Fractional CMO Hourly Cost
What is the hourly rate for a fractional Chief Marketing Officer (CMO)? A good fractional CMO average hourly rate is $200/hr., while the best fractional CMOs may charge $300/hr. If they are charging an hourly rate of less than $150/hr., I would worry about the “help” you are receiving. It varies wildly based on the factors we will outline below. The average fractional CMO may or may not have as much experience as ours typically do. That said, if you are looking to hire a Fractional CMO, read on!
Fractional CMO Salary Range
Typically Fractional CMOs are not paid a “salary” or they wouldn’t be considered fractional. Generally it works better to have a fractional CMO working on a specific set of marketing initiatives, developing the marketing team and delivering on a predefined set of fractional CMO services. This creates clearly defined objectives, milestones and a timeline. That means it is more common to hire a fractional CMO based on a Scope of Work (S.O.W.) or on a project basis with predefined goals (OKRs and KPIs). True marketing leadership will embrace the challenge of measured deliverables within a timeframe.
Fractional CMO Flat Rate with Scope of Work
Based on my conversations with fractional CMOs, you should probably forget about a fractional CMO hourly rate. They tend to work on holistic scope projects and are paid based on the fractional CMO services they provide. For a deeper dive into fractional CMO services, please see our article titled “Fractional CMO Services“. To understand a project based S.O.W. with a flat rate, let’s take a look at what our fractional CMOs make with a regular full-time job. By understanding an average full-time CMO salary, we can better understand how it might roughly translate into a fractional engagement with a clearly defined S.O.W..
Full-time CMO vs Fractional CMO Salaries
Working in corporate, most of our Fractional CMOs had an average salary of $250,000 – $500,000 annually, plus benefits. As a middle of the road example:
Full-time Chief Marketing Officer Cost
$333,900 + 15% benefits = $384,000
Fractional Chief Marketing Officer Cost
$384,000 / 12 months / 50% of time = $16,000 / mo. x predefined number of months.
Obviously the big advantage here is that you can engage a fractional CMO to put a scalable plan in place in 4 or 5 months, then have a less costly team execute the plan. Bring the fractional CMO talent back as needed. You can access higher end talent than you could afford if you paid a year’s salary and you use that caliber talent much more efficiently.
What are the benefits of hiring a fractional CMO?
Opting for a fractional Chief Marketing Officer (CMO) offers several benefits over maintaining a full-time marketing team. Here are the key reasons:
Focus on Core Business: Being a business owner demands full-time attention, leaving little room for sales and marketing. A fractional CMO will allow an entrepreneur to concentrate on essential tasks while the marketing needs are expertly handled.
Comprehensive Go-To-Market Strategy: A fractional CMO helps develop a growth plan, crafting an actionable marketing strategy aligned with business goals. They evaluate campaign readiness and accelerate the marketing process, improving metrics.
Efficient Management: Marketing involves multiple components, making it challenging for small business owners to keep up. Chief Marketing Officers take charge, prioritize tasks, and train the team, ensuring effective execution.
Diversify Marketing Channels: An outsourced CMO brings expertise across industries, facilitating connections with experts and uncovering hidden opportunities for business growth.
Outside Perspective and Expertise: A fractional CMO provides fresh ideas, professional expertise, and valuable insights into market trends, enabling effective audience engagement and innovative marketing strategies.
Improve Communication and Efficiency: By offering management training and coaching, a fractional CMO enhances internal communication, ensuring efficient coordination between teams.
Enhance Hiring Practices: Fractional CMOs contribute to recruiting top marketing talent, offering guidance on job descriptions, interview processes, and talent retention strategies.
Choosing a fractional CMO empowers businesses to focus on their core operations, execute effective marketing strategies, and leverage external expertise to drive growth.
Choosing the Right Fractional CMO for Your Business
When it comes to small businesses, founders and CEOs often come from diverse backgrounds, but marketing expertise may not always be their strong suit. In the early stages of a startup, there is usually a strong focus on finding product/market fit, acquiring initial customers, and refining the product itself. As a result, marketing tends to take a backseat, leading to challenges such as lackluster product launches, difficulty reaching the target audience, and ineffective website messaging. However, as time moves on, small businesses eventually realize the need for a dedicated marketing team to address these issues.
Building an effective marketing department is a critical step that can greatly impact the success of the organization. It is important to learn from the experiences of seasoned marketing professionals who have navigated similar challenges. By leveraging their expertise, startups can make informed decisions and avoid common pitfalls.
One common mistake among founders is to view marketing as a monolithic discipline instead of recognizing its various specialties. Each marketer brings unique skills and strengths, so it is essential to identify the types of marketers that align best with the startup’s specific needs.
What is your GTM Motion?
Consideration should be given to the startup’s sales process when hiring a marketer. Depending on whether the company follows a product-led growth approach or relies on top-down sales, different types of marketers may be required. For product-led growth, marketers who excel in consumer-focused tactics like ads, email marketing, social media marketing, SEO, and SEM are essential. On the other hand, sales-driven companies targeting enterprise customers need marketers who can create educational materials, write case studies, and craft authoritative website copy.
Fractional CMO Services: Brand Marketing
In addition to these core pillars, brand marketing plays a crucial role in bridging the gap between creative-oriented product marketers and analytical growth marketers. Brand marketers can create campaigns that drive immediate sales while also building long-term awareness. They possess a mix of creative and analytical skills that can be highly valuable for startups.
When aligning marketing skills with the startup’s go-to-market strategy, it is crucial to assess the strengths and gaps within the founding team. Founders who excel in creative and design-oriented aspects may benefit from hiring a more analytically inclined marketer. Similarly, if a technical product requires better explanation, a technically adept marketer can effectively communicate its value.
Fractional CMO Services: Product Marketing
During the hiring process, it is important to evaluate the technical aptitude of product marketers. This can be done by conducting exercises like asking candidates to fill in the blanks for product pages or assessing their ability to understand and respond to customer support questions. It is also valuable to inquire about candidates’ elevator pitch for the last product they worked on and dive into their launch experiences to gauge their success in product marketing.
To attract a product marketing candidate, founders should ensure they provide a compelling product demo. Demonstrating the product’s functionality and value directly to the candidate can be more convincing than relying solely on the website or marketing materials.
Fractional CMO Services: Growth Marketing
When hiring a growth marketer, it is important to understand that this specialty focuses on optimizing the user acquisition funnel, user engagement, and retention. Growth marketers are well-versed in various strategies and tactics to effectively reach the target audience. They employ data-driven approaches and implement experiments to drive growth.
In conclusion, building the right marketing team is crucial for the success of a startup. Understanding the different marketing pillars and aligning them with the startup’s go-to-market strategy and the strengths of the founding team can help in making informed hiring decisions. Evaluating technical aptitude and past experiences are essential during the interview process. Lastly, providing a compelling product demo can greatly influence the decision-making process for product marketing candidates.
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When should a new business or startup bring in a Fractional CMO?
What is the Revenue Threshold?
When it comes to hiring a fractional CMO for your startup or business, timing and rationale play a crucial role. The decision depends on whether your go-to-market strategy leans more towards marketing or sales. For startups aiming to create a consumer brand or rely heavily on marketing-driven events like organic, paid, PR, and content, bringing in a fractional CMO around the time the team reaches 15 people and $5-10 million in annual revenue is recommended.
On the other hand, enterprise SaaS products often benefit from establishing a repeatable sales model before incorporating marketing to refine the story and explore new lead generation channels. This usually happens concurrently with solidifying the go-to-market motion and seeking a sales leader.
Beyond the Marketing Manager
To determine the right timing, businesses should consider several key questions. If you are like other businesses in this stage, you have a marketing coordinator or a marketing manager but no one with true CMO chops. That means the strategic directives have been coming from you, the business owner. Business owners need to assess whether they can create the kind of rapid growth they want by continuing to handle everything themselves, or if they need a real marketing leader.
Small Scope vs. Big Picture
Additionally, founders should evaluate whether the marketing challenges can be addressed by freelancers or agencies for smaller picture, limited scope projects. Do you only need a landing page designed? Your PPC campaign created? That’s a limited scope. On the other hand, if you want to see explosive growth and you want to lay the groundwork for future scalability, you need to look at the bigger picture holistically. That means a CMO. It may be more cost-effective to bring in a fractional CMO instead of a full-time CMO. As these projects accumulate, managing multiple freelancers can become time-consuming. A fractional CMO can create the systems you need for the ongoing coordination of marketing efforts.
A Question of Bandwidth
Considering the significance of marketing a successful product launch, startups developing physical products, particularly those with high price points and requiring distribution partnerships, packaging, and pricing, should consider hiring a fractional CMO early on. Founders focused on product development may not have the bandwidth to manage the necessary marketing work themselves.
Aligning headcount budget with marketing budget is another critical factor. It is essential to ensure that the planned marketing spend matches the expectations of the fractional CMO candidate. A mismatch in resources can make it challenging to attract the right candidate or lead to unfavorable outcomes. It’s crucial to consider the return on investment and make strategic decisions regarding budget allocation.
While a limited budget doesn’t necessarily rule out hiring a fractional CMO, it’s important to consider the specific marketing focus. Is it growth, brand or product?
Business owners should be prepared for the time it takes to find the right fractional CMO. Rushing the process can lead to unsatisfactory outcomes, so freelancers or agencies may be a viable option for immediate marketing needs.
To ensure a successful hire, founders must have a clear understanding of what they want the fractional CMO to accomplish. Defining the specific areas of focus, such as PR, brand strategy, product marketing, pricing strategy, and growth funnel optimization, is crucial. Avoiding the mistake of hiring the wrong type of marketer, just as you wouldn’t expect a backend engineer to handle front-end UI development, is essential.
Fractional CMO vs hiring a marketing agency: Which strategy is right for your business?
Choosing between a marketing agency and an independent consultant is a decision that requires careful consideration. Opting for the right independent consultant can often provide greater value for your money compared to a marketing agency or consulting firm. Here are a few reasons why:
Firstly, marketing agencies tend to have large teams with various departments that require continuous work to justify their overhead costs. As a result, the agency may steer your strategy towards solutions that utilize their in-house resources, even if they may not be the best fit for your specific needs. In contrast, independent consultants have the freedom to be more strategy and channel agnostic, focusing on what truly benefits your business without the pressure to feed a large machinery of departments.
Avoid the Comfort Zone
Furthermore, marketing agencies typically have preferred areas of expertise or comfort zones. For example, agencies with a strong SEO background might emphasize the importance of SEO, while those with a track record in PPC might push for a PPC-focused strategy. Engaging with a big agency that excels in every marketing channel might result in unnecessary overhead costs for resources your company doesn’t require.
No Bias = Fresh Insights
This is where independent consultants shine. By hiring an independent consultant, you gain access to fresh and unbiased insights. They are not influenced by external relationships with big-money partners like agencies are, nor are they tied to the internal dynamics and agendas of multiple departments within an agency. Instead, independent consultants prioritize making your business a resounding success by focusing on the right strategy rather than trying to fit your existing in-house team into a predetermined approach.
Another aspect to consider is intellectual property. Agencies often claim ownership of the campaigns they develop, meaning that any collaborative concepts or methods you create together could be used for other agency clients. While some agencies may be open to negotiating favorable agreements regarding intellectual property and non-competes, it’s essential to thoroughly review the terms. On the other hand, independent consultants generally pose fewer concerns regarding intellectual property.
Help Hiring Your Marketing Team
Ultimately, selecting the right team to execute your marketing strategy is crucial. Prioritize finding the optimal strategy first and then build your team accordingly, rather than basing your team composition on the resources you happen to have in-house. By engaging an independent consultant, you can benefit from their fresh perspectives, unbiased insights, and tailored approach to achieve the best possible outcomes for your business.
Do Fractional CMOs typically work in-person or virtually?
Fractional CMOs, like many professionals in today’s digital age, commonly work virtually rather than in-person. The nature of their role allows for remote work arrangements, leveraging technology and communication tools to collaborate effectively with clients and team members. Virtual work offers several advantages, including flexibility, cost-effectiveness, and the ability to work with clients located anywhere in the world. Fractional CMOs can provide their expertise, guidance, and strategic support remotely, making it a convenient and efficient option for both parties involved. However, there may be instances where in-person meetings or on-site visits are required, depending on the specific needs and preferences of the client and the nature of the project.
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Ready to talk about how a Fractional CMO can help your business? Click the button below and schedule a free strategy session.