When Is A Fractional CMO The Right Choice For Your Business?

Fractional or interim CMOs are a common choice for startups and small businesses that can’t yet afford or don’t yet need a full-time CMO. In the earliest days, many businesses don't have 40 hours of CMO-level work each week, and fractional services can be a way to get the benefits of CMO experience for less than the salary of a full-time employee. However, this is just one situation in which fractional CMOs can help. 

Have you considered what a fractional CMO can offer to established enterprise-level businesses?

While some fractional CMO services focus on covering the basics for small businesses, others are designed specifically to take successful businesses to the next level.

So, is a fractional CMO the right choice for your business? What can they offer that you won’t get from a full-time CMO?

In this article, you’ll learn:

• What the term “fractional CMO” really means
• How a fractional CMO works
• Why so many businesses are looking for fractional CMOs
• When to consider working with a fractional CMO
• The benefits a fractional CMO can bring to the table
• When a fractional CMO won’t fit the bill

What is a fractional CMO?

A fractional CMO — also known as an interim CMO or outsourced CMO — is a third-party service provider who works with your business on a part-time or temporary basis and handles the same tasks as an in-house CMO. Most fractional CMO services work with multiple different organizations at the same time.

How does a fractional CMO work?

The term “fractional CMO" is an umbrella that covers a lot of variation.

Each service offers a different range of tasks, but this often includes:

• Developing marketing strategy
• Monitoring and reporting on marketing performance 
• Leading and mentoring marketing team members
• Presenting to the board
• Collaborating with other departments - Sales, Customer Success, Product
• Advocating for marketing in high-level business decisions

Fractional CMOs can be individuals who work as freelance consultants, businesses that outsource CMO work to one of their executives, or solutions that use a team of consultants to handle the tasks.

A fractional CMO service might charge upfront for a fixed-term project, have a monthly retainer, or charge hourly rates. Some services offer short contracts of 3-6 months, while others have contracts that span several years.

Why so many businesses are looking for fractional CMOs

More and more businesses are using fractional CMOs — and not just at the startup stage. The current business climate has created an environment that suits the fractional CMO model. 

The rise of digital marketing means the demand for leadership-level digital expertise far exceeds the supply. As a result, hiring a full-time CMO with the digital experience you need can take months. In the meantime, while you’re looking to hire, you’re likely missing out on revenue: in a CMO Council survey, 86% of respondents ascribed missed revenue and growth opportunities to a lack of resources or capabilities. 

Working with a fractional CMO gives your business instant access to their digital expertise, without the delay of a hiring process. They can keep your growth on track while you’re finding the right fit for a permanent CMO position.  

Most fractional CMOs work with businesses remotely, which might have been seen as a drawback in the past. But with the rise of remote working over the last few years, a virtual CMO solution is not just an acceptable alternative — it's often a more convenient way to operate.

When to consider working with a fractional CMO

For enterprise-level businesses that have money to invest in growth, there are several common indicators that a fractional CMO would be a positive addition: 

• The business is in a period of rapid transition and Marketing needs more guidance. Handling mergers, acquisitions, and steep growth targets requires confident leadership. A fractional CMO can bring years of experience in these scenarios during the period you need it most. 
• The marketing team is working flat out, but they’re still missing targets. The existing marketing team is likely lacking key skills, or may just be understaffed. A fractional CMO can bring a new set of skills while also helping to build out a more complete marketing team.
• You’ve been trying to hire a CMO and you haven’t found the right person yet. Don’t settle for a sub-par candidate just to fill the role. A fractional CMO can hop on board in the meantime and during the onboarding process. 
• Marketing is performing fine — but you’re not seeing growth. If your existing team is tied up with day-to-day execution, you could be missing a big strategic opportunity. A fractional CMO can bring an external perspective and look at the big picture. 
  
  

How much does a fractional CMO cost?

Because you’re working with high-level executives who come battle-tested and ready to start right away, you’ll usually have to pay a premium for a fractional CMO’s time. Depending on the scope of the project or the number of hours you want to work with them, a fractional CMO service might end up costing more each month than the salary of an in-house CMO. 

However, it’s important to consider the value you get for your fractional CMO fee.

Yes, you’re paying for someone who can handle CMO-level tasks. But with a fractional CMO, your fee also gets you the following benefits.

The benefits a fractional CMO can bring to the table

Get CMO support, without the wait time

If you've ever gone through the process of hiring a new CMO, you'll know that it can be a lengthy and expensive process. On average, the process to hire a new C-level employee costs nearly $15,000 and takes over two months. After that, you’ll need to allow another three months or so to onboard the new employee. 

Of course, you can rush through this process, hiring the first candidate who checks off your list of ‘must have’ skills and packing their onboarding into a handful of weeks. But this decision can cause far more problems down the line. When you put the wrong hire in a CMO role, they might make decisions that slow down revenue growth, cause other team members to leave, or even cause lasting damage to the company's reputation. The U.S. Department of Labor estimates the price of a bad hire to be around 30 percent of the employee's first-year earnings. 

Alternatively, you could train up a VP of Marketing to take on the role of CMO. The modern CMO has to play a variety of roles, including sales leader, financial steward, and brand builder, and the learning curve can be a steep one. Nurturing someone to confidently take the reins can take months or even years, and that training process requires a CMO with the time, skills, and experience to guide your CMO-in-training. 

In short, finding the next permanent CMO for your business can be a long and complex process.

However, unlike permanent employees, working with a fractional CMO doesn’t involve a lengthy hiring process — partly because there is no long-term commitment if you realize they’re not the right fit. The consultants you work with are already established executives who can hit the ground running with only minimal onboarding to your company’s processes. In a survey run by CMO Council, 47% of CMOs stated that the fast ramp-up time was a top benefit of fractional CMOs. 

Source: CMO Council.

Get strategic oversight and big-picture thinking

If your marketing team is working flat-out to execute on campaigns and keep the demand gen engine running, the idea of pausing, taking a step back, and rethinking your entire strategy might seem like a distant dream. But without a bigger picture view, you won't know if you're throwing money and resources at inefficient channels while missing out on opportunities that offer better ROI. 

Let's say a company attends three events every year. As soon as one event is complete, the marketing team has to start preparing for the next. They've been attending this combination of events for the past five years because they generate around 10 new customers each year. The easiest option here is to continue working the events because, at this point, the team's involvement is a finely tuned machine, and they know this channel delivers deals.

However, what if this isn't actually the best approach? A fractional CMO has the time, experience, and impetus to give a big picture view of how your go-to-market strategy is performing and where you need to make changes. This usually involves analyzing conversion metrics and ROI, reviewing the various options, and making detailed recommendations. 

For instance, a fractional CMO might uncover that two of the events the example company attends generate four leads each, while the other event only generates two leads. They find that one of those more productive events takes twice as much work to prepare for than the other, making the ROI significantly lower. Plus, while the marketing team has been focusing on these events, they're also getting good results from paid media campaigns for very little effort.

In this situation, it seems a no-brainer to focus on the one event that has a good ROI and redirect the rest of the event investment to paid media instead. But without the perspective of the fractional CMO, this change in strategy likely wouldn't have happened. Bringing in a fractional CMO gives you the bandwidth you need to get a strategic view without sidelining existing priorities.

Get extra leadership support 

Many businesses work with a marketing agency or bring on freelancers to help plug gaps in their SEO, paid media, content, or PR. These services are a great way to get more firepower in the areas you need it most and to free up your in-house marketing team. However, these services won't give you more C-level support or help lead your team.

Freelance and agency marketing services are usually removed from the reality of your day-to-day business. You send over the projects you need them to complete, and they'll maybe check in with their point of contact on your team once a week or even once a month. Even if the people working on your projects are CMO-level, how can they offer leadership when they're so far removed from your team?

Fractional CMOs are outsourced service providers, but unlike other agency services, fractional CMOs work closely with Marketing. They get to know all the relevant members of your team, have more regular check-ins, and work with the CEO and investors. As a result, they can guide Marketing in the right direction, advise and coach team members, and get involved with key business decisions. 

Get the benefits of specific skills and experience

Your CMO might be incredible at what they do — they might be a reliable leader, an effective communicator, and have an eye for growth opportunities. But no one can have experience in every situation that may come up. 

Let’s say that your company acquires another business and decides to merge the brands and marketing teams. This is a huge undertaking, with dozens of tasks that need to be handled efficiently and sensitively. In this situation, it would clearly be beneficial to work with a CMO who has experience successfully managing mergers. If your existing CMO doesn’t have this specific experience, you could try to replace them with a different CMO who does — but this means more upheaval for the team and it’s another moving part that needs to be managed.

Instead, you could choose a fractional CMO who has experience in similar situations. You can pick from a range of expertise that may not currently be available on the hiring market, and find someone who has proven themselves in this area. The fractional CMO can support you through the transition and work with the current CMO to equip them to handle this situation in the future. When the time is right, the fractional CMO will move on and the in-house CMO can continue the great job they were doing before.

Get an external perspective

Sometimes, you can be too close to a situation to make the right decisions. It’s hard to objectively assess where the team is underperforming when you see the effort they put in day to day, and everyone has pet projects they are convinced will work with just a little more time. 

Because fractional CMOs are familiar with the team without being part of it, they can help you make difficult calls by being an external perspective on the situation. In the CMO Council survey, 48% of C-level leaders said that fractional CMOs help by offering objective perspectives. Since fractional CMOs are a third party, they can also be a useful mediator in communications between Marketing, the CEO, and the board of investors.

Plus, because fractional CMOs aren’t married to doing things a specific way and bring different experiences to the table, they can help by bringing fresh ways of thinking, suggesting creative solutions, and prompting you to explore new opportunities. In the same CMO Council survey, 52% of C-level leaders said fractional CMOs help by injecting new thinking.

When a fractional CMO won’t fit the bill

A fractional CMO won’t handle all the execution, so they aren’t a replacement for a functioning marketing team.

While many fractional CMOs will help get the ball rolling on execution, doing the day-to-day grunt work isn't a good use of their time and they likely won't be around to see projects through to completion. To make your investment in a fractional CMO worthwhile, you need a team of people who can put their recommendations into action. That might be an in-house marketing team, an agency, or a roster of freelancers. An interim CMO can help you decide who the right people are to do that job and can help you find them, but be aware you will need to invest in a number of other marketing roles to handle the execution. 

A fractional CMO is not a long-term replacement for a full-time CMO. 

Fractional CMOs generally work with multiple clients, so they won't be able to dedicate 100% of their time to your business. Plus, these CMO services are often priced to suit short-term engagements. Fractional CMOs can temporarily fill the gap when you don’t have the right CMO, but eventually, you will need a permanent employee.

In fact, fractional CMOs work well alongside permanent CMOs and other marketing leaders: they share insights that help marketing leaders make better decisions, supplement their expertise, and offer support when and where it’s needed. They can even help in the hiring or training processes to help get the next CMO up to speed. 

Final thoughts

Fractional CMOs may not be the right choice for every company, but they're certainly not just a solution for small companies that want part-time CMO support. If your business is a growing enterprise, a fractional CMO could be a valuable addition to your existing team or a much-needed support for Marketing during periods of transition.

If you're considering how additional CMO-level support could benefit your business, click here to take a look at the structure of a typical How To SaaS engagement. We help B2B businesses maximize marketing as a growth lever, and we'd love to discuss how we could work with your company.