How Do Businesses Determine the Value of FCMO Services?
A fractional chief marketing officer (FCMO) develops and oversees marketing strategies, leads teams, builds road maps, and more. They offer priceless support by increasing engagement, driving sales, and boosting revenue, but how do businesses determine the value of FCMO services? How do they know whether they are getting their money’s worth?
This guide walks you through the following ways to determine the value of FCMO services:
- Check for recognition and brand awareness.
- Track sales.
- Compute return on investment (ROI).
- Monitor in-house marketing team performance.
- Find out whether you have more time for core business activities.
An experienced San Francisco fractional CMO offers this value and more. Let’s go!
Wondering what a Fractional CMO can do for your business? Watch this video below.
Check for Recognition and Brand Awareness
A fractional CMO assists businesses in developing a comprehensive marketing strategy tailored to their client's target audience, especially in increasing brand visibility. That means changes in brand recognition and awareness are one indicator of the value of their service.
FCMOs also improve recognition and brand awareness of local businesses. A San Francisco winery can use the services of an FCMO to enhance awareness of their products. A fractional CMO will analyze current engagement, traffic and mentions in social media and other customer touchpoints to determine how to best do this.
From their assessment they can develop more effective campaign strategies to boost the local winery’s visibility online. To determine whether positive changes in brand recognition and awareness exist,
- Conduct surveys or market research to determine changes in brand awareness.
- Monitor brand recall and association to assess brand awareness efforts.
- Monitor social media engagement metrics such as likes, comments, shares, and mentions.
- Analyze website traffic, including unique visitors, page views, and time spent.
- Track the number of brand-related searches on search engines.
- Keep track of media mentions, press releases, and online coverage of your brand.
- Compare the brand's mentions and discussions to those of your competitors.
- Track customer referrals, recommendations, and testimonials.
In essence, as a result of a fractional CMO's work, sales should increase. If the FCMO optimizes the conversion funnel and implements marketing strategies effectively, an upward trend should be apparent in the clients’ sales and revenue.
You know the FCMO is giving value for your money when you see the following trends:
- Growing revenue: Track monthly, quarterly, or annual revenue.
- Increasing number of products or services sold: Track the total number of products and services sold in a given time frame.
- Rising average order value (AOV): A higher AOV means customers pay more per purchase; get this value by dividing the total revenue by the number of orders.
- Increasing conversion rate: Customer acquisition efforts are effective when conversion rates are high; monitor the percentage of leads who convert into paying customers.
- Decreasing customer acquisition costs (CAC): When CAC decreases over time while sales increase, customer acquisition efforts are efficient.
- Higher repeat customer rate: A higher rate suggests customer satisfaction and loyalty.
Do not just look at the overall data. Analyze the performance at each stage in the sales funnel and across channels (e.g., online, retail, or distribution partners) to identify necessary improvements.
Compute Return on Investment (ROI)
Following the reasoning that good marketing brings in sales, a fractional CMO should be helping improve ROI. Get a good picture of the value the FCMO brings in terms of ROI with the following:
- Calculate ROI using the formula [(Net Profit/Cost of Investment) x 100], where Net Profit is the gain or benefit generated from an investment and the Cost of Investment is the total investment cost, including expenses and resources utilized.
- Calculate the net profit by subtracting any costs or expenses from the investment's direct financial gain, such as increased revenue, cost savings, or efficiencies.
- Assess the investment's total cost, including initial investment, operating costs, marketing costs, and ongoing maintenance and support.
- Use the ROI formula to calculate the ratio and express it as a percentage. A positive ROI indicates a profitable investment, while a negative ROI suggests a loss.
- Determine the time frame for evaluating ROI: short-term investments can yield quicker returns, while long-term investments can require a more extended evaluation.
- Compare ROI to industry standards or benchmarks to assess how well your investment performs relative to similar businesses or market expectations.
Monitoring In-House Marketing Team Performance
The fractional CMO also brings value to their clients’ in-house teams by helping enhance their performance. Thus, monitoring the progress of the teams helps determine the value of an FCMO to the in-house team.
Measuring the performance of an in-house marketing team involves assessing various aspects of their activities and outcomes. Here are some ways to do it:
- Define specific goals and objectives, including metrics such as lead generation, customer acquisition, revenue growth, brand awareness, or campaign performance.
- Identify relevant key performance indicators that reflect the team's performance and progress, including website traffic, conversion rates, customer engagement, marketing qualified leads, and ROI.
- Implement a reporting system to track and measure key metrics regularly.
- Collect data from various sources, such as analytics tools, customer relationship management (CRM) systems, and campaign tracking.
- Conduct performance reviews for individual team members to evaluate their contributions and achievements.
- Assess the team's collaboration and teamwork dynamics by considering communication effectiveness, cross-functional cooperation, and the ability to meet deadlines.
Find Out Whether You Have More Time for Core Business Activities
More than anything else, with a fractional CMO at the helm of a business’s marketing strategies, business owners should be able to focus more on core business activities. They should be able to rest assured that their marketing initiatives are in good hands.
Having more time to focus on their business is critical for local companies. As per our example earlier, a San Francisco winery can concentrate on improving their products, customer service and day-to-day business operations knowing an expert CMO can help them with their marketing strategies.
Ultimately, when business owners are able to free their hands of marketing activities, explore new business opportunities, venture into product or service development, or focus on other core business aspects, then the FCMO must properly be doing their work.
Hiring a fractional CMO should lead to increased recognition and brand awareness, higher sales, improved ROI, and better marketing team performance. Businesses should monitor business metrics (e.g., ROI, sales), their in-house teams’ performance, and even their ability to focus on core business activities to determine the value of the FCMO services.
Big or small businesses can benefit from an FCMO's expertise. If you're considering hiring a San Francisco fractional CMO, learn how to find value in their services. Contact Digital Authority Partners for expert FCMO services.
Want To Meet Our Expert Team?
Book a meeting directly here