the highest ROI (balance short-term with long-term)
b) Prioritise channel budget allocation based on ROI (see below)
c) Reduce CAC/improve ROAS (reduce wastage and optimise performance)
d) Automate tasks/processes/workflows
4. Improve marketing measurement to improve budget allocation
a) Employ Market Mix Modelling and Commercial Analytics to understand the real impact of marketing activities and channels
b) Run Brand Lift studies to understand the cost per lifted user for a channel across all funnel layers
c) Get a single view of a customer through a CRM/CDP
d) Deploy server-side tracking to improve conversion attribution