5 Things a Fractional CMO Will Do For Your Business
Some companies try to DIY or outsource their marketing efforts, but the serious ones recruit serious leadership to produce serious results from their marketing campaigns. Leadership is often the difference between an effective team and a mob stumbling in the dark. Marketing is no different.
Companies that hire a Fractional CMO usually want to level up. They face a gap between where they are and where they think they ought to be. Fractional CMOs fill a crucial role that makes them an attractive solution to take startup, small, and mid-sized companies to the next level.
What Is a Fractional CMO, Exactly?
First things first—a “CMO” is a Chief Marketing Officer, a senior-level manager like the CEO, COO, CIO, CTO, or CFO. The CMO is not the first senior corporate officer to go “fractional.” Fractional CIO and Fractional CFO services have been part of the business landscape for years.
They are now joined by the “Fractional CMO.” Whereas a full-time CMO is a long-term high-level employee of a single company, usually salaried with stock options, a Fractional CMO performs the functions of a Chief Marketing Officer for multiple companies, usually on a temporary contract basis. In this way, the Fractional CMO’s role is more of a service provider, with each client company getting a “fraction” of that CMO’s time. Essentially, you are “renting” a CMO instead of shelling out to buy one.
Fractional CMOs are usually seasoned marketing professionals, often veterans of Fortune 500 companies. They might have gone into private practice, or they could be part of a marketing group that hires them out as Fractional CMOs.
A company might hire a Fractional CMO for ten, fifteen, or twenty hours a week, on contracts of six months, twelve months, or longer. Fractional CMOs usually bill by the hour in the range of $200-$300 per hour. Of course, everything is negotiable—the compensation will depend on the length of the contract, scope of the work, and the experience of the person (or persons) taking on the role of Fractional CMO. As with any service provider, quality of service varies, so do your due diligence on any Fractional CMO service you might retain!
This is a high compensation bar. But it works out to significantly less than the ongoing compensation package of a qualified full-time CMO.
Responsibilities that fall to a Fractional CMO during the time you hire from them include:
- Developing marketing strategies, including go-to-market strategies.
- Developing and leading the marketing team.
- Leading marketing initiatives.
- Market and client research to define the target market.
- Aligning the marketing plan with organizational vision and purpose.
- Aligning the marketing plan with client needs.
- Shape brand messaging.
- Create budgets, forecasts, and reporting systems for the marketing department.
So what benefits will your company reap from retaining a Fractional CMO?
[bctt tweet="According to Payscale.com, a full-time CMO will set companies back an average of $170k per year, while Glassdoor.com sets the upper range for a good fractionable CMO north of $300k" username="digitalpart"]
1. A Fractional CMO Will Make Your Marketing Budget Go Farther
Hiring a Fractional CMO might be the best choice your company could make to steward the marketing budget.
Start with the savings. According to Payscale.com, a full-time CMO will set companies back an average of $170k per year, while Glassdoor.com sets the upper range for a good fractionable CMO north of $300k--and that’s without stock options and other forms of compensation.
The bottom line is that most small- or medium-sized companies can’t absorb that big a salary expense, especially not on a long-term basis. A Fractional CMO gives these companies access to leadership in their marketing efforts without having their entire marketing budget drained by executive compensation.
That leadership makes a difference as well. Inexperienced marketing directors tend to throw money at efforts and hope something sticks. They may also dump extra money into inefficient campaigns that have not been significantly targeted. Lack of direction can lead to duplication of effort and departments working at cross purposes from each other.
An experienced Outsourced Marketing Director can direct a limited marketing budget to the pressure points where the money will do the most good, and will conduct a marketing audit for your company. The Fractional Marketing Director can also improve the targeting and effectiveness of the chosen campaigns to make them produce more results for less money.
[bctt tweet="Marketing vision falls more under the purview of the CMO than the marketing director. It requires a person not only experienced in different strategies of marketing but with a feel for marketing that will guide them through unfamiliar terrain." username="digitalpart"]
2. A Fractional CMO Will Provide a Marketing Vision for your Company
One of the best reasons to bring on a CMO is to put a fresh, experienced pair of eyes on the marketing task at hand, as well as a fresh voice in the creation of a marketing vision.
Companies that can’t afford a full-time CMO may assign a less-experienced senior manager as the final authority on marketing strategy—a task (s)he may be unqualified for. A marketing director can contribute heavily to the execution of a marketing strategy, but without the right marketing vision, the marketing director could end up trying to fit a square peg in a round hole. (S)he might spend time and effort competently executing the wrong strategy.
Marketing is a subtle art—so subtle that it is little understood by the general public or the organizations that badly need to do it well. Marketing is any activity undertaken to increase brand awareness, whether this is exposing prospects to the brand for the first time or making the brand so ubiquitous that it dominates, achieving top-of-mind awareness within the niche.
Obviously this task will look a little different for every organization. Crafting a working strategy requires a vision for the marketing plan—a sense of the desired final outcome, the message to be delivered, the feelings to be aroused in the target market. It’s a form of “beginning with the end in mind.” Once you have a vision of the ideal outcome, it’s much easier to reverse-engineer a strategy to achieve that vision.
Marketing vision falls more under the purview of the CMO than the marketing director. It requires a person not only experienced in different strategies of marketing but with a feel for marketing that will guide them through unfamiliar terrain where strategies that worked before might not work again. That’s the kind of insight a Fractional CMO can offer.
3. A Fractional CMO Will Make Your Marketing ROI Higher
Marketing is an investment. We’re used to thinking of real estate, equipment, or liquid securities as investments, but not marketing. And yet, marketing shares with other investments a key condition. As with any investment, the investor expects—or hopes—to receive a return on investment (ROI). By something in, they hope to get something more out.
Marketing ROI is especially relevant in the digital marketing age. Digital marketing makes it easy to track the results of a marketing campaign using analytics. Whereas with traditional marketing it was harder to know exactly which dollar of revenue could be sourced to which penny of the marketing budget, it’s easy to know how much revenue is being driven by Google ads, Facebook ads, YouTube ads, SEO, etc.
In many ways, this has made companies “ROI-obsessed,” determined that they can “buy growth.” This might make it tempting to regard a Fractional CMO as a needless luxury. Isn’t the Facebook algorithm all the CMO you need?
[bctt tweet="Investing upfront in a Fractional CMO contract could establish the campaigns, benchmarks, and controls that will make your marketing more effective for the long-term, improving your ROI substantially." username="digitalpart"]
Not necessarily. Without control of the message, understanding of the audience, and alignment with company vision, marketing campaigns—even clearly profitable ones—could be costing you more than they need to. Digital marketing metrics provide immediate data, but they may not be useful in determining the “customer lifetime value” (CLV), a long-term metric of how much revenue the average customer can be expected to generate for the company. With better targeting, upsell, cross-sell, and conversion campaigns, better marketing architecture can actually increase the CLV.
Investing upfront in a Fractional CMO contract could establish the campaigns, benchmarks, and controls that will make your marketing more effective for the long-term, improving your ROI substantially. Remember, the Outsourced CMO’s contract could be as little as six months or a year. The savings (s)he generates with targeted and efficient campaigns could be on-going.
4. A Fractional CMO Will Give You Long-Term Flexibility
One of the biggest reasons a full-time CMO is impractical for smaller or medium-sized companies is the expectation of an ongoing compensation expense. No CMO in search of full-time employment would want to hear that they are only needed for six months or a year. That hefty $170k-average salary is an ongoing thing.
By hiring a Fractional CMO, companies can preserve their long-term flexibility by not committing to that full-time relationship. Remember, the relationship is “renting, not buying” the services of the CMO. In a way, it’s less of an actual “chief officer” role and more of a consultancy service. Companies hire consultants all the time—this is just the kind of consultant that creates, corrals and refines marketing campaigns.
Some companies may not need open-ended CMO services. While a CEO, CFO, and COO (even fractional ones) may be an ongoing necessity, a Fractional CMO may just be needed for vision, strategy, and implementation, as well as development of the marketing director and/or marketing team into the kind of unit that can execute the strategy.
Using a Fractional CMO means that the company has access to the CMO’s services for exactly as long as they need it—not more, not less. If the marketing plan needs an overhaul a few years down the road, the organization can always hire another Fractional CMO, or a Fractional Marketing Director, to update the strategy. It’s much more cost-effective than continually paying the salary of a CMO whose role was once very necessary, but may no longer be justified.
5. A Fractional CMO Will Help You See Your Marketing Plan Through
As with any effort in business, it is important to finish what you start. Follow-through is everything, especially in marketing. Half a marketing strategy doesn’t get you half the results—it will most likely give you no results at all.
Marketing is an ongoing task, but once you see a plan through, it is usually sustainable. A Fractional CMO can bring the follow-through in a variety of ways. For starters, the Fractional CMO is a marketing specialist, able to better complete tasks that the CEO or CFO does not have the time to complete—and may not even be qualified to complete.
A Fractional CMO can also take a new or inexperienced marketing team and whip them into shape, able to handle the ongoing aspects of the marketing strategy after the Fractional CMO’s job is done.
A key goal of marketing is to stand out from the competition. If a company currently does not stand out enough, a Fractional CMO may be able to help refine the message or purpose to step up or differentiate the brand from others.
A Fractional CMO can also:
- Craft a user-friendly message around a technical or complicated product.
- Establish marketing metrics and help the team understand which ones to watch and why they are important.
- End cycles of trying multiple marketing channels—throwing things at the wall and seeing what sticks--and instead craft a comprehensive vision and plan.
All of these tasks require leadership and a 30,000-foot view. Attempting to outsource these different tasks could easily result in an incoherent marketing strategy. The experience and leadership of the Fractional CMO is that 30,000-foot view.
Hiring a Fractional CMO is not a cure-all. It is not the only approach that can produce results in brand development and awareness. But Fractional CMO services are a powerful tool for small to mid-sized companies that can’t afford executive-level marketing leadership, but want to benefit from the kind of focus, direction, and expertise a seasoned CMO brings to the table, for a fraction of the cost and on a temporary basis.
For companies turning to marketing to level up, a fractional CMO can …
- Make your marketing budget go farther.
- Provide a marketing vision for your company.
- Make your marketing ROI higher.
- Give you long-term flexibility.
- Help you see your marketing plan through.
Set in this context, the fresh eyes of a Fractional CMO may look appealing even to larger companies who can afford a full-time CMO! The value is hard to deny.
For startups and up-and-comers, however, a Fractional CMO is a no-brainer—it’s an opportunity to work with top-shelf marketing talent, at a cost they can afford and a commitment level that avoids waste and produces results.
Want to learn more about how a Fractional CMO can take your marketing potential to new heights? Digital Authority Partner's Chicago Fractional CMO Services or San Diego Fractional CMO Agency offers you a unique approach to marketing strategies, and can confidently take you on a path to reach next-level growth.