Gain from big-company marketing strategies while maintaining small-company agility. Most small and medium-sized business (SMB) owners started their own business because they didn’t like the large corporate environment. But that comes at a cost.
SMBs typically can’t afford a full time executive to provide the marketing leadership and manage the marketing department. Larger companies have a chief marketing officer (CMO) who drive the marketing strategies and marketing initiatives. But the average pay for a full time CMO is more than most SMBs can afford. For example, the average pay for an experienced CMO in Austin, TX in 2023 is $313,000 according to Glassdoor. Fortunately, for SMBs, there’s another option.
Fractional CMOs bring the marketing leadership to SMBs at a fraction of the price of a full time marketing executive. They are an experienced marketing professional that bring a comprehensive marketing strategy at an affordable cost. It’s a way for SMBs to access marketing talent that’s normally out of their reach.
What Is a Fractional CMO? What do they typically do?
The most essential function of the fractional chief marketing officer is to create and oversee the marketing strategy. The greatest value a fractional CMO brings is the strategy. While they may oversee execution, their primary role is strategy.
The role of CEO isn’t to execute tasks. The greatest value the CEO brings is leading the C-Suite executives to accomplish the goals of the business. Similarly, chief marketing officers are not focused on task execution. Instead, the chief marketing officer provides direction for the marketing team to do the execution. Sometimes it’s an in-house marketing team. Sometimes consultants and contractors support the internal marketing team.
Fractional CMO Services – The Marketing Strategy
The marketing strategy starts with the brand strategy. And the brand strategy is much more than colors, logos and fonts. At it’s core, branding generates an emotional response within potential customers when they encounter elements of the brand.
Imagine trying to describe James Bond strictly by the clothing he wears. James Bond can’t be explained or experienced by describing him as a navy blue suite with a white shirt and cuff links. That misses the most essential parts that make James Bond interesting. When you reduce branding to fonts, colors, and logos, you’ve made the same mistake. Fonts, colors, and logos are simply the clothing that is wrapped around the brand.
Just as James Bond has a personality and a persona, a brand has the same. The job of the chief marketing officer is to manage the personality and persona of the company. That needs to be reflected in every touch the company has with the customer.
I’m harping on branding because many owners are focused on the wrong thing. When I hear, “Just make the phone ring,” I know it will be difficult to help that company. They are unwittingly asking for direct response marketing. Direct response means you get the customer’s attention, you make an offer, and they accept the offer. You may want exactly that, but it’s not the formula for long-term success.
Direct response is intrinsically transactional. The longevity of the relationship ends with the transaction. Branding is intrinsically relational. It is a better long-term strategy because of the emotional bond created with customers. The James Bond franchise has flourished for more than a half-century because of the meticulous curation of the brand.
Once they understood the brand, the Bond franchise was able to insert Sean Connery, Roger More, Timothy Dalton, Pierce Brosnan, and Daniel Craig into the role. Through all of those actors, the brand remains the same. Similarly, once your brand is clearly defined, employees can come and go, but the brand remains the same.
Yes, there are other things the CMO should do. But the creation and curation of the brand strategy is the most important marketing function of the fractional CMO.
A Full-Time CMO Doesn’t Always Make Sense
Full-time CMOs are expensive. At larger companies, a full-time CMO has multiple initiatives to manage across different divisions. It’s a complex job that requires full-time attention.
SMBs are smaller with fewer initiatives. Not only is a full-time CMO a heavy expense. But it will also be hard to keep a seasoned marketing executive busy enough to retain. A full-time CMO will get bored and leave. Fractional CMOs represent multiple businesses which keeps them engaged at the level of problem solving they need to stay satisfied. This gives another advantage to the small business owner.
Working with a diversity of clients gives fractional CMOs both more experience and more diversity of solutions to make an impact in your business. History is full of examples where a solution used in one industry revolutionizes another industry. Henry Ford didn’t invent the assembly line. It had already been invented in the meat industry. Ford simply reapplied that idea to the auto industry. His rewarded for that and became America’s first billionaire.
Fractional CMOs bring a diversity of industry knowledge that unlock similar opportunities for business owners.
Part Time CMO, Full Time Results
As mentioned above, most smaller businesses don’t need a full-time CMO. And they’d have trouble retaining a good one because of the limited scope of work that excites a high-level strategist.
Typically, it’s few insights that move the needle in big ways. In a recent engagement, I was working with a team that has a great service and a great team. The leadership team has decades of success but is struggling to launch a new service. Within 30 minutes, we were able to identify that their problem is messaging. Their go-to-market strategy used the language of late adopters. It was failing and they weren’t gaining traction.
Without a doubt, they needed the insights of an experienced marketing expert. While it’s an easy problem for a fractional CMO to identify, they would have spent years trying to discover that on their own. Or worse yet, they would have run out of money before they did. This company didn’t need a full-time CMO. It only took 30-minutes to identify the problem.
Once that’s identified, their greatest need is ongoing guidance on messaging to keep them on the right track and speaking to their ideal customer. That’s not a full-time job. But it delivers full-time results because the existing marketing team can continue to execute, but with the benefits of the effective messaging to grow their business.
How Much Does a Fractional CMO Cost?
While we’re talking about part-time work for full-time results, we should talk about costs. Some fractional CMOs bill by the hour. Others do not. Fractional CMO services are not some simple task list. If you’re going to hire a fractional CMO, you want them to bring executive experience and insights to help set your strategy.
A good fractional CMO with a strong track record will probably not charge by the hour. That’s because they understand the value they’re bringing to your organization. Lawyers are the only profession where they believe their value is proportional to the time they spend on your case. I’d argue the opposite.
The difference between a good Fractional CMO and an average fractional CMO is the speed they deliver insights that change the trajectory of your business. The faster they see what needs to be done, the more valuable they are. So, if you’re hiring a fractional CMO, be careful of the ones who focus on their hourly rate.
A Fractional Chief Marketing Officer is a Flexible Fix for Headless Marketing Teams
Some businesses have no marketing department. Others have one or two people working on the marketing efforts. Sometimes it’s the business owner driving the marketing strategy. In each of those cases, a fractional CMO brings marketing leadership to achieve the company’s goals.
If the existing marketing team has both the skills and the capacity to execute the marketing tasks, then the fractional CMO is simply another member of the leadership team to provide strategic leadership. The inhouse marketing team simply executes on that strategy.
In other cases the company needs heavy support in executing the marketing campaigns. In this case, it depends on the capacity of the fractional CMO. Some fractional CMOs only provide strategic leadership. Others have teams that can help with the marketing efforts.
In those cases, it’s important that the marketing function is clearly defined. That sets up everyone for success. The in-house marketing team needs clearly defined responsibilities. They also need to see the fractional CMO as a resource that will enable them to excel at their job. It’s often easy to see the fractional CMO as a threat or an indictment of their abilities.
What Does a Fractional CMO Do Different from a Marketing Agency?
The lines between fractional CMO and marketing agencies are often blurred. The easiest line of differentiation is the typical fractional CMO is focused on strategy. The typical marketing agency is focused on execution of that strategy.
But you’ll often find agencies that are strong in strategy. And you’ll find fractional CMOs that have a team that do execution. Before you hire a fractional CMO, you should create a list of the activities and put names by each activity. Identify gaps and who will fill those gaps. Your list should include:
- Mapping the business objectives to marketing campaigns.
- Structuring the marketing campaigns.
- Marketing operations.
- Marketing automation.
- Content marketing.
- Digital advertising.
- Non-digital advertising.
- Lead generation.
- Graphic design.
- Market research.
Once you identify the gaps, talk to a fractional CMO about who will fill those gaps. Small businesses will discover they have many gaps. Mid-sized businesses will have fewer gaps. Anything that is outside of the fractional CMO services agreement needs to be filled. You can do that through a new hire, an agency, or a contractor. Just be clear in the communication to the whole team. There can only be one marketing leader. Without that clear communication, it will create frustration and your business objectives won’t be achieved.
What makes a good Fractional CMO?
Good fractional CMOs are business leaders with a strategic mindset. They’ll have a clear vision for the content marketing, digital marketing, and marketing goals for the organization. They will bring a fresh perspective and a proven track record. Good fractional CMOs work well with your entire organization. They are there as a member of your management team to drive growth for your company.
If you’re a smaller organization, they’ll probably identify that you need clarity and refinement on your target audience. Many businesses start by selling to whoever will buy. The job of the fractional CMO is to make sure you are focused on customers who make you the most money. You’ll see them focus on the unique challenges of your ideal customer. This may initially be frustrating because you believe you serve more people. The problem is most businesses have too broad of a message. And in a competitive marketplace you want to have a narrow message for your target audience.
Marketing KPIs Should be Few, Clear and Focused on Sales Growth
Your fractional CMO should bring more clarity to your life… not more confusion. As a marketing leader, the fractional CMO will focus on a few high-level key performance indicators. It’s often just a handful of marketing KPIs.
Unfortunately, it’s easy for businesses to get bogged down in dashboards that answer everything while clarifying nothing. One of the most valuable services a fractional CMO can bring is to remove the clutter and simplify. One of our favorite reports is the Pipeline Report. The Pipeline Report is a simple report that breaks down your entire customer journey from first-touch through and after the sale.
We’re strong believers in 30-second dashboards. These are dashboards so simple and so powerful that it’s the first thing that the entire leadership team reviews at the beginning of their day. We believe measurement done right is a growth strategy. You can read more about that in our article, How to Build an Effective Marketing Dashboard: Tips and Best Practices.
Do Fractional CMOs Typically Work in-Person or Virtually?
Fractional CMOs can work in-person or virtually. They can also do a hybrid. It really depends on your needs. Obviously, they are fractional, so they won’t be in your office full-time. They need to integrate with your existing marketing team, so there should be some in-person contact.
The counterpoint to that is there are companies whose entire organization works remotely. So, if that is possible, having fractional CMO services work virtually is also possible. It really comes down to your needs and preferences combined with the way the fractional CMO likes to work.
When your marketing isn’t moving the needle, hire a fractional CMO
This probably sounds obvious…
But if what you’re doing isn’t working, you need an outside perspective. A fractional CMO is a marketing leader that brings a fresh perspective without creating a new marketing function. They’re skilled at helping companies scale. You don’t need to make a big commitment. One of the advantages of hiring a fractional CMO is it doesn’t increase the headcount and you don’t need to pay them severance.
What You Should do Before Hiring a Fractional CMO
Starting with a fractional CMO can feel like a chicken and egg issue. You don’t know what you don’t know. That’s where their expertise is valuable. Ultimately, I’d start with the list above of the different roles and write a name next to each role. As the owner, president, or CEO of your business, your name shouldn’t be next to any of those items.
Use that list to drive discussions with potential fractional CMOs. Make sure they have a good track record of setting marketing strategy. That’s their greatest value to you. Then figure out who will fill in the gaps in your list and who will replace your name on that list.
At allies4me, we begin every engagement with a mini-project that has no follow-on commitment. We do that for a few reasons. First, we’re not a fit for everyone. Nor is everyone a fit for us. We consider the mini-project to be a coffee date to see if it makes sense to move forward. During this mini-project, we identify what you have in place, and what is missing. Then we propose a plan to fill the gaps. At the end of that, there’s no commitment for anyone. If it makes sense to everyone to engage further, then we do. If not, then it ends there.
Please reach out if you want to explore this further. Good luck as you chart your course for sustained growth.