A Fractional CMO Can Take Your Marketing To The Next Level

Fractional Chief Marketing Officers are usually best hired by mid-sized businesses with revenue of $2 Million or greater and are in need of help with marketing automation, hiring of talent, branding, and Pay Per Click campaigns. This is different from the more short term role of an Interim CMO in several important ways we will address in this article along with many more questions.

In this article we are going to answer the following questions for you:

• What is a Fractional CMO?
• What do they do?
• How do they differ from an Interim CMO?
• Why hire a Fractional CMO?
• How would one benefit my company?
• When should a Fractional CMO be hired?
• What does a Fractional CMO NOT do?
• How is the performance of a CMO consultant best measured?
• How much do the services of a Fractional CMO cost?
• What is a Digital CMO?

We hope to help you discover if this kind of executive consultant is the right choice for your company’s needs, or if an Interim CMO or other marketing consultant would be a better fit. We will also give you a realistic expectation of what Fractional CMO services can help your business achieve.

What Is A Fractional CMO?

As we established in the introduction, a Fractional Chief Marketing Officer is an outsourced executive who is brought in to lead your company's promotional and advertising efforts on a part-time or consulting basis. This means that you get the expertise of a senior level marketing professional, but without the costs of having a full time executive in the position. You work with one of these executive level consultants for the amount of time you need them a week, whether that is 10 hours or 30, and then other companies will use them during other fractions of their available hours. This is why they are called Fractional, you are using a fraction of their time.

These executive consultants are usually hired for terms ranging from six months to two years, which ensures to both parties a high level of commitment. This sort of time frame is also important due to the amount of time it takes for marketing strategies to form and bear fruit.

Fractional executives are becoming more common in business. Small to mid-size companies have been using executives for hire in these consulting type roles for decades, and now this concept also includes marketing executives as well. As an executive level position, they bring the skills and experience that is expected of a C-Level role, but in a more affordable way that will help your business to grow. They handle all of the traditional marketing executive responsibilities, but the cost of Fractional CMO services are scalable to your needs.

What Does A Fractional CMO Do?

The easy answer is to say that they do what your company needs them to do. That, of course, is an oversimplification of a much more in depth reality.

These short-term executives are hired to take on the role of senior leadership in a company’s marketing department. They analyze the current department budgets, plans, branding, sales objectives, competition, and growth objectives. With this information they then create a roadmap for the company and guide the company down this well crafted path.

In essence, a Fractional CMO is an outsider who comes in and figures out:

• What is going on as far as your company's marketing department?
• Is your company doing the right things, hiring the right people, and investing in the right channels?
• What should your company be investing in? Using your current market position, clients, and competitors as a guide.
• Is your company’s marketing budget appropriate for your business objectives?
• Does your company have the right resources for achieving your business goals?

These temporary executives will come in and interview your executive and marketing teams in order to get an understanding of where the company is from a marketing and business point of view. Then they will do a competitive advantage analysis to discover the divergence between what your business is doing and what it should be doing. They then create a report that breaks down the roadmap for your company’s advertising efforts going forward.

With the analysis and roadmapping complete, they then begin to focus on overseeing the execution of the promotional and advertising plans. At this point the Fractional CMO responsibilities shift towards leading their team, managing advertising budgets, short and long term goal setting, making reports on the performance of the department, and facilitating communication between the CEO and the marketing team (both internal employees as well as external vendors).

How Does A Fractional CMO Differ From An Interim CMO?

When your business is moving beyond the need for marketing consultants and has begun to look for in-house leadership, there are a few options available to your company. Fractional CMO’s and Interim CMO’s have similarities, but are uniquely different in their ability to fulfill a company's needs.

What is an Interim CMO?

An Interim CMO differs from a Fractional CMO in a few key ways. An Interim CMO is a full time (or near full time) position. While Fractional CMO’s are part time roles for companies that are just starting to need executive level marketing leadership, Interim CMO’s are for businesses who have an established marketing team and are in a period of growth or transition. An Interim CMO is a short term position, or occasionally contracted temporarily to see if the executive fits the role before being offered a permanent position. They keep the wheels of the department in motion and fulfills the executive level responsibilities as the company seeks out the talent it needs, including the onboarding of the candidate who permanently fills the executive role.

Comparison Between Fractional and Interim CMO’s

Interim CMO

• Short Term Hire: Often fulfilling the role when an existing Chief Marketing Officer leaves, during a company merger, or other leadership change that leaves the role empty. Sometimes as a trial before becoming a permanent executive.
• Hours: Full or Near Full Time
• Business Size and Needs: Mid and Large size businesses with an established Marketing officer position that needs filled. Cannot effectively operate without an executive leading the team.
• Objective: Keep things on track during a period of transition. Reduce loss. Prepare the incoming permanent executive.

Fractional CMO

• Longer Term Hire: Helping in the creation of a marketing leadership role at the executive level. Average time frame of 6 month to 2 years.
• Hours: Part Time, scalable hours to allow the company to use their services in a manner that best suits their needs and budget.
• Business Size and Needs: Small to mid-sized businesses looking to create a marketing leadership role at the executive level, and need a proven executive in the position to help them start off right.
• Objective: Take on the CMO responsibilities in a company’s marketing department. Analyze the current advertising budgets, plans, branding, sales objectives, competition, and growth objectives. Then create a promotional roadmap to guide the company.

Why Hire A Fractional CMO?

Why should your company hire a Fractional CMO? Let's start off by seeing who doesn’t need to hire one yet.

• Startups: A startup very likely does not need to hire one. A startup is focused on creating a product, bringing it to market, and attaining funding. A marketing executive of any type is not something that will likely be in your focus and scope at this point. Fractional CMO responsibilities entail defining marketing plans and assigning a budget to the resources needed to execute that plan. Their budget will usually be near to over a million dollars. Their success hinges on the budget provided and approved for their efforts. As a Startup, your resources are tied up in the development of your product.
• Enterprise Level Businesses: As an Enterprise, you are much more in need of an actual CMO. A Fractional executive only works part time, 10-30 hours a week, and after the first few months of engagement they usually work less hours per week. A large enterprise needs a full time Chief Marketing Officer working 60+ hours a week, creating and executing complex marketing plans. An exception to this is the case of hiring a Fractional CMO to evaluate the performance of your existing marketing executive and team.

Who needs a Fractional CMO then?

If your company nets $2 million or more in revenue and does not have a full time CMO, then you should be considering the hiring of a Fractional Chief Marketing Officer. If your gross revenue is between $2-30 Million a year, then you definitely need a Fractional marketing executive. With less revenue, you risk a diminished ROI due to not being able to afford implementation of their recommendations.

If your revenue is more than $30 million a year, then you should consider hiring a full-time CMO instead.

Fractional CMO services are best suited to well-funded and established businesses in need of marketing leadership to grow their business to the next level.

How Does A Fractional CMO Benefit My Company?

A Fractional CMO can benefit your company in a myriad of ways. Here are some of the biggest issues that can be addressed by Fractional CMO services.

1. Immediate Insights

Fractional executive consultants can provide you with nearly immediate insights into both what your company is doing well, along with the areas you need to improve. They are able to do this because their executive level experience means they have seen almost any situation, followed the trends, witnessed flawed executions and they know what pitfalls to avoid. They can quickly and efficiently understand what works and what doesn't, as well as working to understand your business. From there they devise a plan that puts you on the right track to increase your revenue.

2. Collecting Actionable Marketing Insights

Fractional CMO services also include the collection of actionable insights. You need to know the answers to important questions such as: “What’s the average order value of a sale?”; “What’s the average lifetime value of a customer?”; “Which of your current promotional channels is most effective?” The answers to these questions are important data that will allow you to execute the most effective advertising campaigns that provide the best return on your investment.

The tools and processes used to turn these insights into actionable plans is referred to as MarTech. MarTech consists of using the right system and tools to help you understand the best way to attract, convert, and manage customers. A CMO consultant can help you to properly collect and understand this important data.

3. High Experience, Low Overhead

Looking at salary aggregation sites such as Glassdoor, we can see that the average salary of a full time Chief Marketing Officer is around $172,000 a year. That is just the base salary. When you add recruitment costs, bonuses, taxes, benefits, etc, you could be paying over $250,000 a year.

If your company is of a large size, then that investment might be worth making. But for most small to mid sized companies, they do not need to take that step yet. You can get Fractional CMO services for a third of this cost or less. The cost of Fractional CMO services are scalable to your needs too, as opposed to being a fixed cost. This is because you pay a Fractional CMO hourly rate to the executive only for the hours a week you use them, rather than a full time salary.

If you have a full-time marketing team of less than 10 people, you certainly don’t need a full-time marketing executive. You need an executive consultant to come in and create a roadmap for success that can be implemented by your in-house staff or agencies you have contracted for marketing services.

You should definitely consider this option if you have no full-time marketing staff and have been outsourcing your promotional efforts to third-party agencies. You need someone who is committed to your company and cares about your bottom line. They can analyze, monitor, and raise questions about the efforts of your external vendors.

4. Establishing a Marketing Process

It is easy to plan and come up with ideas, but executing those ideas is what leads to success or failure. This also applies to promoting a business. The success of a marketing department lies in the ability to create and follow a process that delivers results. When building a marketing department, setting up the proper processes is the most important part of the job, even if it is sometimes overlooked.

Creating a strong MarTech foundation, choosing the right talent, setting clear priorities, outlining the right strategies, these are all vital parts of a defined marketing process. For most companies, they will need a CMO consultant to get it right.

Processes consist of rules. They are the guidelines for investment in a marketing tactic, defining what, where, why, how, and for how long. Your process should define how you invest in SEO, PPC, conferences, or website optimization as well as the metrics for success you should use to measure your promotional investments.

Your process should define what your team should be doing, as well as the set of rules that need to be followed. These experts make sure you do all the right things, invest in the right people and initiatives, and make sure the team executes the initiatives according to the plan.

5. A Fresh Perspective

One of the things that a Fractional CMO can provide that is invaluable, is a fresh perspective on your company. You and your team have only seen your company from your perspective, and having a fresh and experienced eye come in can help to give you greater perspective. An executive in this role can provide both well-defined marketing practices as well as a roadmap to execute the right strategies. They can find and articulate your company’s issues, and provide actionable ways to address them. The more the consultant learns about your business, the more they can fix the issues causing your marketing department to underperform.

6. Oversee Day-To-Day Marketing Projects

These short-term executives also fulfill the important role of overseeing the day-to-day promotional and advertising efforts of your company. What this means, is ensuring that everyone is doing the job they need to be doing. CEO’s often try to do this job themselves, which is something they shouldn’t do. The CEO should be focused on their job and the future of the company. The overseeing of the marketing team is one of the most important Fractional CMO services that they can provide.

7. Train Your Team

Finally, these executive level consultants will train your team. The most effective ones will ensure that your team learns how to do their job more effectively and efficiently. They give the team insights on how to improve at their tasks, what taste they should prioritize, what questions to ask, and other important skills your team needs to develop to perform at an optimal level.

When Should A Fractional CMO Be Hired?

Determining the right time to hire a Fractional CMO depends on several factors.

1. Your company lacks marketing leadership and you have other full-time marketing employees on staff.
2. You have been growing steady for the last two years and have 20+ full-time employees.
3. Your marketing investments have been lacking in results.

The exact moment you should decide to hire a scalable marketing executive such as this is not easy to nail down. However, CEO’s and other executives commonly know when they are lacking the needed marketing leadership to grow their business. They might not know that they need an executive level consultant, but they understand that there is a missing piece to the puzzle of success for their marketing department.

Or to put it simply, if you are not happy with your current advertising efforts, you should consider hiring a Fractional CMO.

What Does A Fractional CMO NOT Do?

Now that we have defined what a Fractional CMO is and what they do, we now need to address what they are not.

Earlier in the article we mentioned that a company should have greater than $2 million in revenue before engaging Fractional CMO services. This qualification was stated for good reason. An executive marketing consultant can only be successful if they have a dedicated team to manage. That team can be internal or external, but they need to be there to support the efforts of your consulting executive.

This is why that $2 million in revenue is so important. You need the internal team or external partners (SEO, SEM, Paid Social, Marketing Agencies) to be already working on marketing initiatives before you add a Fractional CMO to your executive team. The reason for this is simple. They are not an employee that is working full time on specific marketing tasks. If you are paying an executive consultant to do SEO work or post on social media, you are paying far too much money for the wrong resource.

Their job is to evaluate your current staff and vendors, the work they are doing, and their deliverables; then determine the right optimizations needed to be implemented to improve your promotional and advertising spend.

You shouldn’t hire a Fractional CMO if you are not investing in your marketing already. The exception to this rule is when you hire a consultant first to evaluate and hire agencies or fill open jobs at your company. They are best used when you want to improve your current advertising initiatives and get a better return on investment for your dollar. This means you need to have some internal and external resources available and ready to implement the recommendations made by them.

How Is The Performance Of A Fractional CMO Best Measured?

Finding the right Fractional Chief Marketing Officer for your company begins during the interview process. By paying close attention to the questions your potential hire focuses on, you can determine if they are the right candidate. You are on the right track if they ask questions about your business, product, and where you fit in the market. If instead you find them asking questions about your current marketing strategies and start discussing the strategies they will implement, then they are a marketing manager disguising themselves as a CMO consultant.

A Fractional CMO has to have the capability to understand your business and your team, and only then will they be able to talk about the specifics of marketing strategies. You are looking for an executive and not a marketing manager, you do not need just the strategies, you need the leadership to build and grow an effective marketing program. You need someone who will build your marketing department from the foundation up.

What it all boils down to is that the best way to evaluate the performance of a Fractional marketing executive, is thinking of them as a leader of the department. Here are some specific metrics to measure the effectiveness of your fractional consultant.

Marketing Strategy and Implementation

If you hire an excellent Fractional CMO, then in 3-6 months your company should have a clearly defined promotional strategy that is being implemented. A roadmap that is defined and approved by your team should be churning out deliverables monthly. Your roadmap should be set for at least one year in advance.

Brand Strategy

Along with this roadmap, the Fractional CMO should have helped to facilitate the creation of strong branding for your company. Everyone inside your company and outside should understand the company elevator pitch, value proposition, and why your business is the best at what you offer or service you perform.

Marketing spend leadership

Fractional CMO responsibilities should always include the management of your company’s advertising spend. This includes paid ads, paid media, paid social media, and SEO management. They are not responsible for the implementation of the tactics, but for reporting the performance of them, monitoring the campaigns, and analyzing the results to improve spending. These consultants manage both internal teams and outside vendors, taking responsibility for their final outcomes.

Communications Efforts

One other method of judging your Fractional CMO’s performance is the commercialization of your product or service. A great one will direct their efforts and time towards creating revenue for your company. They do this by evaluating pricing strategies, analyzing customer insights, why customers choose your product over the competition, and how to gain the best brand positioning for generating the most revenue.

To boil all this down, the best way to measure their performance is based on how they manage promotional channels, resources, and strategies in order to generate more revenue for the company.

How Much Do The Services Of A Fractional CMO Cost?

By this point, the question likely burning in your mind is how much is the cost of Fractional CMO services? This is not a simple question, as there are many factors at play. As an example, a short-term marketing executive for a pharmaceutical company is going to have a different price tag than one for a FinTech company.

The average Fractional CMO hourly rate ranges from $200 to $500 an hour. Some of the biggest consultant companies charge much more, up to $1,500 an hour. Usually though, the Fractional CMO hourly rate will be around $250-$400 contingent on the industry your company operates in.

Next, you need to account for the time that they will need to learn all relevant aspects of your company. As an executive role, they will have to become familiar with all aspects of your company, which is going to take some time. At the beginning, you will need to budget 20-25 hours a week for the first month. The average Fractional executive devotes around 300-500 hours a year to a client, and those hours get lower in the second year.

Based on this information, you can safely assume that the average cost of Fractional CMO services will be between $90,000 to $150,000 a year. This is on average less than half the total cost of a full time CMO.

Fractional Digital CMO’s Keep You On The Cutting Edge

Maybe your company already has great executive level leadership when it comes to traditional promotional and advertising channels, but is lacking that same level of strength in the digital realm. Or, perhaps you are just looking for a leader to launch your company’s promotional efforts with a digital focus from the start. In this case, a Fractional Digital CMO is a specialist who can help you get ahead of the competition and stay ahead.

Digital CMO’s are experts when it comes to digital marketing, SEO, Social Media, Pay Per Click Campaigns, Artificial Intelligence powered data collection, influencer promotions, and finding ways to engage users on multiple digital platforms are all things that a Digital CMO will be knowledgeable about. This knowledge and experience helps them hire the right candidates, run the right campaigns, and put your company at the top of every user’s search page or on their social media feeds.

Having access to this experience at only the Fractional CMO hourly rate, is an invaluable asset to the success of your company. If you are looking for Fractional CMO services for your digital marketing team, a Full Service Digital Marketing Agency such as ComboApp will place you with a Fractional Digital CMO that is the right fit for your company.

Conclusion

Fractional CMO services offer an affordable and scalable way for a business to grow when they need to take that next step. These consultants are perfect for small to mid sized businesses with $2 million in revenue or more and an existing marketing team that is in need of executive level leadership. They will help you to put together the right team, enhance the abilities of talent you already have, analyze your efforts, and develop a marketing roadmap that will have your company on the right track.

If Fractional CMO services sound right for your company, ComboApp can help. We offer Fractional Chief Marketing Officers and Digital CMO’s that will fit your business, goals, and budget. Simply call us at 773.305.0886 or click on the Contact Us button in the header of this site.