What’s a Typical Fractional CMO Hourly Rate? Answering Your Burning CMO Questions.
The Chief Marketing Officer (CMO) may be the most important top executive in an organization. Who cares how good the idea is, how faultless the product or service is, if nobody knows about it, no one will buy it. The responsibility of getting the word out to warm buyers falls on the CMO.
Unfortunately, many companies, especially at the startup stage, cannot afford an executive-level CMO, to say nothing of an experienced one. According to Payscale.com, CMOs command salaries averaging north of $170k.
That’s a big bite for a company just finding its feet. But without a CMO, it’s hard for a new product to learn to walk without getting trampled in a competitive marketplace, full of noise and short on attention. Companies without a CMO often outsource their marketing, sometimes in a haphazard or piecemeal fashion with no coherent strategy, no one desk where the buck stops. The result is a sloppy marketing audit and failure of the brand to launch. What’s a startup to do?
Relatively new on the marketing scene, Fractional CMO services allow startups and smaller companies to reap the advantages of collaboration with top CMO talent, even if they can’t afford to keep one on salary.
Wondering what a Fractional CMO can do for your business? Watch this video below.
In this article, we answer common questions about Fractional CMO services—what they are, and what they aren’t, how much they cost, and what you can expect to get from your investment.
What Is a Fractional CMO? What do they typically do?
A Fractional CMO is a CMO available for hire on retainer.
A good fractional CMO is every bit as qualified as a high-earning CMO of a major company. The difference is the fractional bit, and it means this—you only pay a fraction of the CMO’s salary.
You also only get a fraction of the CMO’s time. If you pay a CMO for 10 hours a week, (s)he probably has similar contracts with 3-5 other companies.
But for the time you have purchased from the fractional CMO, you have the full attention of an executive-level marketing specialist. And to build a unified marketing strategy that your team can execute, with supervision from the Outsourced Marketing Director, 10 or 20 hours per week may be more than enough.
Fractional leadership in upper management is nothing new. Fractional CIOs and Fractional CFOs have been common for decades.
A Fractional CMO offers more than just experience, education, and high-level insight into marketing. (S)he provides much-needed leadership, direction, and accountability, a dedicated expert to serve as the last word on marketing matters.
Decisions that the Fractional CMO can provide insight and leadership on include:
- Go-to-market strategy.
- Implementation of best marketing practices.
- Establishment of key performance indicators.
A Fractional CMO may not be a permanent member of your team. You might retain the services of a Fractional CMO for a specified period—three months, six months, one year, etc.—to get a marketing program up and running, iron out the kinks, and end the contract with the handing over of a well-oiled, custom-built, scalable marketing machine.
So how do you find a Fractional CMO? Top marketing firms often offer reputable Fractional CMO services. A freelancer might do a good job as well, but do your due diligence and get references!
What Is a Fractional CMO hourly rate, usually?
Remember, Payscale.com puts the average CMO salary north of $170k. Skilled CMOs in prominent industries like energy, tech, and healthcare command closer to $350k, with Glassdoor.com placing the upper limit at $452k. And that doesn’t count benefits and company equity, which full-time CMOs usually expect.
Outsourced CMO services allow you to access the talent of a great CMO, but avoid the burden of full-time salary and benefits with the expectation of perpetual at-will employment.
So how much will a fractional CMO set you back? The current standard is about $200-$400 per hour. However, we don’t recommend entering into a strict, open-ended hourly agreement. Building a working marketing strategy takes time. We, therefore, recommend that you retain a Fractional Marketing Director for at least ten hours a week on a six-month contract.
What are some advantages of using a Fractional CMO?
Using a Fractional CMO service to build and execute your marketing strategy has many advantages over other approaches, including hiring a full-time CMO and hiring vendors a la carte. Advantages of using a Fractional CMO include:
Lower Cost than a Full-Time CMO
Again, the salary expense of a full-time CMO ranges from $250k to as much as $350k for top talent—and top talent expects benefits, stock options, and other perks, as well as a commitment to ongoing, at-will employment. You may not need a CMO on-staff permanently, even if you could afford one full-time for a year or more.
Fractional CMO services allow you to get exactly as much CMO attention as you need—and can afford. The total contract price of Fractional CMO services will be a fraction of the price tag for employing a full-time CMO on an open-ended contract.
Unified Strategy
Organizations that cannot afford a full-time CMO sometimes try to piece together their marketing strategy ad-hoc, hiring third-party providers to run paid ads, perform SEO, produce content and videos, and pursue traditional marketing channels. This can quickly become chaos, with each service provider pulling the oar in a different direction and resulting in an incoherent overall strategy.
Other organizations may hire a full-service marketing agency, but fail to install a qualified decision-maker at the head of the marketing team. Instead, the CEO or the general manager may be the final authority on marketing matters—a job (s)he may or may not have the experience and expertise to do effectively. Yes, the marketing company brings experience and insight to the table, but the leadership sets the tone for the effort.
A Fractional CMO can unify your marketing strategy, get all third-party vendors on the same page, and act as the final check of accountability for the marketing strategy. In short, in the hands of a good Fractional CMO, the ultimate strategy is more likely to work.
Experience and Professionalism
Experience and professionalism count for a lot. A good Fractional CMO knows what strategies pay dividends and what don’t; understands what strategies work for other organizations but won’t be appropriate for yours; knows the best service providers, how to communicate vision and expectation to them, and how to get the best deal.
A Fractional CMO puts a polished face on your marketing efforts. There’s no question about who the buck stops with, and why. The Fractional CMO has paid their dues, succeeded and failed, learned “do’s” and “don’ts” at every stage—a learning curve that they have cleared before they take a dime of your money.
You don’t want your CMO learning on the job. A Fractional CMO knows how to do the job from day one.
Long-Term Planning and Execution
Even if a Fractional CMO joins the team on a contract of limited duration, the benefits don’t just stop when the contract ends. Part of the Fractional CMO’s mandate is to build a long-term strategy of execution that will outlast his/her contract. This includes the establishment of best practices and standard operating procedures that the marketing team can continue to execute months or even years after the Fractional CMO has moved on to his/her next assignment.
Compatible with Agile Pod Methodology
One of the key features of agile product development is that the team morphs and shifts based on the needs of the product. Strategists, developers, designers, writers--all get incorporated into the team as needed.
Fractional CMO services integrate beautifully with this kind of “pod” methodology. A Fractional CMO can be incorporated into the pod at the most opportune moment, and exit the pod seamlessly when his/her contribution is over.
If a full-time CMO interacted with the team in this way, you could argue that before and after the marketing sprint, you’re handsomely paying the CMO to sit on their hands and monopolize the coffee maker.
Continuity
An aspect of the long-term planning and strategy component of Fractional CMO services, part of the Fractional CMO’s job is to groom the marketing department to take the handoff once the contract ends. If your marketing team is green or nonexistent right now, six to twelve months under the leadership of a Fractional CMO can whip them into fighting shape.
Efficiency
One of the benefits of a short-term contract is that it gives the Fractional CMO a finite time to produce results. There’s no option of promising results “next year” — next year the Fractional CMO will be gone and if they haven't produced results by then, their reputation suffers.
In other words, the Fractional CMO has no time to waste in devising a workable strategy, testing and iterating it, and getting it into shape on-time and on-budget.
Scalability
Finally, a Fractional CMO has the mandate to build a scalable strategy. Marketing is all about scaling—building a strategy that will produce predictable, repeatable growth. Once your hand is on that dial, why stop cranking it?
Fractional CMOs build scaling strategies. When they hand the reins to the in-house marketing team, they have the tools not only to keep the train running but to speed up the train to produce increasing returns.
Do Fractional CMOs typically work in-person or virtually?
The short answer is that both are possible. If you choose to retain a local Fractional CMO, it may be valuable for the Fractional CMO to make regular visits to your corporate office, have in-person team meetings, and get hands-on with the project.
However, being open to remote Fractional CMO services opens the talent pool up to the entire world. Even local Fractional CMOs may prefer to provide their services virtually. Remember, they may have 2-5 other client companies and they don’t want to spend hours every day commuting between offices. Their time is more valuable than that.
This is a golden age of global collaboration and remote process management. At least consider the advantages of working with a remote Fractional CMO!
When should a new business or startup bring in a Fractional CMO?
Focusing on product management and sales strategies can get a young company very far. When it comes time to scale the business, to take it to the next level, sales-driven strategies often don’t cut it. That’s when marketing leadership makes the most difference.
The sooner, the better. You don’t want your sales to fall apart and have no Plan B to turn the revenue back on. Remember, it could take 12 to 18 months of iterative development to get a working marketing plan on its feet. It will be harder to weather this interim and expend the required resources if sales have plateaued or cratered.
New leadership is most effective if you bring it on when you don’t even think you need it—to scale up in times of plenty, not to salvage a sinking ship.
The right time to hire a fractional CMO may be:
- If you have no written marketing strategy in place.
- If you currently purchase marketing services but are not sure of the ROI.
- If you are between $5 million-$50 million in annual sales—but this is just a guideline. Fractional CMO services could make a big difference at much lower or higher revenue thresholds.
Fractional CMO services put world-class marketing talent within reach, even for startups, small businesses, and medium-sized businesses that can’t afford another fat executive salary with benefits on their payroll. The benefits these organizations stand to reap from a Fractional CMO include:
- Massive savings compared to a full-time CMO.
- Experienced, competent leadership in marketing and scaling.
- Access to CMO services for a finite time, as long as they are needed.
- SOPs and BPs to continue and scale a working marketing plan once the Fractional CMO’s contract is up.
Startups and mid-sized businesses ready to move from a sales strategy for a growth strategy, whose marketing efforts could use a shot in the arm, should strongly consider a Fractional CMO as the path to profitability.
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.
You Might Also Like:
How Do You Know Whether Your FCMO Is Really Worth the Money?
5 Smart Tips for Choosing and Working With an FCMO Agency
|
|
Want To Meet Our Expert Team?
Book a meeting directly here
