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Making the Case for the Fractional CMO

Making the Case for the Fractional CMO

If this is the year you consider adding some heavyweight artillery like a Fractional CMO to your marketing team, you’ve stumbled into the right place. Considering adding a full-time CMO to staff versus fractional CMO services is an essential first decision toward achieving your marketing goals. Weighing out the pros and cons of adding a permanent staff member versus the option of exploring a fractional CMO relationship is an important first step.

Many businesses are taking a reflective step to assess how they fared so far this year. The global pandemic has been a current that has reshaped the way businesses operate. Employees working remotely and, in many cases, leaving their jobs. Forbes reports “the current U.S. labor market is in a unique position. Inflation is at its highest levels in 40 years, unemployment is at its lowest in 20 years, and contingent work is more widespread than ever. The workforce has gone through a tremendous shift, and if businesses don’t evolve their talent strategy, they risk falling behind.”

As you look at this as an opportunity to reset and possibly restructure the fundamental workings of your marketing organization, this is the perfect time to assess whether a full-time CMO or a fractional CMO is the best course of action. Here we weigh out the opportunity vs. cost impact of the CMO.

 

Weighing the Benefits of the Fractional CMO

Drilling down on adding a CMO to your team – While the value of having a real C-level executive CMO on the team is high, the choice to add one to your staff configuration comes with a price tag that requires some analysis. Customer strategist, growth driver and enterprise business leader are only a few ways to describe their numerous duties. Here’s some guidance to assist with your research:

First, decide if a CMO is what you need. If your question is, “Do I need a CMO?” The short answer is “Yes!” A CMO can provide leadership, strategy, and guidance to drive business growth – yet often, that person just isn’t on your payroll. I’ve found that the complexity of a CMO’s job is accelerating. They have to be creative, use more data analytics and technology, build and manage teams, and stand out at the C-suite level. Factors that can impact your decision are variables such as:

  • Company goals – Whether you are a small startup or a larger organization, a CMO may be what you need to accomplish your goals. If you need seasoned support to launch a new product line, create a digital brand or re-establish your offering in a new market, a CMO could be the catalyst that gets you there.
  • Culture – How would adding a C-suite level marketer to your team impact your organization’s management style and culture? Many businesses make the mistake of jumping the gun on a CMO hire without forethought to the impact on the internal workings of the company.
  • Aggressiveness – If you need to make bold moves and find successes in a short period of time, a fractional CMO can help you shorten the path to success.
  • Market factors – Careful consideration of your market variables is in order as you consider whether to hire a CMO, whether in a full-time capacity or a fractional CMO service. It’s important to fold in your position in your marketplace, your ability to measure your efforts and the cost-benefit analysis of where your investment will serve the company.

Next, assess whether your budget and infrastructure can support it.  The latest Glassdoor places the average salary base for a CMO at $212,000. Of course, a base salary does not include the cost of benefits, taxes and bonuses or perks. Consider these factors as you weigh out your investment in your new CMO:

  • The CMO salary comes with a fixed cost that your organization should be able to withstand. While this may be the right fit for some businesses, it could be too high of a level of cost commitment for some.
  • You should have defined business goals and buy-in for the marketing efforts you plan to put into place.
  • Before bringing a CMO on board, your business should have infrastructure in place. This includes having an established web presence, a lead generation initiative and measurement tools to support the vision of the CMO. The CMO, in turn, can be a mentor and leader for the team that drives focus on building demand for your sales pipeline.

 

Determine if a fractional CMO fits. Understanding how a fractional CMO works is the first step to deciding if it could be a solution that is right for your business. The fractional CMO typically works on a retainer basis, based on expectations set during the marketing planning stage. The fractional CMO relationship can be molded to fit your needs, whether full-time or part-time and can be scaled up or scaled down as things change. While the investment in a fractional CMO for B2B strategic marketing consulting can be significant, it often is less than adding a full-time, high level employee to your staff.

  • Understanding the costs – Your budget for a fractional CMO can be estimated to cost between $8,000 to $12,000 per month. As compared to a full-time CMO, a fractional CMO is a variable cost, more temporary. Your relationship with a fractional CMO is the perfect scale up, scale down type of relationship that can support your growth needs while allowing you to support all levels of strategic and tactical support in achieving your revenue objectives. For around half of the median annual cost (keeping in mind that the median can be significantly lower than the price tag required in competitive industries or markets), the company can employ a strategic marketing consultant: a marketing executive to define and shape its strategy and specialized talent to execute the strategy to deliver results.
  • Do the math – While hiring a full-time employee could be the best fit for your company, it’s important to crunch the numbers and weigh out the opportunity vs. cost impact of the CMO. Here’s a view of how it could look in real life. If your budget is $8,000/month, it could be broken out as follows:
    • 1 workday per month of CMO time @ $250/hour ($2,000)
    • 5 workdays per month of strategic marketing support @ $150/hour ($6,000)

Reasons to lean toward using the services of a fractional CMO – A Fractional CMO is a marketing executive experienced and poised to help with customer acquisition, sales development and company growth from day one. Your company gets executive experience without a high level of commitment and large fixed costs. Outsourcing this C-suite level marketing role is not new to savvy businesses who understand the key  benefits such as:

  • Reduced Costs
  • Improved Efficiencies
  • Increased Revenues
  • Expertise + Experience + Leadership

A note about being agile – If anything was learned over the past few years, it is that businesses have to be agile enough to pivot when needed. The structure of a fractional CMO offers just the right mix of cohesiveness and agility to help your business strive toward its goals. Rutkin Marketing brings a big dose of marketing leadership, ongoing strategic support, and greater budget for other matters that are critical to the success of an agile marketing program in its role of fractional CMO for businesses of all sizes across varied industries.