Understanding the Financial Investment
Employing a fractional Chief Marketing Officer (CMO) can offer significant advantages. By opting for a fractional CMO, you can access the expertise and guidance of a CMO without the expense of hiring a full-time professional. The cost of a fractional CMO, however, can vary depending on your strategic objectives, business growth targets, and overall company goals. The level of service you require will directly influence the price you can expect to pay. This should be measured against hiring a full-time person or a team of less experienced professionals who may take more time and practice to identify, streamline and produce the scope required against the business objectives and KPIs.
Understanding Fractional CMO Rates
When considering the cost of hiring a fractional CMO, it’s important to recognize that their rates can fluctuate depending on various factors, including the specific industry. Hourly, retainer, or day rates are typically determined by the scope of work and time commitment required. Fractional CMO rates can range anywhere from $150 to $500 per hour. On average, you can expect the typical hourly rate to be between $200 and $375.
What’s typically included in a Fractional CMO Retainer
By securing a fractional CMO retainer, you gain access to an experienced professional who will fill the role of your head of marketing. They will thoroughly examine your current marketing strategies, take ownership of marketing initiatives, and provide strategic guidance aimed at achieving your business and revenue objectives. Consider a fractional CMO as the “tip of the spear” for your marketing initiatives. They provide operational guidance and take action on the work jobs to be done.
The following key elements are typically included in a fractional CMO retainer:
- Selection of a part-time marketing executive with expertise in marketing and strong leadership skills
- Development of a plan and process for customer acquisition and retention activities, along with a customer-journey marketing budget
- Long-term commitment and dedicated time and effort to drive measurable outcomes
Understanding Exclusions from a Fractional CMO Retainer
What a Fractional CMO Retainer won’t cover:
- Predefined strategies, approaches, digital marketing campaigns, marketing tactics, or software tools
- A guaranteed increase in leads and revenue growth within a short timeframe
- A replacement for outsourcing services such as digital advertising, content marketing, technical SEO support, and public relations
Although a embedded Chief Marketing Officer can provide these services to your business, this most likely be at an additional cost, unless otherwise noted.
Estimating the Cost of a Fractional CMO
How Do I Estimate the Cost of a Fractional CMO?
The cost of hiring a fractional CMO can vary based on the desired level of involvement. If you only require assistance with strategy and planning, the “salary” cost will be lower compared to hiring a fractional CMO who will also execute those plans. You can review the scope of what is needed from your fractional marketing leaders to ensure the best fit and pricing aligns with your specific needs.
Your budget for a fractional CMO will depend on the extent of work required and the time commitment involved. Generally, you should anticipate spending anywhere from 1 to 10 hours per week or over 40 hours per month for this type of arrangement.
If you are running a small organization or are just starting out, you may only require 3-5 hours per week to handle tasks such as creating a marketing strategy, coordinating digital campaigns, measuring marketing performance, and generating monthly marketing insights reports. However, if you have a larger organization with an existing marketing team, you may need 10 or more hours per week to provide strategic oversight, manage initiatives and projects, and mentor your marketing team.
What is the price of using a fractional CMO service?
Engaging with a fractional CMO can be beneficial in terms of budget allocation, as it allows for a higher return on investment despite making a smaller initial investment in part-time marketing efforts.
Some businesses believe that spending a significant amount on marketing is necessary for success. However, this is not always true. By employing a fractional CMO, you can avoid common marketing mistakes and boost your business growth without excessive spending.
What should I pay for a fractional executive-level CMO?
Payment is typically based on the number of hours the part-time CMO works per week and the specific marketing deliverables required for the project. For example, if you need assistance with developing and implementing a marketing plan, it may require 10 hours of work per week. There are successful marketing strategies and tactics that exist, and they don’t always require a fortune to implement. For small business owners, marketing can be one of the most challenging aspects of running a successful company.
As a small business owner, there may be times when you need to bring in the best marketing professionals available, but only on a temporary basis. In such cases, using a fractional CMO as an interim CMO can be the ideal solution.