Why Fractional CMOs Are Attractive to a Mid-Size Business
Hiring a full-time Chief Marketing Officer (CMO) can be quite expensive. If you are a mid-size company, you might not even need a full-time CMO — the ROI is simply too small in relation to the proportion of your income such a hefty expense incurs. That is exactly why it makes good sense to hire a fractional CMO.
When you bring in a fractional CMO, you get organizational leadership, expertise, and executive-grade insights without a full-time chief marketing officer's risk, commitment, and cost. This is all about smart growth and maintaining a lean marketing vehicle for small and medium-sized businesses and practices, especially when marketing medical practices and legal firms. Is it the right time for your company to hire a fractional CMO?
Wondering what a Fractional CMO can do for your business? Watch this video below.
In this post, we will explain five clear signs a fractional CMO could benefit your mid-size business.
What Is a Fractional CMO? What Role Does One Play in a Mid-Size Business?
A full-time CMO is expensive and doesn’t make sense for all organizations, particularly for small-to-mid-sized enterprises (SMEs). These are usually fast-growing companies that need senior leadership in multiple areas but don’t have the budget to hire C-level executives full-time.
Many mid-sized businesses, for instance, are usually on the cusp of major growth and need a tried-and-true leader to provide vision and direct their marketing teams. They want more than just a team supervisor or manager. A forward-moving mid-size company needs a strong, experienced, and vision-centric marketing leader. That’s exactly what a fractional CMO contributes to these companies.
A fractional CMO offers mid-size companies the senior leadership their marketing needs for a fraction of the cost of a full-time hire. Basically, they bear all the responsibility and do all the same things a traditional full-time CMO would, but the company doesn’t have to pay full price. So, it’s a cost-effective way to bring a senior marketing leader to the table.
This option is truly a game-changer for medium-level enterprises going up against well-established, large companies, most of which have ceiling-less marketing budgets. You could say a fractional CMO is a ‘marketing equalizer.’
Just like a full-time CMO, a fractional chief marketing officer is a full member of the senior management team. Unlike a full-time CMO who must be trained and onboarded, they hit the ground running, helping to supercharge your marketing and sales department.
As a C-level executives, fractional CMOs are charged with oversight and development of strategic and business growth-focused marketing for the company. They ensure that the company’s marketing plan, strategy, and implementation are on target, cohesive, and data-informed.
Like a full-time chief marketing officer, they are responsible for marketing budget creation, driving sales development, and fueling customer acquisition, all of which are aimed at accelerating company growth. With a fractional CMO you get the level of senior marketing leadership your company requires, but without incurring the costs often associated with a full-time CMO.
1. Fractional CMOs Can Be More Budget-Friendly for a Mid-Size Business
For a mid-size business, the cost-saving potential is perhaps the biggest and most important benefit of hiring a fractional CMO. Recruiting, training, and onboarding a CMO can be quite an expensive proposition, as is the salary CMOs tend to draw. A full-time CMO takes home an average annual salary of well over $174K, and that's not including commission and bonus benefits that can add more than $85K per year, bringing the total to around $260K.
These figures come from Glassdoor, the world’s largest job, and recruiting platform; other sites believe that this salary+benefits figure could be in the neighborhood of $341K. According to a 2017 CNBC report, some of the highest paid CMOs receive an average of $1.3 million, with the market’s crème de la crème taking home more than $16 million.
No matter how you look at it, these are not the kind of marketing executive dollars mid-size companies can marshal. Many of these companies are already wrestling with budgetary constraints and other financial challenges, such as unpredictable cash flow, taxing debt repayment, inability to secure funding, and taxes, to cite a few examples. On top of that, they must also overcome challenges like balancing growth and quality, all while battling fatigue, client dependence, and productivity issues.
Fortune 500 companies normally spend around 2-5% of their revenue on marketing and sales development; the proportion can be as high as 20% for the majority of mid-size businesses. They simply don’t have much in the way of budgetary breathing room that can enable them to bring in a full-time chief marketing officer.
Thankfully, hiring a fractional CMO is an incredibly cost-effective alternative. When you hire one, a fractional CMO will not only deliver executive-level marketing guidance but will also do so at limited cost. According to recent research from Digital Authority Partners, the average hourly cost of working with a fractional CMO ranges between $200 and $250 — that’s pretty reasonable for any SME.
2. A Fractional CMO Can Efficiently Expand Your Marketing Capacity
As we have established, setting up a full-fledged marketing department complete with a full-time CMO at the helm can be a very expensive proposition. For this reason, SMEs often wonder if it’s worth the investment or can they ditch the idea altogether.
Despite the cost, no company can completely ignore the importance of marketing leadership. You need high-level, visionary leadership in your marketing team. This person should be a well-trained, highly experienced, and business growth-driven leader who is not afraid to make hard decisions and get things done.
This is especially true because the business world is fast-evolving in the face of policy changes, technological advancements, and shifts in best practices. As digital marketing becomes more popular and widespread, most mid-size businesses find themselves competing against companies of various sizes, including the world’s biggest market players.
Moreover, consumers have become more wary of marketing and are more savvy than ever before because they’re bombarded with advertisements from both offline and online sources. In light of this, you need not only an eclectic and efficient marketing team but also want one that is skilled and diverse enough to take on all potential competitors. More importantly, your marketing capacity, execution, and strategy have to be more cohesive and on target than ever.
Lucky for you, a fractional CMO can help fill any gaps and push your marketing efforts into a higher gear. This way, they efficiently help expand your marketing capacity. They will do it on your budget and your schedule, providing your marketing team with the flexibility it needs to successfully sell your company’s services or products.
If you make sure that you get an expert fractional CMO that’s a good cultural fit for your company, you will most likely save money while getting the senior leadership your marketing requires. And there are several ways the savings could be dedicated to other marketing pursuits:
Invest in new technology and tools for future marketing – With the marketing dollars you save by ditching a costly full-time CMO, you can purchase tools that make your digital marketing easier and more hassle-free to strategize and execute.
For example, you can put some of that savings into tech services or products that help make stunning marketing imagery or create high-quality, interactive, and useful videos. Video is now responsible for more than 80 percent of internet traffic, per Cisco Annual Internet Report.
Or, perhaps your company would prefer to purchase a software product or service that can help streamline your task management, so you can redefine and retune your marketing processes.
Invest in a more actionable SEO strategy – the search engine optimization landscape is always evolving, and it pays to stay on top of the latest best practices and tactics. For instance, you can focus some of the savings on local SEO if your company operates physical brick-and-mortar stores, voice search optimization to tab into increasingly popular smart speakers or refine your social media/content marketing strategy.
Run contests – User-generated content (e.g., customer videos, posts, etc.) are inexpensive, need minimal effort, and don’t take much of your time. It’s the holy grail of content marketing, but you need to entice your audience to generate content for you, which is where contests come in handy. You can use part of the savings to buy freebies and other giveaways for your contests on Instagram, website, Facebook, and other social platforms.
You can also revamp your email marketing, polish your customer service, or expand your referral network. The list of marketing opportunities you can take advantage of with the savings is simply unlimited.
3. You Still Get Executive-Level Marketing Strategy
With a fractional CMO on board, you have a dedicated person envisioning and guiding your marketing strategy at a high level. This is a senior leader who can focus on not only improving sales but also company development and growth-driven marketing. It’s all about aligning all marketing efforts with the company’s bottom-line and the big picture.
This is extremely important for mid-size companies that have grown and require a visionary leader who can direct their marketing efforts for the next stage of development. A fractional CMO will draw a clear marketing roadmap, making use of company strengths and opportunities to propel its growth. They will help redraw your budgets and marketing strategy, ultimately giving a well-defined attack plan, for the short-term and/or the long haul.
High-level branding: Creating a respectable brand is everything in an increasingly digital era. But building a brand isn’t a one-and-done situation. You need an experienced leader to bring consistency, direction, and credibility to your branding efforts. That’s exactly what a trustworthy fractional CMO brings to the table.
Centralized marketing: Nothing fails a SME quite like a disoriented marketing department. Everyone — from social media managers, content creators, and salespeople to SEO pros and other team members — must read from the same script. Disorganization usually arises from a lack of oversight and authority.
Fractional CMOs work just like any other chief marketing officer. They provide executive-level leadership that will bring all teams – including branding, sales, and marketing teams – together. This way, everyone will be on the same page, and the marketing ship will sail smoothly forward.
Highlight marketing strengths and weaknesses: Sometimes you can feel that something is wrong with your marketing but you can’t seem to put a finger on it. It may be your campaigns, your execution, or outdated strategies. A high-level leader can determine and harness these weaknesses as well as reinforce existing strengths for the betterment of the company.
Unfortunately, affording this knowledge isn’t always possible for mid-size businesses on a full-time basis, making hiring a fractional CMO a no-brainer decision.
4. Financial Flexibility Is Critical for a Mid-Size Business
It’s not uncommon for mid-size businesses to test the water before investing in a costly endeavor. In most cases, the company is on the verge of being taken to the next level but the owner or managers aren’t sure that what they’ve done before will actually take the business successfully into the future.
For instance, you may want to explore other markets or expand your product line-up. Or, maybe you want to increase production by collaborating with overseas partners. Some mid-size businesses may want to redefine their brands to position themselves for the next stage.
No matter the reason, overleveraging your business can be a recipe for disaster. Hiring a full-time CMO just because the business growth and revenues are on the upward trend is one example of how you can ruin the financial flexibility of your business.
A fractional CMO, on the other hand, brings more human resources and financial flexibility. You can choose to work on a long-term, part-time basis or a full-time yet short-term schedule. You can pick 5, 10, 20, 40, or more hours of consultative work – the ball is squarely in your court.
This kind of financial flexibility means less volatility when it comes to your marketing budget. More crucially, this gives you the ability to evolve, pivot, and adapt accordingly with relative ease. There is far less financial worry, risk, and friction involved in the process. In many ways, your company can achieve more with the help of a fractional CMO.
5. A Fractional CMO Is a Low-Commitment Path to a Fresh Perspective
Are you pumping more money into marketing without seeing tangible results? Sometimes your existing strategies or internal biases are to blame for your marketing stagnation. As a business owner, you may sense something is amiss with your current marketing but you cannot seem to pinpoint the causative issue.
With cut-throat competition in the digital marketing space, bad things can happen when you continue business as usual. A set of fresh, outside eyes can help you fish out marketing problems and stage the way forward.
It so happens that hiring a fractional CMO is a low-risk and low-commitment path to a fresh perspective, which can be extremely helpful for your company from a strategic standpoint. Here’s how.
No-bias, no-emotion marketing leadership: Generally, an outside executive comes blind to your company’s processes and goals. That is an awesome gift!. Without prior contact with your team, A fractional CMO has not had time to develop internal biases and preferences.
A breath of fresh ideas: Every marketing strategy needs new, fresh ideas on an ongoing basis, which is where an ‘external CMO’ comes in handy.
Helps drive growth: Whether you need to drive sales, marketing, or overall business growth, you often need a new perspective to get it done. Growth calls for fundamental changes to a “business as usual” mindset, according to The Guardian.
Apply best practices from other companies: a fractional CMO will bring fresh techniques and ideas that have been proven to work at other organizations. Often good ideas within firms are not converted into actionable strategies simply because they are untested. A part-time CMO has a broad range of experience from which to draw, giving you a fresh start over and over again.
Working with a fractional CMO is a smart move for any size company, but especially for mid-size businesses. For them, hiring a full-time CMO is not only financially unfeasible but also doesn’t make sense both in the short-term and long-term.
A fractional CMO makes the most sense for mid-size because:
- They are cost-effective for a business of this type
- They can expand marketing capacity efficiently and smoothly
- They offer financial and human resources flexibility
- They provide a fresh perspective without the commitment or risk of hiring a full-time hire
When all is said and done, a mid-size business will get C-level marketing leadership and strategy, without the cost-burden of a full-time chief marketing officer. It’s a double win. Contact us today for a paramount CMO Service provider.
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