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What do people mean when they talk about marketing? People speak about it as if they know what it means, but actually, the term means many things to many people.
Is it driving sales? Capturing leads? Yes and no. More leads and more sales are a consequence of good marketing, but sales and lead generation are actually separate business skills.
Marketing is the process of building brand awareness, placing your brand “top-of-mind” within your vertical or niche, to the point that consumers trust your brand and wouldn’t even consider a competitor.
Whereas sales and lead generation can be fairly mechanical processes, this understanding of marketing reveals it to be more subtle. There’s no one-size-fits-all approach to marketing. Each brand needs to approach marketing with fresh eyes—following best practices and tried-and-true methods, but with attention paid to the eccentricities of each brand.
At all stages, you need to be cognizant of the return-on-investment (ROI) of your marketing strategy. Is it driving more revenue than the expense it generates? Or will it in the near future?
Long story short—it’s complicated, and getting it right requires a professional touch.
The “Chief Marketing Officer” (CMO) has joined the CEO, CFO, COO, and CTO in the pantheon of upper management. But because marketing drives a brand forward, experienced CMOs with an excellent track record command steep salaries—and rightly so.
But regardless of how justified the salary might be, it’s more than many startup or medium-sized companies can afford. Remember ROI? Having to compensate another upper-management-level position to increase brand awareness has the potential to erase any ROI created by the execution of an effective marketing strategy, especially for smaller companies. This is particularly true in the short term when cash flow and solvency are real issues.
So what’s the solution? Many startups, small, and medium-sized companies are discovering the benefits of a Fractional CMO—an opportunity to exploit top-shelf marketing expertise for a fraction of the cost of a full-time CMO.
What Is a Fractional CMO and What Do They Do?
A Fractional CMO is a professional Chief Marketing Officer who contracts his/her services to multiple companies. A company might purchase the services of a Fractional CMO for 10, 15, or 20 hours per week, on contracts that may last six months or a year—but longer and shorter contracts are also possible.
The “Fractional” part of the term means that you hire the CMO for a fraction of his/her workday or workweek. During the time the Fractional CMO works for your company, (s)he takes on the responsibilities a full-time CMO would take on in your company. For example, they might:
- Provide Leadership in Sales and Marketing Initiatives. A Fractional CMO is an experienced hand on the wheel of any new marketing and sales strategies. The buck stops with them.
- Align a Growth Plan with the Company’s Vision and Values. Marketing plans succeed when they bolster the brand, including the brand’s mission, vision, and purpose. A Fractional CMO is responsible for incorporating the company’s vision and values into its growth plan.
- Align a Growth Plan with Client Needs, Finances, and Pain Points. The growth plan must reflect only the values and purpose of the company, but also the profile of the prospective clients. A Fractional CMO may perform market research, gathering data about customers and prospects to align the growth plan to their needs.
- Develop a Marketing Strategy. Successful brand growth is never an accident. It comes as a result of executing a sound marketing strategy. Your Fractional CMO draws on extensive marketing experience to devise, test, and execute a strategy that works.
- Develop the Marketing Team. Strategies are important, but they don’t execute themselves. A Fractional CMO can either assemble a marketing team to execute the strategy they help develop, or provide training and development for an existing marketing team to get them in shape, on the same page, and leveled up in the skills needed to execute the strategy.
- Shape and Control Brand Messaging. To align a marketing plan with brand vision and purpose, a company must have its handle on its brand messaging. A Fractional CMO can help the marketing team and principles hone the brand message and incorporate it into the marketing strategy in a coherent way.
- Develop Promotional and Sales Programs. Sales and promotions are only part of a brand growth strategy, but a Fractional CMO may be deeply involved in developing ad creative, promotional strategies, sales scripts, and online prospect funnels.
- Develop Budgets, Forecasts, and Systems of Reporting. A marketing strategy needs a budget and metrics to measure effectiveness and ROI, including its likelihood to stay on budget and adjust in response to new data. Fractional CMOs can establish KPIs and the analytics to track it, as well as formulate a finalized and realistic budget.
What are the Fractional CMO’s qualifications to do all this? Sought-after Fractional CMOs usually have impressive resumes—former CMOs of Fortune 500 companies or alums of marketing teams that achieved significant success. Companies considering hiring a Fractional CMO should not take their qualifications on faith, but should do extensive research into the Fractional CMO’s credentials, experience, and track record.
A Fractional CMO Is Less Expensive Than a Full-Time CMO
If a CMO fulfills such an important function, why only hire one on a fractional basis? Why not commit to a full-time CMO?
Cost is the number one factor stopping companies, especially startups and midsized companies, from hiring a full-time CMO. Payscale.com reports the average full-time CMO salary in the range of $170k, while according to glassdoor.com an experienced, talented CMO can command a salary up to $310k. This is before you even take into account benefits and stock options, which talented CMOs expect.
The unfortunate consequence of this high price tag is that companies that get these in-demand professionals tend to have higher budgets than the up-and-comers for whom a CMO can do the most good.
Fractional chief officers are not a new concept. Fractional CFO and CTO services have existed for years. The Fractional CMO service is an ingenious adaptation of this concept to put professional CMO services within reach (and within the budget) of the companies that need them the most—the companies that stand to benefit the most from an aggressive brand growth strategy.
With a Fractional CMO, you don’t have to commit to the full salary of a CMO, nor the benefits or the stock options. In fact, hiring a Fractional CMO eliminates the expectation of an ongoing relationship—a full-time CMO who will not only command the high salary but continue to incur that salary expense year after year after year.
So how much does a Fractional CMO cost? Standard rates usually fall into the range of $200-$300 per hour.
Suppose the rate is $250 per hour, fifteen hours per week for six months. That adds up to about $90,000, significantly below the salary, stock options, and long-term commitment incurred by hiring a full-time CMO.
It Frees Up Additional Marketing Resources
The CMO’s salary is not the only expense incurred in the execution of a marketing strategy. The strategy itself will almost always entail extra expenses, including but far from limited to:
- Marketing support staff salaries.
- Public relations.
- Direct mail of promotional marketing collateral.
- Influencer fees and commissions.
- SEO expense.
- Paid direct ads.
- Web development for prospect funnels.
Hiring a Fractional CMO may be a way to reduce the expense burden on the budget as a whole. But reducing the expenses on the marketing budget creates an opportunity for that budget to be used in the field much more effectively.
The less you spend compensating a CMO, the more you can spend on marketing expenses that have the potential to move the needle of brand awareness and trust.
This is especially true of digital marketing, especially because many digital marketing strategies can be automated and scaled. Once it’s working, more money can be thrown at digital marketing with an expectation that more money will come back thanks to a stable ROI. This works much better if a huge chunk of the marketing budget isn’t dedicated to an annual CMO compensation package.
By putting marketing budget dollars where they can do the most good, the lower expense of a Fractional CMO makes the marketing budget go farther and produce better results for the brand.
An experienced CMO often makes the difference between members of the marketing team running in different directions, and prevents the company from relying on a hodgepodge of freelancers that can ultimately result in an incoherent… Click To Tweet
You Get Executive-Level Marketing Strategy at a Discount
If your company could get by with just part of a chief marketing officer, could it get by with no chief marketing officer at all? Maybe other members of upper management could direct the strategy and a marketing team execute it?
The truth is, most companies don’t lack for ideas of how to grow their brand. What they lack is leadership and experience. That’s what a CMO brings to the table, and it’s why they are worth their salary or fees.
With a Fractional CMO, those fees are significantly more affordable. For the money, you get experience, organization, and direction from an executive-level expert in marketing. There’s no need for the CEO or COO to try and assume a leadership role over the marketing team that doesn’t fit well—instead, the team gets the direction it needs, when it needs it.
An experienced CMO often makes the difference between members of the marketing team running in different directions, and prevents the company from relying on a hodgepodge of freelancers that can ultimately result in an incoherent strategy.
In a marketplace where brand voice and purpose is everything, marketing is not something to take lightly. It needs and deserves executive-level attention, at least at the outset. Fractional CMO services allow more small and mid-sized companies access to that kind of executive-level attention.
It Gives Your Company Increased Financial Flexibility
One of the biggest financial challenges of taking on a full-time CMO is the expectation that the CMO will stay on the payroll for years to come. CMOs don’t want to change jobs every year—they want a commitment and job security for the long term.
The problem with this math is that a CMO does the most good early in the tenure, when the strategy is being devised and implemented. Once a working strategy is in place—which usually takes between six months and a year—the strategy can often be managed below the executive level.
Choosing a Fractional CMO instead of a full-time CMO frees up cash and human resources to execute the marketing strategy efficiently or to devote to other operations. Rather than placing a giant, persistent black hole at the center of your ongoing marketing efforts, you frontload the expenses of executive development of the marketing team.
CMO services may only be needed early in the planning and strategy phases of the marketing effort. Once the plan is up and running, a sub-executive marketing staff can take the reins.
That’s between $170k and $350k of ongoing expenses you freed up for other financial and operational priorities.
Marketing is the process of increasing brand awareness and brand trust. It is a delicate operation. No two companies can follow the same playbook in exactly the same way and expect identical results. It is both an art and a science at the same time.
No successful marketing succeeds flying by the seat of its pants—yet many startups and mid-sized companies choose this approach, trusting a pillar of their success to minimally-directed marketing teams with leadership from an executive who is even less qualified than the underlings.
The bottom line is that every brand with an ambition to grow could use the experience, direction, and marketing acumen of a qualified CMO. But whereas a full-time CMO is prohibitively expensive for many companies, Fractional CMO services put this function within the budget of many more companies by:
- Cutting costs.
- Freeing up additional marketing resources.
- Giving your company increased financial flexibility.
- Leveraging executive-level marketing strategy.
Marketing is all about ROI—getting something for what you spend. There are a million ways to save and cut back, but if your marketing campaign does not succeed, no amount of savings makes it worth it. By trusting your strategy, execution, and brand messaging to a skilled Fractional CMO, you increase the chances of success—and gaining a robust ROI that more than justifies the fees paid to the Fractional CMO.