Is a Fractional CMO Right For Your Business?

Fractional CMO

The reset created by the pandemic caused many smaller businesses to rethink how they approach essential functions. CEOs of SMBs frequently lead every function, or certainly go-to-market functions. Many CEOs find it attractive to engage a fractional CMO to chart strategy and develop plans to elevate marketing efforts to produce greater demand. Today, we take a deeper look at this role to help you assess if it is a good fit for your business.

What is a Fractional CMO?

A fractional CMO (Chief Marketing Officer) is a senior-level executive who partners with businesses on a consultative basis, providing advice and guidance as needed. This model has become increasingly popular in recent years as companies look for cost-effective ways to access the skills and experience of a seasoned marketing executive.

A fractional CMO can be especially beneficial for small businesses. Using this model can bring a fresh perspective to an organization and provide objective insights into the company’s marketing efforts.

What does a fractional CMO do?

A fractional CMO reviews existing marketing and provide planning and strategy to improve it. The perspective of an experienced marketing executive is often needed to perform a marketing reset. CMOs usually are connected to a network of resources to help companies execute these plans and strategies.

Why try the fractional CMO model?

A fractional CMO can be beneficial for businesses that do not have the resources to hire a full-time CMO or for companies undergoing a transition period. This business model can bring a wealth of experience and expertise to a company and provide an essential outside perspective. A fractional CMO can provide guidance and support during periods of change, helping to ensure that the company’s marketing efforts align with the overall business strategy. As a result, businesses that use this model can benefit from greater clarity, focus, and efficiency in their marketing efforts.

When should a business consider a Virtual CMO?

When it comes to marketing, one size does not fit all. The needs of each business are unique, and the marketing strategy should reflect those needs. For some companies, that means working with a full-time marketing team. However, there are certain situations where a fractional CMO may be a better option.

First and foremost, businesses should consider a fractional CMO when they do not have the budget for a full-time marketing team. A fractional CMO can provide the same level of expertise and experience as a full-time CMO but at a fraction of the cost. This role can benefit small businesses or startups working with limited resources.

Another situation where this model may be beneficial is when a business is going through a period of change. Whether it’s a rebranding effort, the launch of a new product, or simply a shift in strategy, a fractional CMO can provide the flexibility and agility needed to navigate these changes successfully.

 Ultimately, whether or not to work with a fractional CMO depends on the individual needs of each business. However, this model may be the ideal solution for companies working with limited budgets or navigating periods of change.

What does a Fractional CMO cost?

A fractional CMO will charge an hourly rate or a monthly retainer. The average hourly rate for a part-time CMO is $200-$300 per hour, and the average monthly retainer for this role is anywhere from $2,500 to $10,000 per month. However, depending on the CMO’s experience and geographic location, this rate can vary significantly. The exact cost will depend on the scope of the engagement and the level of expertise of the CMO.

While this may seem like a significant investment, it is essential to remember that a CMO can provide a tremendous return on investment by helping you to reach your target market, achieve your sales goals, and grow your business. In many cases, fractional CMOs can also provide their services at a lower cost than full-time CMO because they do not require benefits or other overhead costs. As a result, using this business model can be an excellent way to benefit from experienced marketing leadership without breaking the bank.

Who should consider this role?

Deciding whether or not to hire a fractional CMO is a big decision for any business. After all, the Chief Marketing Officer is responsible for developing and executing the marketing strategy, and they play a vital role in the company’s growth.

Determine the scope of the project and the CMO’s level of involvement. For instance, you may only need help with strategy development or someone who can take on a more hands-on role. Consider the CMO’s area of expertise. Make sure to choose someone whose experience matches the business’ needs and someone with experience in your industry.

Consider your marketing budget. Be sure to clearly understand the CMO’s fee structure before making any commitments. This business model can be a great option if you want to get more bang for your buck, but they are still a significant commitment.

You also need to think about your company’s long-term goals. If you’re looking to rebrand, launch a new product or service, or make a significant market push hiring a fractional CMO can help you achieve these goals.

In short, there’s no one-size-fits-all answer to this question, and it all depends on the specific needs of your business. If you’re unsure whether this business model is right for your company, consider talking to one to see if they could be a good fit.

Welcome to the New Normal: There’s No Going Back

new normal

People find safety and security in the status quo. Today’s, Covid-19 disruption is not normal or the status quo and it is creating a new normal. When your work life is suddenly disrupted it can cause a great deal of stress and anxiety. As far as business disruptions go, Covid-19 is a different kind of disruption.

Normally, businesses get disrupted by changes in the economy, competitors, acquisitions, etc.. Sometimes businesses grow so fast they reach a point where they are compelled to change. These disruptions all provide time for planning. The current one did not.

Regardless of the cause, one thing always follows; a desire to get back to normal.

Over my career, I’ve acquired many companies, and have also been part of companies that had been acquired. Most times the acquirer handled the acquisition with kid gloves the first year. This occurs for two reasons:

  1. A desire to not disrupt the business and cause unnecessary damage
  2. A need to understand the business better before proceeding with integration

Even when the acquirer treats the acquisition with kid gloves, there is still a great deal of stress and anxiety. Every little change is treated as something negative and soon a mantra of “I wish we could go back” gets heard in the workforce.

Having been through many disruptions like this, I’m here to tell you there is no going back.

When businesses get disrupted, they adapt. It is simply human nature to do this. Through the process of adapting, we innovate and find new ways to get things done. We often find new methods superior to the old ways of doing things.

I’ve worked out of my home for the last ten years. Prior to working remotely, I would have told you that something gets lost by not being there. Over the last decade, I’ve adapted and I’m more productive than ever working from home.

Covid-19 has caused remote work to become the new normal. Companies are learning quickly that many jobs get done just as efficiently from home as they did in the office. We’re finding new ways to interact with each other and stay connected.

Having been a remote worker, it’s refreshing to see that cat walking through the background of a video conference, or the dog barking at the door during a meeting are just accepted as normal. Hey, when you’re at home kids and pets just happen. When you were the only remote person at the company this was embarrassing, now it’s the new normal.

Bigger changes than remote work are afoot. When you see General Motors rapidly spin up ventilator production or hear we might have an antiviral in less than a year, necessity once again spurred invention. How we invent and how we innovate manufacturing is changing.

I guarantee you there is someone in senior management over at GM thinking: if we could take IP and produce ventilators that fast, what else could we be producing?  That’s got to be a real eye-opener, especially when you consider the financial hole this virus has created for most of these companies.

I also guarantee you that there are people at GM thinking: I can’t wait for things to go back to normal. My point is that things rarely go back to what was normal. Through necessity, we’re creating a new normal. This might involve GM making ventilators or some other off the path products. We’re almost certainly going to see more work done through remote teams.

Welcome to the new normal – There’s no going back.

If I could afford one marketing tactic, what would it be?

marketing tactic

I noticed on social forums people often ask about the best way to spend limited marketing funds. The questions are usually phrased “If I could afford to do only one marketing tactic, what would it be?”. This is an interesting question, as it assumes the most valuable things will come with a cost.

If everyone keeps asking, why doesn’t someone just answer? There no simple answer, and that’s the rub. The right marketing tactic depends on the business you’re in. Not all businesses are the same when it comes to marketing.

What’s really interesting, are some of the answers. Many marketers are one trick ponies. So of course, they think their one trick is the answer to everything. Put another way, if you’re a hammer the rest of the world looks like nails.

You run across a lot of marketing people who want to build you a website or optimize the site for SEO. Another group wants to write blog posts, while a third thinks Ads are the solution. Then there are the specialty people who offer custom videos or clever emails. They recommend all of this before they know the first thing about your business.

What the best marketing tactic investment?

I suspect by this point in this post you’re thinking: Is this guy going to answer the question? Yes, and here it goes. If you can only do one thing, do this:

Make sure you can describe your business and its value in 60 seconds or less.

Sort of anticlimactic, isn’t it? Hate to tell you this, but that’s the real answer. If you can’t easily articulate what you do, and why anyone needs it, you haven’t passed Go.

What marketing tactic comes next?

Now you’re thinking, I already know that. That’s business 101. What comes next? Next, you need to make sure you know your target audience. Who needs your product or service and why? You’d be amazed how many businesses haven’t stepped back and thought about this. How can you even begin thinking about marketing tactics, if you haven’t really thought this through?

Know Your Buyer’s Journey

OK, let’s assume you can articulate your value proposition and you know who needs it. What’s the next step? The next step is to know how they buy. I’m not talking about the purchase transaction I’m talking about the journey. From the time your target audience gets the thought they might need you, what are the things they do to find you?

SiriusDecisions did research on this several years ago and found the average customer will be 50% to 70% through the buyer’s journey before they will engage with a sales person. So what are they doing? And we’re back to it depends on the business you’re in.

They website/SEO marketer is jumping out of their chair right now yelling they do a search! That’s not always true. A few years ago, I was working with one of the top solar panel companies. They told me most people get interested because a neighbor installed panels. They found their best marketing tactic to be lawn signs, door hangers and vehicle wraps.

How did they get the first customer on the block? They knew their product had a great return on investment for someone living in a sunny State. They knew the early adopter was a highly educated environmentally conscious, economically well off home owner. This caused them to target specific communities and community groups that were trying to do something environmentally friendly.

The point here is they understood their value, understood their buyer and used really focused marketing tactics. None of the common ones that come to mind work for them. Placing Ads was just a waste of money. Search wasn’t the first thing their audience did. They weren’t trying to reach everyone, they had a highly targeted niche.

Their audience wasn’t going to begin their buyer’s journey by searching for solar panels. An educational approach was more compelling. It wasn’t really about the money saved as much as the environmental impact.

Hopefully, this example helps you understand why you need to know your value, target audience and their buyer’s journey before considering marketing tactics. You then need to map tactics to the journey. This usually takes a seasoned marketer as a guide.

If you have very limited funds to spend on marketing, and want to spend them wisely, build a foundation. Know your value proposition, target audience and their buyer’s journey, and avoid the one trick ponies. You’ll assume you can learn this by watching others in your market, but keep in mind that buyer’s journeys are changing. Those that recognize changes first are the ones that succeed and grow.

Generational Marketing Talent – The 12 Tool Player

Does a generational marketing talent exist? Many companies have had to cut marketing staff and are asking those remaining to do more. Small and mid-size companies are getting down to skeleton crews. This begs the question: “If I could only keep one person, what skills do they need?”

Baseball describes the ideal player as having five tools: speed, power, hitting for average, fielding and arm strength. If a player possesses those five tools at the major league level they are guaranteed to be a star. For example, Mike Trout is the latest major league five tool player and he is an All-Star, three-time American League MVP, and a seven-time winner of the Silver Slugger Award.

The Payroll Protection Program (PPP) has given mid-size and small business a short reprieve, but the economic burden of the pandemic won’t go away tomorrow. All businesses are now rationalizing their cost base going forward.

The biggest marketing cost in most mid-size and small businesses is people. When costs needed to be reduced people get looked at really closely. Most good marketing teams have two key people at the top:

Marketing Leader – A person who operates at an executive level and collaborates with the CEO and head of sales on go-to-market strategy. This person creates and drives the marketing vision and strategy, manages all of the people and work and ideally contributes thought leadership.

Creative Director –   This person takes the vision and strategy and brings it to life visually and also makes sure the branding is kept consistent across all work.

Generational Marketing Talent Tools

To really have a marketing department that contributes at a high-level these two people are required. It is extremely rare to find one person that can do both roles, but this is where our marketing unicorn description begins. At a management level our generational marketing talent needs the following:

  1. Strategy & Visionary
  2. Domain Expertise
  3. Collaborative (executive level)
  4. Strong oral, written and graphics skills
  5. Ability to manage work and people

Even with all these skills leadership typically still needs:

  1. Web and SEO
  2. Social Marketing
  3. Research
  4. Marketing Automation
  5. Media Relations
  6. Advertising
  7. Event Management

What do these talents cost?

At a minimum, most companies would need someone who could do all of the above. Does a generational marketing talent exist? If they do, they are really rare.

As mid-size and small businesses look at reducing the size of marketing, they need to keep these twelve tools in mind. If you reduce staff and eliminate some of these skills it will cripple marketing’s ability to execute.  Yes, you can outsource but you’ll need the remaining people to manage the marketing freelancers. This assumes you keep the leadership and cut the lower level workers. Does the math really work on this?

When you look to make a meaningful reduction in cost you have to look at the math. Here’s how it typically shakes out (conservative estimate):

Vice President of Marketing $150,000
Creative Director $100,000
Web/SEO $50,000
Social Marketing $50,000
Research $40,000
Media Relations $50,000
Advertising $50,000
Event Management $50,000

Almost half the cost of the department is in management. Could you cut one of these two people? Finding one person who can manage both is almost impossible, so the answer is likely no.

To outsource the lower level functions and reduce cost you have to assume someone outside can do it more efficiently than you did it inside. Outside freelancers usually cost 150% of internal resources, so cutting and outsourcing rarely make sense if the person is fully utilized.

To make a meaningful cut you’ll need to stop doing something that eliminates both a person and an operating cost. This brings us to Advertising, Events and Media Relations. All three of these have external cost beyond the body managing the activity.  Can you stop doing one or more and sustain your revenue?

Most people zoom in on Media Relations when this gets put on the table. The problem is that it has the lowest external cost. Company’s also need to manage their reputation in the media and also produce enough news to show signs of life. Outsourcing a minimal effort in this area frequently doesn’t cross the 150% threshold required to achieve a savings.

This brings us back to Advertising and Events: can you stop doing them? Is there any alternative?

We started Sizyl with this in mind. We’re a generational marketing talent delivered as a service. We can handle all of the functions and let you deal with the entire department as a variable cost. For example, if you’re spending a half million and want to reduce 30% we can still produce across the broad spectrum of marketing and reduce the cost. This is because the cost is shared across multiple customers, so you’re not paying for the people, just the service.

This new delivery model is your generational marketing talent. Sizyl is a 12 tool player that can execute to your budget.