How Much Will It Cost to Work with a Fractional CMO?
If you’re evaluating whether a fractional CMO is right for your business, that is sure to be one of your first questions. Getting a clear answer to this question can be challenging because there are a variety of fractional CMO models that offer different levels of engagement, expertise, and pricing structures.
Let’s start with an average hourly rate. The average hourly rate of a fractional CMO is typically between $150-375 an hour. Some fractional CMOs charge by the hour and others work on a retainer for a dedicated number of hours per week/month.
According to HubSpot, it is estimated that a company can save up to 74 percent from hiring a virtual or on-demand CMO versus a full-time employee. Without the overhead of a full-time CMO, you can still have the same level of expertise and results. A full-time Chief Marketing Officer is expensive; their average annual total compensation, including base salary and cash bonuses, is often between $170,000 - $300,000 a year depending on the industry and size of the company. The actual cost is typically much higher once you factor in recruitment costs, benefits, and stock options or equity.
Bringing in that same level of expertise part-time should be less expensive. However, thinking of a fractional CMO simply as a fraction of the cost of a full-time hire can limit their value and impact on your business. Fractional CMO Companies describe working with Fractional CMOs this way, “The benefit of working with a fractional CMO is more than the dollar-for-dollar cost savings. These fractional CMOs “flying overhead” are much cheaper than hiring a full-time CMO and can offer considerable wisdom to small businesses.”
Not all fractional CMO models are created equal, so different models require different value assessments.
Part of the value equation of a fractional CMO is factoring in how quickly the executive can make a notable difference to your business. A full-time hire requires considerable expense to onboard and get them up to speed. Fractional CMOs should drive quicker impact and be less risky than a full-time hire.
There’s a high cost to not having an experienced marketer at the helm.
One of the most painful and expensive lessons we’ve seen clients learn is the cost of not having an experienced marketer. Without clear marketing direction, leadership, focus, and accountability, businesses often burn through their resources without knowing what’s working and what’s not.
There’s a significant opportunity cost associated with waiting to bring on a marketing leader. If you’re not a marketing expert yourself, the truth is you’re probably missing out on a lot of opportunities a new CMO or director of marketing would spot.
Do you want to know the most common excuses for waiting to bring on a CMO? Founders and executives have concerns about the expense and the commitment involved in a full-time C-suite hire, which is why a fractional CMO is so valuable. They offer you the proper guidance, direction, marketing initiatives, and strategies to meet your goals and boost the return on your marketing spend — but they’re also flexible hires, whose hours (and fees) you can scale up and down as needed.
What should you focus on when hiring a fractional CMO?
It’s simple and comes down to three criteria: your budget, professional expertise, and culture fit.
BUDGET: This one is straightforward. You probably already have an idea of what you want to spend on marketing. Your budget for a fractional CMO will need to be factored in addition to a designated amount for ads. For a fractional CMO, you’ll want to set aside between $3K-8K per month or $96K per year.
PROFESSIONAL EXPERIENCE: While anyone can call themselves a fractional CMO, there will be a difference in the results that you get when you work with someone who has experience aligned with your goals. Be realistic about what you need and the expectations you have for someone in this position. If you expect this person to do “everything”, something will be compromised. Is industry experience truly a requirement? Do you need someone who has experience with pitching investors, or taking a company public? Remember, a CMO is intended to lead the strategy, adapt it as needed, and manage the team responsible for executing it. Omicle is also proactive in aligning sales and client experience for a consistent brand experience.
CULTURE-FIT: You may not realize how often you’ll be working with your fractional CMO. Anytime there is a marketing, customer experience, or sales question your fractional CMO should be the first person you call. You and your fractional CMO will also need to be able to share uncomfortable truths with each other—After all, the first step toward solving a problem is recognizing that you have one. The more open you can be with each other, the better your chances are of finding solutions.
Omicle works with organizations to connect their operations to outcomes that serve brand, marketing, and revenue goals., contact us today to get started.
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