What is a fractional CMO?
Do you think a team will perform better with a better coach, even if the players remain the same?
Do you think an orchestra will sound better with a conductor than they would without one?
Or that a building will be more likely to be on time and on budget with a great foreman?
That is what we see the role of a head of marketing is. The strategy and project management to make the best use of the talent around them and to achieve a better result.
The stage manager manages the pieces to ensure the show runs smoothly and is a hit.
Enough analogies yet?
Obviously, a great head of marketing is a very highly paid gig, and worth every cent. The average in Australia according to Indeed is $153,657
Bringing in a CMO adds a more strategic and longer-term vision to your marketing activity. Helping to set the business up for success to realise its long-term vision and goals, navigating the different scaling roadblocks along the way.
But the questions that growing businesses face are:
- When should we get one?
- What should we do if we’re not quite ready for one?
When should you hire a CMO?
Ideally when your company has gained market traction, has seen six to twelve months of consecutive growth, and started to gain a solid footing in success. You are now ready to shift focus to your longer-term vision and how you maintain growth at various stages of scale.
You’ve set up multiple marketing channels, you’ve optimised them to take advantage of all the low hanging fruit, and now seem to be reaching diminishing returns on optimisations.
Or a more simple answer would be when you can afford the 150k+ for a good one or when you’re currently spending enough in marketing and active in enough channels that it’s actually a full-time role.
But what if you’re not ready for a full-time CMO?
If you’re not spending over 100k a month in media, and you’re not heavily active in multiple channels, you may not be ready for a full-time head of marketing, so what are your options?
Well, you could:
- Hire someone that’s cheaper, maybe a marketing manager that is 70-100k a year
- Hire someone part-time, 2 or 3 days a week
- The business owner ends up being the head of marketing and the conduit between all agencies and 3rd parties involved in the implementation
Or, you could use a fractional CMO, who is the type of talent you would hire full-time for 150k plus, it’s just that they’re not working on your account full-time, you share them with another company or 2.
Why is a fractional CMO a better option if you’re not ready for a full-time role?
Marketing is far from an input=output environment. Everything in life is input = output minus efficiency. But the efficiency component in strategy work (of any kind, but especially marketing) is far more important than other services.
If you believe the statement below, then you will understand why this is often a better option:
Someone with more experience, a better strategy and more talent, will get a better business outcome in 40 hours a month, than someone with less experience, a worse strategy, figuring things out via trial and error and pure hustle who’s working 160 hours a month.
Either you believe that statement, or you don’t.
If you do believe it, a fractional head of marketing will make sense to you.
Otherwise, if you think you don’t need the strategy, the project manager/conductor/coach/foreman, and you can do that yourself, then you would just want the implementation and the work. You would just want to use agencies and freelancers that are great in their field of excellence.
My belief is that this is why most people fail when working with agencies.
Sometimes it’s the work quality that is at fault for a poor result, but often I believe the tactics and implementation were OK – but the strategy was never going to work.
The agency does not have the incentive nor the capability to handle the strategy, and the business owner does not have it either.
So both parties are working on tactics and implementation on something that is at the very least bound to be inefficient, and at worst completely fail.
The agency of course wants their fee either way, they did the work. It must be your product’s fault that it didn’t work right…
So the business owner is left holding the bag. With 100% of the responsibility and 100% of the costs.
This is especially the case when the business owner is a technician (e-myth book summary for context). Someone great at their craft, or with great product knowledge, but not a visionary entrepreneur.
So, how does adding a fractional CMO to this picture help solve the problem and prevent failure? First, let’s answer what they do.
What does a Fractional CMO do?
Well, our fractional CMO’s are trained in the below topics very thoroughly:
- Funnel/user journey strategies
- Collecting data, analysing data and conducting market research to assist with the above 3 in order to prioritise tasks that will have the biggest impact
Here’s what the tasks might look like in the first few months when we’re getting started on an account:
- Brand Positioning
- Competitor analysis
- Quantitative market research
- Qualitative market research
- Offering strategies (price, deliverables, bonuses, guarantees etc)
- Proposition Simplification (usefulness, ease of use, aesthetics)
- Network effect strategies
- Voice of Customer review
- Funnel analysis – tracking, analysis, UX
- Marketing plan – marketing mix, budgets, forecasts
Here’s what a typical month (after the first 3 months) might look like for a fractional CMO doing 25 hours a month:
- Weekly WIP meeting: 2 hours
- Reporting – 3 hours
- Funnel analysis across all channels – 10 hours
- Project management of 3rd party specialists (including hiring and firing of agencies and freelancers if required) – approving work, giving feedback, channel strategy & briefing tasks – 10 hours
Now, what impact does this have when these tasks are being completed by someone with a lot of knowledge? Compared to if you didn’t have that expense and simply paid for the delivery/implementation.
In one word, efficiency.
If I was to pick a second word, consistency.
It makes the tactics and the implementation more effective and efficient, but also keeping the brand represented consistently across channels, with each learning from the other.
Reducing wasted spend. Improving conversion rates, improving lifetime customer values, improving word of mouth. Improving overall ROI.
How to incentivise your fractional CMO:
If this fractional CMO is so good, I’ll pay them commissions once my business hits certain goals.
Great Idea! We’d love to do that!
You can only earn so much when you’re exchanging time for money right, so what really floats our boat is when clients are willing to incentivise us with commissions and a % of revenue if the business is doing well.
Here’s how a client might incentivise us as an example:
In this scenario, we are calling ‘gross profit’ total revenue, minus all marketing and advertising costs. We are not including product costs.
Once gross revenue hits X per month, commission payments of 5% of gross profit for the calendar month will be made on top of the monthly fee.
Total fees including commissions can be capped at $15,000 per month.
If you’d like to discuss our fractional CMO offering in more detail, and see if we have someone that would fit your product/service perfectly then please get in touch.