Most modern companies have a CMO (a Chief Marketing Officer), but for various reasons, some don’t. They use a Fractional CMO instead.
Here’s why the term Fractional CMO has become popular in recent years and why the Fractional CMO model has become a powerful ally in modern marketing.
At the end of 2021, London had 20 million square feet of office space vacant. In New York, almost 20% of all offices are empty.
Businesses are going back to work but not back to the office.
Remote working has become normalized over the past 24 months, and the idea of a Fractional CMO is gaining immense popularity, particularly in digital-first environments. Start-ups are sometimes stretched budget-wise but still need the expertise of a CMO on deck.
What Does Fractional CMO Mean?
A Fractional CMO is simply a CMO who works as and when required on a retainer basis. They’re a genuine CMO who sits on and reports to your board to lead your marketing strategy, manage, and hire your junior marketing team.
They are a cost-effective, high-value service for businesses trying to make the most of their budget. As a valuable consultant, they bring the seamless integration and aligned objectives of a full-time marketing chief. Here’s how this service works and how it might be the right fit for your business.
How Does A Fractional CMO Work With My Existing Team?
A full-time CMO works with one company all the time. A part-time CMO works with one company, sometimes. A Fractional CMO works with several companies. Their expertise is shared... fractionally.
If you’re not ready to hire a full-time CMO, don’t like the idea of going down the agency route, or a project-by-project-based consultant approach, then a Fractional CMO is perfect for your needs. Experience and leadership, combined with rapid growth, and the ability to sit off the balance sheet, it’s a favorable option for any board.
Isn’t That Just A Consultant?
No, a marketing consultant is brought in from the outside and is sometimes kept out of key decisions. A Fractional CMO is wholly integrated and can be involved with the day-to-day marketing decisions of a business. A fractional CMO sits on and is an active, accountable member of your senior leadership team, even sitting on the board.
What Does A Fractional CMO Do, Day To Day?
Consider them a part of your executive management team focused on marketing. Everything a CMO would do but not employed full time. As part of your team, a Fractional CMO will bring innovative ideas and years of marketing experience.
This could also be an interim CMO role where the OKRs are already set, but for whatever reason, the CMO isn’t present, and the business needs short-term help. Or it could be ongoing efforts like:
- Revamping social media strategy
- Brand launches
- Lead generation
- Creating entire marketing strategies from the ground up
- Manage digital ads
- Managing marketing integrations
- Working with freelancers to achieve set OKRs
- Building frequent marketing reports
- Growing engagement of current channels, including email and social,
You Mentioned Above That Fractional CMOs Have Become Popular Recently; why?
Well, post-pandemic, all office-based roles are being reinvented. The trend had been happening for decades, but COVID-19 accelerated the uptick in work-from-home culture among corporate entities.
With the looming recession in the USA and Europe and energy prices reaching record highs, the fight to save money and energy is just beginning. Nobody is entirely sure when the disruption will end. Still, even when it does, corporate culture and even government legislation in some regards will constantly urge people to work from home.
Engaging a Fractional CMO can reduce cash burn rates and extend your financial runway. At a time when VCs are looking for strong leadership and growth with minimal overhead.
It makes sense that a Fractional CMO is part of that change.
An outsourced resource like a remote CMO will bring years of knowledge and experience, along with a pool of vetted freelancers. Someone with a deep understanding of business strategy and marketing acts as a low-risk investment to hedge against losing ground in the ever-changing marketing landscape.
Highly competitive channels like social media and email marketing require finger-on-the-pulse agility, something you can quickly lose while “thinking about” your vacant CMO spot.
Is A Fractional CMO The Best Option?
It would be easy to say yes to that question and move on, but let’s look a little deeper.
Option 1: Hire A Full-Time Chief Marketing Officer
This is the popular choice because, as with most things, people are used to it, and that’s how they’ve always done it. And even if you choose this option in the long-term, for right now, an interim CMO makes more sense than simply waiting for the right full-time candidate. Talent acquisition has become prohibitively expensive, with some executive search agencies asking for thousands of pounds/dollars to engage them and their network. This is another strain on the financial runway that’s getting shorter by the day.
Option 2: Hire A Consultant
Consultants have a place, but sitting next to your CFO isn’t it. The whole point of a consultant is to engage them on a limited basis for a limited amount of time. They won’t be able to integrate fully like a Fractional CMO.
Option 3: Hire An Agency
This is a popular option with larger businesses, but again, it’s an integration issue. An established Fractional CMO will seamlessly slip into your organization; an agency is more of an extension of your business and, while valuable, isn’t a replacement since the agency will still need guidance on deliverables from a CMO.
Of course, you could use some amalgamation of all three, but it still leaves you with the two main issues of integration and risk. It might be worth mentioning that larger corporations also engage Fractional CMOs as partners on a “Vice CMO” basis. Existing CMOs often engage a Fractional CMO to bounce ideas off. Acting as a soundboard, a Fractional CMO can help the existing team discover solutions to complex issues. Confidence in decision-making increases exponentially when the best right answer is found - not the first right answer.
What Key Indicators Should I Look For When Choosing A Fractional CMO?
This list might sound obvious, but it’s worth fleshing out the details. This is about hiring a CMO, after all.
You’ll need someone who:
- Has experience as a marketing leader
- Has experience in several marketing disciplines
- Can show a clear and concise process
- Can show experience offering the same Fractional CMO experience for other companies
- Will show up-front how they will help you before they’re hired.
- Has led agency teams, guided and selected agency partners
Is It More Cost Effective To Hire A Full-Time CMO Or a Fractional CMO?
In 2022, the cost of hiring a full-time CMO in the UK is around £102,451, according to Glassdoor. In the USA, Built-In has the figure at around $222,739 + $57,806 in additional compensation, so a total figure of $280,545 (that’s around £227,808.15).
The cost of hiring a Fractional CMO varies, but that’s a good thing. You can find a solution to suit your budget and time restraints.
An experienced CMO on a rolling three-month engagement will start at about £1,200 per day. As a direct cost comparison, that's an experienced, accountable CMO for x1 day per week for £62,400p/a. No National Insurance to pay, no sick pay, no recruitment fees, no equipment to buy - and a cost that sits off the balance sheet.
You simply can’t onboard a full-time Chief Marketing Officer and let them go in 3-months, not without good reason.
But you can engage a Fractional CMO for three months to test the waters and expand it incrementally to 6, 9 or 12 months (or more). It’s an interim option with long-term possibilities.
It's a unique model that can be made to work for your company.
Since a Fractional CMO is hired on an “as needed” basis, you’re not paying to have someone sit at an airport or have lunch with the staff. They work set hours for a set fee. The chief advantage, of course, is the flexibility it offers. Some will work on a partial performance-related basis against agreed targets and goals. Others will work for equity.
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