CMOs are at the top of the marketing ecosystem. Roles and responsibilities vary by organization size and industry but nearly always include leading marketing strategy and marketing profit and loss (P&L) responsibility. In other words, they own organization’s marketing efforts.
In larger organizations, CMOs have broad strategic responsibilities for the 4Ps of marketing, product, price, place, promotion and a 5th P—positioning. These may include market research, brand management, product development, lifecycle marketing and customer experience, partnerships and channel development, advertising, public relations, and reputation management, and pricing strategies.
In smaller organizations, CMOs have more of a commercialization role, extracting profit and driving revenue by communicating the value of your products and services in the marketplace. They may be less focused on product development and more focused on brand management, advertising and public relations, strategic partnerships, and customer experience, with the goal of increasing sales and profit.
CMOs analyze markets to define one or more strategic objectives. Objectives may include increasing market share (more customers in the same market), market expansion (new markets existing products), diversification (new markets new products), product development, or strategic acquisition.
Depending on your needs, our team of experienced CMO consultants are available to help with any of the above capacities.
Minimally, our CMO services include:
- SWOT analysis (strengths, weaknesses, opportunities, and threats) of markets, competitors, offerings, and current resources.
- Complete audit of your current marketing efforts.
- Business intelligence and marketing data analysis.
- Define goals and objectives.
- Plan and develop a budget
- Formulate strategic annual and quarterly marketing plans
- Pinpoint key performance indicators
- Work with your team or advise you on resources for plan implementation.
Monitoring and Management
- Monitor, track and report KPIs to ensure alignment with goals and objectives.
- Provide leadership, direction, and oversight.
- Optimize and adjust strategy.
Why Hire a Fractional CMO?
Whether your goals are growth, revenue, or generating short and long-term profits, a skilled CMO can take you there. Many business owners who’ve traditionally led their company’s marketing find our CMO services during a rapid growth phase when they’re feeling overwhelmed and unprepared. Others come to us frustrated by what could be called reactionary marketing, cobbling together disparate resources and strategies as they’ve grown, with no cohesive, unified strategy. Our CMO services help you rein it in and get results.
At an average salary of $175,000, the cost of hiring a full-time CMO is prohibitive for many businesses. With fractional CMO services, you get the benefits of a full-time CMO, for a fraction of the cost. Reinvest the money you save in other areas of your business.
Regardless of whether you can afford one, you may not need a full-time CMO. Fractional CMO services are great because you can schedule more or fewer hours depending on your needs. Our CMOs typically spend 10-40 hours per month on your business.
Another benefit of using fractional CMOs is that because they have only limited interactions with your team, they aren’t caught up in office politics. They’re only there to deliver results.
What do CMOs do?
As stated above, CMOs own and lead marketing efforts. Nearly all CMOs share at least some degree of the following responsibilities within an organization:
- Strategic planning
Specific CMO responsibilities vary by industry and organization but fall broadly into three focus areas.
- Strategy focused—Often visionaries and big-thinkers with specialized market, product, or technical knowledge who drive the creation of new products, services, and experiences. Think Steve Jobs and Elon Musk. According to Harvard Business Review strategy focused CMOs are more common in multibrand and certain B2B service environments where centralized marketing groups set strategy.
- Commercialization focused—communicate the value of products, services, and experiences conceptualized by others to generate sales and revenue. Digital and traditional advertising, partnerships, loyalty and retention are commercialization focused activities. Most CMOs fall under this category where marketing is subordinate to other success drivers, such as innovation.
- Enterprise-wide focused—CMOs encompass full responsibility for strategy and commercialization, and profit and loss. Enterprise-wide CMOs lead the development and implementation of strategies, including sales, distribution, partnerships, customer experience, innovation, innovation and pricing. Individuals filling these roles possess strong analytical abilities, creativity, foresight, good judgment, and strong management skills. More frequently found in single brand and consumer-packaged-goods organizations, enterprise-wide CMOs often ascend to CEOs.
How can I identify a good CMO?
The more verifiable wins your CMO has had across a range of industries and organizations, the more likely they’ll win for you.
In most cases, CMOs need a breadth of knowledge across many areas, understanding of positioning, and know how to communicate value and create market demand. There’s no substitute for experience, but there are qualities all CMOs should possess.
The marketing industry revolves around being able to think outside the box. Innovation and critical thinking skills are amongst the most important factors for impactful marketing, meaning you should keep them at top of mind when hiring CMO services.
Strong communication skills aren’t just for keeping project roadmaps on track, they play a key role in how the public perceives your brand. CMOs convey ideas verbally and in writing, making clear and engaging communication a top priority for anyone looking for CMO services.
For effective marketing and communication, ideas are only one piece of the puzzle. To make those ideas come to life, CMOs need to assess whether they actually work. CMO services include looking at company data and metrics to identify which practices are working and where adjustments need to be made.
CMOs lead marketing departments and need strong leadership qualities, including passion, charisma, integrity, humility, and persuasiveness. They also need to understand how to motivate, delegate, influence, and inspire.
Why Do Companies Hire CMO Consultants Rather Than Full-time Resources?
The short answer is value, need, and commitment. Organizations can get the benefits of a CMO without committing to the $175,000 average annual cost of a full-time hire. And, that’s the base annual cost of a full-time employee, not including benefits, bonuses, vacations, general and administrative costs, and overhead which multiply the cost by an average of 1.99. So the average true cost of hiring a full-time CMO ($175,000 X 1.99) is $348,000/annum.
Depending on the scale and complexity of your marketing, you may not need a full-time CMO. You may just need someone to analyze your current strengths, weaknesses, opportunities, and threats, formulate a plan, and lead your team toward implementing it. Monitoring, adjusting and providing guidance along the way.
If you plan on hiring a full-time CMO in the future, working with a CMO consultant can help you better define, understand, and align expectations and responsibilities of the role before committing. Try-before-you-buy, limits risk and helps avoid costly future mistakes. For instance, working with a fractional CMO can help you decide which of the three focus areas (strategic, commercialization, enterprise-wide) work best for your CMO role.
Gauging the economic impact of office politics is difficult to gauge, but worth considering. Fractional CMOs have limited interaction with your team. They provide strategy, leadership, and guidance without getting caught up in political climates which could hinder their effectiveness.
Finally, if the relationship with a CMO consultant works out, there is always the possibility of converting them to a full-time employee.
What is a Fractional CMO or a CMO Consultant?
A Fractional CMO (also known as a CMO consultant, interim CMO, or outsourced CMO) is a third-party service provider who provides part-time marketing help to any business.
They handle similar tasks as an in-house employee but do not work full-time with a particular organization. Most fractional CMOs work with multiple companies at the same time.
Some of the major tasks of a fractional CMO include:
- Developing marketing strategy
- Monitoring and reporting marketing performance
- Leading and mentoring members of the marketing team
- Collaborating with other departments to understand department specific marketing needs
- Advocating for marketing in high-level business decisions and dealings
Reasons to Hire a Fractional CMO
Some of the more common reasons for hiring a fractional CMO include:
- You’re growing beyond your current capabilities. Individuals who have traditionally led marketing in your organization cannot keep up with increased demand.
- Your marketing is all over the place, you struggle knowing what’s working and what’s not, what to ramp-up and what to scale back.
- Your marketing needs strategy, leadership and guidance.
- You would benefit from fresh perspectives.
- You want to grow but don’t know how.
- You want to increase market share, expand into new markets, increase the value of your current customers, create new products, services, and experiences.
- You need brand alignment across all of your customer touchpoints, marketing, sales, customer experience.
- You lack the need for a full-time CMO.
- You cannot afford a full-time CMO.
Why Should You Hire CMO Services?
The short answer is growth and profitability from a dedicated marketing resource. One of the most common reasons clients come to us is because they are growing beyond the capabilities of their current resources. Rapid growth creates many challenges and opportunities. As businesses grow pressure is placed on every functional unit.
Startups or small businesses where owners, or founders have typically filled CEO, CMO, and COO roles are especially taxed by rapid growth. In startups it’s common for one employee to wear multiple hats, even when they aren’t the best fit.
Hiring a fractional CMO gives you a dedicated marketing resource enabling you to free up resources better suited to other tasks such as operations, accounting, sales, logistics and human resources. Freeing up resources alone is a force multiplier. Plus, you get the sought benefit of increased marketing ROI.
One primary reason for stunted growth is a lack of solid marketing strategy. CMO services help overcome this handicap. Marketing can become ineffective or plateau over time. Businesses often get stuck on the assumption marketing that worked for them in the past will continue working. They have difficulty breaking free of messaging, positioning, channels, strategies, processes, and systems even when those fail to produce results they once did.
Fractional CMOs can provide innovation and disruption with strategies that renew interest in your offerings. Fresh perspectives and forward-looking approaches can help you push past plateaus and avoid stagnation. Old Spice is a great example of a dying brand brought back to life with a refreshed marketing strategy.
How can I assess my CMO?
Assessing your CMO will likely involve many interview rounds with you and your team. Aside from gut-instincts, dive into candidates’ experience, reasoning, and results. Past wins are good indicators of future performance.
Familiarize yourself with industries and organizational types they’ve worked with. Have they worked for startups, growth-phase, mature businesses or a combination? More experience across a range of businesses at different stages may make them better equipped to lead your marketing efforts.
Attributes you want in a CMO are:
- Forward thinking
- Sound judgment
- Continually learning
Here are some interview questions to help you assess your CMO for the above attributes. Look for situation, task, action, and results (STAR).
- Tell us about your experience working with businesses in our industry.
- What were the marketing challenges of your last role and how did you overcome them?
- What are some examples of your approach to strategy?
- What have your most successful strategies been for companies like ours?
- What is your approach to SWOT analysis?
- Tell us how you’ve balanced risk versus reward in producing results for your previous companies.
- What tools, technologies, or skills have you learned in the past year?
- How have your efforts added consistency, cohesion, and alignment to the marketing efforts of brands you’ve worked with? What are some examples?
- Faced with an opportunity to generate fast profits in a fledgeling business with the possibility of negatively impacting your brand, what would you do?
- How do you approach balancing short-term needs with long-term growth?
- What have been some of your biggest organizational challenges as a CMO?
- Which metrics and KPIs do you find most valuable? Why?
- What brands do you respect and admire? Why?
- What business books have helped you most?
How Much Will CMO Services Cost Me?
According to DCAA cost accounting standards, the true cost of hiring a full-time employee is 1.99 times the base salary. This number accounts for overhead and administrative costs, technology, training, corporate costs, vacations, annual leave, bonuses and other costs full-time employees contribute to.
Average full-time CMOs have base salaries of $175,000. Multiply that by 1.99 to discover the average true cost of a full-time CMO is $348,250.
Fractional CMOs bill hourly on retainer between $300 and $350. According to a leading CMO firm, “Fractional CMOs offer all the benefits of a full-time CMO at a fraction of the cost. Some businesses don’t need a full-time CMO, and the majority of the goals can be accomplished in about 10 hours per week.”
Our experience shows clients need the most help during the first three months. Once the triage phase is complete and you have a solid strategic plan, our fractional CMOs can step back and let your team implement plans while providing guidance, monitoring, and adjusting strategy to align with KPIs.
Based on this scenario, you may be looking at 40 hours a month for the first three months and then scaling back to 10 or 15 per month during the remaining quarters for a cost of $71,500/annum or $5958/month. Big savings over a full-time employee for the same benefits.
Of course, the cost of your CMO services is determined by your wants and needs, and internal and external factors enabling efficient use of your CMOs time.
Move Beyond Cost and Start Thinking About Value
Whether discussing full-time or fractional CMO costs, we’re really just talking about upfront costs. What can you afford to get your marketing on track right now so that you can start seeing positive ROI?
If your CMO is worth their salt, you should see the value added to your business early on. CMOs will develop short and long-term goals along with KPIs that prove their worth. If they aren’t hitting revenue targets and meeting KPIs, cut your losses and move on.
Put cost in the background and hire the best person you can afford with your current resources. You can pay $348,250/year for a full-time employee or $350/hr for a contractor, if either can get 5 or 10 times multiple your spend, they’ve paid for themselves.
Contact us now to learn more about fractional CMO’s experience and how they can bring value to your business now and in the future.