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A new year brings new goals for businesses. Some businesses want to create new revenue streams while others will commit to reducing turnover or hiring new employees. One area of business that is high on many companies’ lists of New Year’s resolutions is marketing.
Many companies want to do more marketing, better marketing, more modern marketing or see more return on their marketing dollars spent in 2021. No matter what your marketing goal is this year, success comes from the top and from the messages it sends.
This is why it is so important to have a Chief Marketing Officer, someone who knows today’s marketing landscape and can execute marketing programs that drive leads, conversions, and, ultimately, sales. A solid CMO creates a full-scale marketing plan, tracks the results, and delivers a high ROI for your marketing dollars.
The problem is, a full-time CMO isn’t attainable or doesn’t make sense for a lot of companies for a variety of reasons. That is where a fractional CMO comes in. A fractional CMO is a marketing professional you can hire for your company to perform the duties of a traditional CMO.
Instead of being a full-time, highly paid employee though, a fractional CMO has multiple clients and works part-time for each. They provide a portion of their time and all their expertise to your company for a fraction of what a full-time CMO would cost.
If a fractional CMO sounds like a concept that may interest your company in 2021, you’ve come to the right place. We’ll explain ways that a fractional CMO can benefit your business in the coming year. Here are the reasons to hire a fractional CMO in 2021.
What is a Fractional CMO and what do they do?
A fractional CMO is an experienced, results-driven marketing executive that you can hire for your business. These executives usually have years of experience and are experts in the field of marketing. They carry out all the duties that a full-time CMO would for your company without drawing the huge yearly salary that traditional CMOs do--because they work on a contractual or part-time basis for you.
Fractional CMOs are a concept that is growing in popularity. As marketing becomes more complex and time-consuming, leaders are increasingly facing a difficult choice when it comes to this important business function. Do they outsource their marketing completely? Do they hand marketing off to an executive with little to no experience or talent in the field? Or, do they bring on a talented executive for a six-figure or more salary?
For many companies, none of these choices are ideal. Outsourcing gives away too much control; assigning marketing to an inexperienced exec is a waste of money and resources; and plenty of companies cannot afford--especially now--to add another huge salary to the payroll. This is why more and more businesses are deciding that hiring a fractional CMO makes the most sense.
When a business hires a fractional CMO, there is a wide range of functions that they can provide for a company. Depending on the company’s needs and the CMO’s time commitment and area of expertise, these functions can vary greatly but can include all of the responsibilities a full-fledged CMO would provide.
A CMO's duties for a company can include things like defining a marketing strategy, putting together a marketing plan and budget, conducting market research, managing a marketing team, setting up marketing KPIs, scaling online lead conversion, and so much more.
When you hire a fractional CMO, they come equipped with a toolbox of marketing tricks that can get your company’s marketing to where it needs to be and deliver the ROI you are looking for from your marketing investment. In addition, there are a few more specific reasons companies are loving fractional CMOs in 2020. Here are four big reasons.
Reason 1: It Will Save Your Company Money
There are many signs that your company needs a fractional CMO but the biggest one for most companies is that hiring one saves money. Obviously, all companies want to save money but for certain companies, saving money is a necessity.
Newer companies, growing companies, or boutique operations face obvious budgetary constraints that other companies don’t. No matter what size company you have, though, the need for a seasoned marketing professional to guide your marketing efforts remains the same.
According to Glassdoor, CMOs make between $73,000 and $306,000 a year with the average CMO in the U.S. making $174,371. No matter where your city, industry, and candidate falls within that spectrum, that’s a big add to payroll. While it may be worth it for some companies to add an employee at this salary level, for many companies, it is either not worth it or not possible given their budget constraints.
By comparison, the average fractional CMO usually charges companies between $200 and $250 an hour for their services. This can be huge cost savings in salary alone and the difference gets even bigger when you add in other full-time employee costs, such as health insurance, 401k matching, bonuses, perks, and payroll taxes.
This is the single biggest reason that fractional CMOs have become so popular. The role fulfills a company’s marketing guru need in a cost-effective way while enhancing revenue because your marketing initiatives are run by an experienced pro and not someone whose talents lie elsewhere.
Reason 2: It Frees Up Marketing Resources for Other Things
Reason number two to hire a fractional CMO in 2021 is directly related to reason number one. Once you have saved money and put your marketing in the hands of a true marketing professional, you’ve freed resources to dedicate to other, equally important aspects of your business.
If someone in your organization is running your marketing operation but is not a marketing professional by trade, that is an inefficient allocation of resources--even if that person is the CEO. Chances are, that person rose to their position by demonstrating skills in some area of business outside of marketing, but marketing is now taking up a good chunk of their time.
In addition, if marketing responsibility is dispersed within the organization to, for example, your sales team, that is inefficient too. Executives should focus on leading and managing their chosen business function and sales teams should ALWAYS be fully focused on making sales. A fractional CMO allows you to better allocate your human capital resources and let them focus on what they do best.
Now, back to the cost of a CMO. You can spend the money you save on a fractional CMO versus a full-time CMO in any area of your business you choose. But you’ll find the greatest efficiency in investing those saved dollars in actual marketing execution rather than in a full-time hire to run your marketing.
The possibility of what marketing initiatives you can spend your savings on is seemingly endless. You can optimize your website, boost your SEO online, or create more content for content marketing. You can invest in vehicles and staff for field marketing, buy traditional or online advertising, or create more email or direct mail campaigns.
The added bonus to saving money on a fractional CMO and using it on marketing pursuits is that you also will have access to a marketing professional who can guide these expenditures and make sure you are using the money correctly to produce an ROI that helps your bottom line.
Reason 3: You Still Reap the Benefits of Executive-Level Marketing Strategy
Back in the day, marketing strategy was relatively easy. You created some brochures, sent out some mailers, maybe paid for a commercial or an ad in the paper, and called it a day. In 2021, doing marketing effectively takes as much, if not more, complex strategy and know-how than pretty much any other function in the organization.
Good marketing starts with analyzing consumer data and conducting in-depth consumer research. It continues with a marketing mix of online and offline strategies to reach your core consumer, wherever they are. From there, money must be allocated, the right people must be hired and managed, and KPIs must be decided on. Once the plan is executed, the results must be analyzed and constant improvement must be made to maximize ROI.
This is no longer territory a sales manager can successfully navigate in their spare time. To reap the benefits that a modern marketing plan can have for your business, you need someone who is well-schooled in both the art and science of marketing, someone who has experience in different elements of modern marketing, and can decide which work best for your businesses’ needs.
This person must eat, sleep, and breathe marketing. If your company can’t pay for or doesn’t have the need for a full-time CMO, a fractional CMO is a perfect answer to provide your company with the right high-level guidance you need to make your marketing more profitable for your company.
Reason 4: It Gives Your Company More Flexibility for the Future
Many companies hire a fractional CMO because it makes sense in the moment. Due to the company’s budget or current marketing needs, a full-time CMO is too costly, but company leadership still sees the benefit of bringing in an executive-level marketing person to get the most out of the company’s marketing dollars.
While this can be a good thing for your company’s present situation, it also offers much more flexibility going forward. This future flexibility is something that every company should not only want but actively consider when making any decision.
When you commit to a full-time CMO, you are tying up a large amount of money for a long time. You are also committing to a single person and their strategy, their personality, their personal career goals, and more for a long time as well.
We discussed above the wide array of marketing initiatives you can reallocate these savings to, but having increased cash on hand because you have a fractional CMO offers you a lot of flexibility. It allows you to increase inventory if the marketing initiatives a fractional CMO implements go incredibly well, or you can be prepared to jump on a new opportunity in some other aspect of your business.
As a new, growing, or small business, hiring the right person who fits with your corporate culture and meshes well with your long-term goals is critical. Hiring a fractional CMO allows you to test different people, different ideas, and different styles to see what you need in a marketing leader.
You may try out a few different people to find the right fit, change fractional CMOs as your needs change, or end up hiring your fractional CMO down the line because they become an integral part of your company and you’ve grown to a point where it makes sense. No matter what path you take with a fractional CMO, this arrangement gives companies so much more flexibility than hiring a traditional, full-time executive for usually a fraction of the cost of a full time CMO.
In 2021, there are many reasons you may hire a fractional CMO. It may be because it saves you money or frees up resources for other areas. It may be because you want to reap the benefits of a high-level marketing strategy or you want to give your business ultimate flexibility for the future. Regardless of the specific reason, a fractional CMO makes a lot of sense for a lot of companies.
If your company doesn’t currently have a full-time CMO but you see the benefits of having a true marketing professional lead your marketing initiatives, a fractional CMO is worth investigating. In most cities, you can find great professional services agencies, like Digital Authority Partners in Chicago, that can give you more information about fractional CMOs and connect you with one who will give your business the marketing boost it needs.