Opportunity vs. Cost Impact of the CMO
It’s a common scenario. The small business starts out with a tiny, lean marketing machine full of execution-focused worker bees to help it get off the ground. This lean team fits with the startup model during the space and time of ground zero. Over time, that small business outgrows its lean marketing unit and begins to crave a higher level of leadership – a vision to catapult the organization toward its goals. What is the fractional CMO cost vs. full-time CMO?
It’s a normal progression of events. The time comes to enlist the services of a CMO in some capacity, and the situation begs the question: to hire full-time or fractional. The benefits of having a CMO are extensive, and the decision to go with a full-time Chief Marketing Officer or outsource to a fractional CMO is an essential part of your strategy.
Building a marketing team from the ground up is a task that does not come without a heavy investment in time and money. More and more savvy businesses (of all sizes) are opting to go the fractional CMO route. Before we get into an in-depth, side-by-side comparison, let’s review the costs of building a marketing department from the ground up.
The costs of building a marketing department from the ground up include:
- Recruiting / Hiring – Two challenges exist to curating the perfect marketing team. One, the demand can be high for experienced marketers, especially in fields like technology and healthcare. Two, the days of hiring marketing generalists are a thing of the past; today’s marketers are specialists. You will need one marketer for each channel your business goals focus on, such as paid advertising, SEO, content, design, etc.
- Training – Even the most seasoned marketing team will have to get ramped up on your business and your industry, most likely. When you hire an in-house team, this training and incubation period is on your dime and your time.
- Full-time Salaries, Insurance, Taxes, Benefits – Beyond any consulting or freelance rate is the additional costs of a full-time employee including taxes, health insurance, and added perks that are expected to recruit top talent. When you are seeking c-suite level employees like CMOS, you might even have to ante up with stock options or other high ticket incentives.
- According to Glassdoor, the estimated total pay for a CMO is $300,000 per year, which includes salary plus cash bonus, commission, and profit sharing. On top of that, you have to consider the average salary for a Marketing Manager is $71,014 per year, the average salary for a Graphic Artist is $43,929 per year, the average salary for a Copywriter is $48,205 per year, and the average salary for a Manager of Paid Search and Paid Social is $65,067 per year in the US. Let’s round up the numbers.
Breaking Down the Costs of Creating a Marketing Team
| Inhouse Marketing Team Costs | Value Add Of Fractional Model |
| 1 CMO | $300,000* | Retainer ranges | $250/hour – $150/hour |
| Marketing Manager | $71,000 | Small to midsize company budget | $120,000 – $96,000/year |
| Graphic Artist | $43,000 | Ramp up time | 2-3 weeks not 90-180 days for a full-time employee |
| Content Copywriter | $48,000 | ||
| Paid Social/Search Manager | $65,000 | ||
| Total Salary Cost | $527,000 | ||
| Insurance/benefits | $79,000 | ||
| *Cost | $606,000 | *Cost | $120,000 |
*CMO salary estimate which includes salary plus cash bonus, commission, and profit sharing.
*Estimates based on national average salaries from Glassdoor.com.
Why the fractional CMO makes good business sense – Beyond the cost savings as outlined above, in many cases, it makes sense to go with a fractional CMO. A mindset shift may be required for the business not to have their marketing team in-house, but the hiring of a fractional marketing CMO can make good business sense. Here are three ways for making the case for a fractional CMO and why many executive leaders are turning their attention and strategy to this option:
- Impact – Attracting and ramping up a top team of full-time marketers can take an exuberant amount of time even if you get it right the first time. A fractional CMO brings quick and swift impact to his or her clients by design. The execution part is handled as the fractional CMO typically has specialists in place ready to hit the ground running under guidance. The impact is more than incremental. It is felt throughout your organization and your marketplace.
- Results – Of course, results are the endgame. Full-time employees may not be as laser-focused on delivering measurable results as the fractional CMO that stakes his or her reputation on it. Also, the role of being a results-driven catalyst is finetuned, tested, and proven. In other words, this is the fractional CMO’s superpower.
- Accountability – Full-time employees have accountability for their roles in the organization, but the fractional CMO takes accountability to a higher level. It is often built into the very ethos of your relationship with them.
Rutkin Marketing is standing by to partner with your business and take it to the next level. Our fractional CMO model has helped countless small and midsize businesses find the impact and results they were seeking in a shorter and more cost-effective time frame. It all starts with a free discovery session to discuss your needs and the pathway to getting results. Let’s get started today.
