Outside of the founding executive team, the CMO is usually the first full-time C-level role that a startup will attempt to hire.
This can be a big mistake!
This stage is better served by a different kind of role: a fractional marketing leader.
Why? The expertise is right and so is the cost.
The planning and logistics of a growing marketing function can quickly overwhelm even the most dedicated internal team. Entering new channels or markets gets expensive fast. You need the right strategy from a confirmed expert with the right data, and you need the right outcomes.
Until a full-time exec is truly needed, you can still grow fast relying on the same level of experience with a fractional CMO. The bonus is: you’ll also free up precious budget to spend on your best campaigns.
This cost efficiency can net millions in additional revenue over time.
Once the Easy Growth Has Been Got, Where Next?
Growth always begins in the founder’s own personal circle of influence.
During this launch period, learning comes quickly. Early users are innovators and friends who are supportive, refer others, and tend to be forgiving of early missteps.
This honeymoon ends quickly when the company reaches the end of the MVP stage and is ready for PMF-level growth. Sometimes, the work of finding that growth means forgetting everything that might have worked before. Sometimes it means deploying a winning strategy with a big-league execution budget. Regardless, a focused, energetic, versatile leader is needed.
Stijn Hendrikse, famed author of T2D3, the startup scaling playbook, believes that the Chief Marketing Officer role has to be the most versatile of any in the executive suite.
According to Hendrikse: “A CMO is a well-rounded athlete who can lead, recruit, train and develop. Someone who can identify knowledge gaps, develop those areas and reinforce them with strong subordinates.”
You can tap that same power when you hire a fractional CMO. Not all companies need that power 100% of the time. They might not even need it 50% of the time.
But they definitely need it.
The advantages are in flexibility and efficiency.
Fractional CMOs Plan Long Term and Execute Short Term
C-level marketing strategy always combines a long term and short term view.
Overall, fractional CMOs build sustainable systems that are created from strong foundations. They research and envision the best way to reach the right customers. They work from best practices to ensure your campaigns run on a/b testing, machine learning and rapid iteration so they can adjust as they go.
The foundations they will build from the outset include:
- Customer personas, ICPs and pain points
- Competitor strategy comparisons
- Market trend analysis
- Data dashboards with real-time results for campaigns
- Clear OKRs and timetables
- Asana-based (or similar) project management tools
- Well-integrated analytics across platforms
- 90-day marketing sprint cycles
- Reporting cadences for team, leadership and investors
If your business has a solid 3-5 year goal in mind, the fractional CMO will devise and execute a 90-day sprint with your team and resources to bring you much closer to that goal.
Fractional CMOs Make The Most of Limited Resources
Your marketing resources span your budget, your employees, your vendors and your systems.
Orchestrating the right results from these resources is the job for an expert conductor.
Too many CEOs and Founders fall into the trap of trying to manage a marketing agency directly while hiring internal personnel to handle specific marketing functions. While every person and element might be working at their best, a disjointed effort can mean a lot of lost efficiency and frustration.
Having a digital marketing agency report directly to a CEO is a recipe for disaster.
CEOs are generally not equipped with a full enough understanding of the nuances of delivering a full scale marketing campaign and getting the most from an agency. They can be a bottleneck for approvals and give feedback that is biased by siloed thinking, which hurts performance and team morale.
The fractional CMO provides outsized value at a fraction of the cost of a full time CMO:
- Plots the Best Course, Timing and Technology To Get Outcomes
Fractional CMOs are not tied by legacy thinking and have current success knowledge from working with multiple leading companies at the same time. They bring fresh thinking tied to data to make good decisions that will help your whole existing team succeed.
- Gets the Best from Your External Agencies
Digital marketing agencies, UGC agencies, creative agencies, branding agencies, etc will see substantially better results when reporting to a CMO rather than a CEO. Optimization, pivots, approvals and quality of work all rise because the CMO understands the true rhythm of an agency.
- Trains and Motivates Internal Employees
A fractional CMO is, by nature, a teacher and cheerleader about growing revenue through marketing strategy and execution. The fractional CMO is the champion of the customer, making sure pain points are accurately understood and mapped to the products and services you provide. When this connection is clearly understood, employees get excited.
- Adds Credibility for Leadership and Investors
Having a fractional CMO with strong credentials on board is a sign of wise thrift and efficiency on the part of any rapidly growing organization. Investors know that money spent on campaigns brings more revenue, while money spent on overhead goes against revenue. Getting more growth with the same resources, including upskilling among your existing employees under the fractional CMO’s mentorship, is likely.
Fractional CMOs Stand Up To Boardroom Pressure
As a fully-engaged member of the leadership team, a fractional CMO is empowered to speak their mind. Their expert, steady leadership perspective and access to real-time data makes them a perfect addition to any planning session.
This can save a company from trouble when short-term thinking and siloed information sources, not to mention stressful market conditions, tempt leaders to disregard tried and true marketing practices that should not be abandoned.
At the same time, a fractional CMO can argue for pivots, strategic shifts and reboots that politically can be hard for other insiders to suggest. Backed by data and years of C-level experience, these gut decisions need to be backed by convincing boardroom presentation skills, which a fractional CMO brings.
Ultimately, the customer should decide. The customer knows best. The customer will be paying the bill.
The fractional CMO is the advocate for the voice of the customer, even if that can lead to some awkward internal discussions!
The results will be considerable.
Fractional CMOs’ Top Goals: Driving Awareness and Growth
Serving your customers with the best products and services is only one part of success.
Your investors want growth too. Growth, growth and more growth!
The tricky part is… they want your team to get more growth and build huge awareness while also cutting expenses at the same time. Not easy.
CAC must be falling. CAC Payback Periods must be contracting. Conversion rates must be improving. Just don’t spend any more money!
One answer is to hire a veteran CMO with the expertise to get those outcomes. But the time cost to find them combined with the salary cost to keep them is a huge expense! One study recently showed that hiring a fractional CMO vs a full time CMO resulted in several millions in “found” revenue.
Startups come and go – and many of them go fast.
- 90% of startups fail.
- Only 40% of startups are profitable.
- 80% of small businesses employ only the founder.
Using your existing resources, budget, team, vendors and systems, the fractional CMO will work from the first day to bring serious improvement to your marketing and growth success.
Foundational Items That Lead to Marketing Success
The items fractional CMOs excel at are items that have exponential effects on the efficiency of all your marketing work.
Five big areas that fractional CMOs pin down quickly are:
- Planning Research
- Customer Definitions
- Messaging and Branding
- Team Planning and Assignments
- Analytics and Reporting
With these items in hand, the company has a strong foundation for team members to build out campaigns that work well in concert with other moving parts. There is less need for training, and consistency in holistic marketing yields more powerful results.
This flexibility is part of the appeal of a fractional CMO. When expert-level strategy is needed, they have the experience to ask the right questions and make the right decisions. When expert-level execution is needed, they have the experience and guidance to help all team members be at their best. When someone needs to “roll up their sleeves” and bootstrap a new idea or campaign, the fractional CMO can lead the charge.
Of course, the first foundation of your marketing success is the quality of its reporting data and cadence. If you don’t know what is happening, you will be steering blind. The fractional CMO will ensure you have the data you need to be a good consumer of your marketing growth experience.
What Kind of Growth Does My Company Need?
Not all growth strategies look alike, because no two companies are alike.
Two major areas to consider are:
- how much does my customer spend, and
- what stage is my company in?
The current growth stage of a company can call for completely different growth strategies. A company working on MVP will dig in on customer stories and key pain points. A company reaching the PMF stage will work to validate that MVP at scale with wider marketing. Once they find a real niche, the company will need serious growth engine work to fully reach all potential customers.
Marketing is also bounded by budget resources, including money, time and people.
One key factor is Average Revenue Per Unit (ARPU) or CLTV. If your customer only spends a few thousand dollars a year or less, your marketing and sales operation will need to be highly automated. If customers are spends tens to hundreds of thousands per year, there is room for a highly complex, detailed sales process that customized each engagement to the customer.
Many companies focus on a high rate of growth, without regard for the quality of the customer or how long they might stay or how many friends they refer. Regardless of the size of a market, it will never be big enough to allow for sustainable long term growth if a company can’t figure out how to retain and please customers over time.
A fractional CMO can help determine where your company is at your growth stage and design a rapid growth strategy to match.
A Formula For Growth with a Fractional CMO
There are five basic areas that will lead to growth. Depending on your company’s situation, you should seek out a fractional CMO with exceptional skill in one or more of these areas:
- Getting more qualified leads
- Lowering the cost of getting each lead
- Converting more of the leads
- Selling more to each customer
- Keeping each customer longer
While there are many other nuances to what drives growth, these five areas are useful siloes to consider where the lowest hanging fruit of growth can be plucked next.
Your next 90-day marketing action sprint with your fractional CMO should definitely include a focus on one or more of these growth areas.
Attributes of the Best Fractional CMOs
When hiring a fractional CMO, not every potential hire will be right for your company. There are three key attributes a founder should look at when considering candidates:
Fractional CMOs are Great at Execution
When the job needs to get done, a fractional CMO comes in with a fresh approach and a focus on OKRs that make a real dollar impact to revenue. They bring with them natural cost savings that frees up money for campaigns and use project management to make sure every resource is fully utilized and every budget dollar produces maximum effect. They love to test and optimize.
Fractional CMOs are Great Managers
As natural teachers and mentors, fractional CMOs know how to get the most out of people, processes and technology to get great marketing results. They are leaders who can stand up in the boardroom and convincingly report on the fastest route to growth using existing resources. They are influencers in their own right, with connections that matter and represent values you respect.
Fractional CMOs are About Outcomes
As independent professionals tasked with defined timetables and results metrics, fractional CMOs are measured frequently according to the highest standards of delivery. They are used to showing up and performing in a measurable way. If they don’t define and meet useful outcomes, their engagements will not last.
If you don’t feel the energy of these three attributes in your potential fractional CMO, you should move on to the next candidates!
When the Going Is Tough, The Tough Go Fractional
While utilizing fractional C-level talent could be a wise strategy at any time, it is particularly useful at times when the economic conditions mean less buying and harder growth.
If you needed a top 10 list of why more companies are hiring fractional CMOs today, they would have to be because fractional CMOs are:
- Cost effective
- Specialized Experts
- Objective and Unbiased
- Fast to Deploy
- Highly Strategic
- Mentors and Teachers
- Limited Risk
- Connected and influential
A fractional CMO “rules the school” by providing strategic leadership, expertise, and flexibility to organizations without the long-term financial and organizational commitments associated with a full-time executive.
The fractional CMO model is particularly attractive for companies looking to boost their marketing capabilities without taking on the full cost burden of a permanent CMO position.