A fractional Chief Marketing Officer (CMO) is a fully qualified CMO who works on a part-time or project basis for one or more companies. It's a beneficial alternative for companies that need someone to lead their marketing department but can't afford to spend upwards of $300,000 annually for a full-time CMO.
A fractional CMO is more than a cost-effective leadership strategy. For a fraction of the cost and commitment of a typical CMO, you also get cross-industry experience and perspective. These professionals are equipped to do more with fewer resources so that you can grow rather than simply maintain the status quo.
Assuming you need one, a fractional CMO can help grow your company's revenue using existing resources faster than a more expensive full-time CMO. It is a complete financial, mental, and execution shift from what it means to be a CMO.
Fractional CMO Roles and Responsibilities
You can assign fractional CMOs the same roles, responsibilities, and key performance indicators (KPIs) as an in-house CMO. The value the former brings is that they've likely worked in countless industries, helping execute tasks with a disruptive mindset and industry-specific wisdom.
The following is an overview of what fractional CMOs can do for your company:
- Marketing Strategy: These marketing executives define the principles, goals, and audience your marketing efforts will target based on the business's needs. The recommendations will have the quality of a full-time CMO but come from someone relatively free from internal politics.
- Campaign Planning and Execution: Fractional CMOs can own or direct the execution of marketing campaigns. Because of the limited nature of the engagement, they often focus on bringing revenue faster than in-house ones to prove their worth.
- Marketing Analytics and ROI Analysis: Fractional CMOs track marketing plans’ performance and budget report on ROI.
- Team Leadership and Mentorship: Having had access to many teams across industries, fractional CMOs can assess your team's strengths and weaknesses and provide innovative ways to double down on what you excel at.
- Marketing Technology and Tools Management: Fractional CMOs are exposed to tools known in one industry but not others. They can introduce your team to them and gain a competitive advantage that your competitors might not know exists.
When Should You Hire a Fractional CMO?
In our experience working with fractional CMOs and acting as them, we believe the following are signs you need to hire a fractional CMO:
- You need to scale
- You have a team to execute
- Ready to disrupt your industry
- Suffering from analysis paralysis
- Need CMO knowledge at a lower cost
- Projects aren't profitable or take too long
- Can't afford the risk of an unprofitable project
- You need to generate significant short-term revenue
We presented these signs in "vague" bullet points so you could quickly scan if reading the rest of the article makes sense. If you are not going through any of these signs, chances are you don't need a fractional CMO, and this is the end of the article for you.
But if you are in one or more of these situations, or are unsure if you are, keep reading as we develop each point in the following two sections.
When Not To Hire a Fractional CMO: A Real Case Study
Our interactions with CMOs, fractional CMOs, and experience in both roles tell us that companies that aren't ready to execute shouldn't hire a full-time or fractional CMO. The following case study shows why.
Like many venture-backed startups, Mednition's marketing consists of one person who gets outside help. Ryan, the person acting as the CMO, could think and execute and provide all the benefits of a CMO. But he didn't have the capacity or team to do it. So he constantly had to figure out who would write, create content and its strategy, provide technical support, and build nurture sequences, among other marketing tasks. The answer was often, "No one but you, Ryan."
Through O8's fractional marketing team services, Mednition immediately accessed industry veterans who could execute every marketing project their marketing leader needed. This included redesigning their homepage, owning their SEO and content strategy, improving user experience (UX), running Account-based marketing (ABM) ads, and setting up their Google Analytics and HubSpot dashboards. These were all activities where Ryan needed a team with the capacity and knowledge to develop and execute.
While you don't need all these roles covered before hiring a fractional CMO, only having one or two of them might be a sign that you need more help than a fractional CMO
If your team consists of C-level industry veterans like ours, you could have executed the tasks we led in collaboration with a CMO like Ryan. But if you need someone to execute, we'd suggest hiring those roles first and then bringing on a fractional CMO.
For those of you with a team to execute or that can afford a fractional CMO and a fractional marketing team let's dive in a little deeper.
What Are the Benefits of Hiring a Fractional CMO and the Differences Between Them and a Full-Time CMO?
While a fractional CMO is, in theory, a CMO that works fewer hours, in practice, this part-time and project modality delivers unmatched benefits. A few of those include.
1. Bias toward short-term financial results
Fractional CMOs have less time to work than in-house ones, but they know you will hold them to the same standards as a full-time CMO. So they skip nice-to-haves and focus on improving critical areas that will bring short-term revenue to prove their worth. They can later use that new revenue to fund mid and long-term initiatives.
2. Low-risk, high rewards
Fractional CMOs don't demand a long hiring cycle, onboarding, or contractual obligations. You can throw them into the field from day one, see how they perform, and cut the relationship if it doesn't work out. In contrast, if the engagement goes well, you will enjoy the benefits we have described (and will keep sharing) at a fraction of the cost of a CMO.
You could hire an in-house CMO fast and fire them just as fast. But this would bring legal complications, severance expenses, and other regulations. Meanwhile, your finances take a hit, and the marketing team loses a leader.
3. Faster thinking and execution
Fractional CMOs usually work with more than one company from more than one industry at a time. They do that knowing they need to meet the expectations of a CMO in every single engagement. As a result, they are often faster at planning, executing, and iterating marketing initiatives than full-time CMOs who spend a few years on a company before moving on.
There are agile in-house CMOs. But they are unfortunately affected by their full-time employee status. For example, suppose your business needs to solve a pressing problem fast. In that case, the last thing you would want to do is spend the next three months interviewing and onboarding a full-time CMO.
4. Cross-industry innovation
Fractional CMOs are constantly exposed to new tools, processes, and strategies in their capacity, particularly given their exposure and vast experience. This knowledge speeds up, cheapens, or improves how you operate.
For example, among tech companies, it's now common to use AI. to write faster. But these tools are less known in the healthcare industry. If your healthcare company hires a fractional CMO with a tech background, they could improve the speed and quality of your processes through AI. By the time your competitors discover this tool, you will have moved on to others that are obscure in your industry but not in others.
Innovation extends beyond tools. Fractional CMOs can also help you solve persistent internal challenges. When we act as fractional CMOs, we often find communication, collaboration, and strategy gaps in our client's teams. These have often plagued the team for years. Still, no one notices because they are caught up in standardized processes and day-to-day activities.
Newsletters, networking events, and the news can expose full-time CMOs to other industries. But they'll only learn mainstream forms of innovation and what they should do, not how to do it, which you can only learn in the field.
Fractional CMOs work part-time or on a project basis at a lower cost than full-time CMOs. This lower investment allows you to use the extra budget for other initiatives, cut risk, and save for future investments, as marketing campaigns bring revenue.
Your financial team will also manage their budget more efficiently. They will know when the fractional CMO will work and how much that will cost. There are no surprises, such as unexpected 15-day notices.
6. CMO knowledge for smaller companies
Companies in the early stages of growth often need a CMO figure. For their needs, it makes sense to hire a team focused on execution. The cost of a CMO is also often outside of their budget. If your company earns $1M annually, it is hard to justify hiring a full-time CMO for $250,000 annually.
But even though you might not need a full-time Chief Marketing Officer, you need someone to own marketing leadership and guide your growth to the next level. These activities involve creating and accelerating your marketing funnel, hiring talent, acting as the bridge between the marketing team and the rest of the organization, nurturing strategic relationships, and managing budgets. A fractional CMO can fulfill these tasks at a fraction of the cost.
7. Ability to execute everything
Having too many options can reduce your ability to make decisions. If there are twenty gelato flavors, you'll spend more time choosing one than if you could only have vanilla. The same happens with full-time CMOs: if there are dozens of projects to start, which one do we start?
We've seen the time constraint of a fractional CMO lead to faster, more profitable projects that reach the finish line. It forces teams to align ideas, resources, and levels of commitment into one or two projects at a time. These projects often fall under the following categories:
- Aligning with the C-suite
- Leading the marketing team
- Handling branding, P.R., and trademarks
- Recruiting and training new team members
- Improving and optimizing clients' online presence
- Driving positioning, segmentation, and messaging
- Preparing marketing materials for future funding rounds
- Developing campaigns for customer retention and loyalty
- Creating programs for prospect onboarding and nurturing
- Establishing the marketing and sales automation infrastructure
- Managing paid and organic search and social media marketing
- Setting up content marketing and thought leadership initiatives
- Managing product pricing, go-to-market strategies, and launch activities
How Much Does a Fractional CMO Cost?
The cost of a fractional CMO can vary depending on several factors beyond just the number of hours they work and their hourly rate. Some standard variables that influence the cost are:
- Experience and Expertise: More experienced fractional CMOs, particularly those with a successful track record and extensive industry knowledge, may command higher fees.
- Scope of Work: The scope and complexity of the marketing projects or initiatives the fractional CMO will be responsible for can impact the cost. Projects that require significant strategic planning and execution may be priced differently than smaller, more tactical assignments.
- Engagement Duration: The length of the engagement can affect the cost. Longer-term arrangements might offer more favorable rates compared to short-term projects.
- Company Size and Revenue: The size and revenue of the company seeking the fractional CMO's services can be a factor. Fractional CMOs might charge more to companies with higher revenue because there's more risk involved.
- Market Demand: The demand for fractional CMO services in a specific industry or location can influence pricing.
Get a CMO Without the Full Time Expense
O8 gives you access to fractional CMOs and a team of marketing experts ready to bring any campaign to life. Unlike traditional marketing agencies, you'll never deal with generalists or people learning on the job.
For example, if you needed a CMO to launch a nationwide ad campaign, you would receive help from our VP of Digital Marketing, Andy Keith. Someone who can successfully lead that work, just as he has directed marketing projects for companies such as the U.S. Treasury, Verizon, and Spectrum Health. You will have equally skilled executioners ready to take every project from A to B alongside Andy.