What’s a Fractional CMO?
It’s a term starting to gain popularity, but what is a fractional CMO?
Small businesses, and some medium-sized ones too, often combine a lot of roles into one person.
The owner might be wearing all the executive hats — you’re CEO, COO, CFO, and CMO all in one.
It’s exhausting. But it’s necessary. When you’re small, you can’t afford the corporate overhead of a comprehensive, salaried C-suite.
But as you grow and you’re able to bring in professionals to alleviate the pressure, you start giving those hats to other people — to people better equipped and more experienced to handle those roles well.
So you hire a Chief Operating Officer (COO) to take over managing the daily operations of the company. Now you aren’t drowning in the minutiae of the business and can focus on bigger things.
This is where you can make the switch to more time spent working on the business and less in the business, as it’s often framed.
The Chief Financial Officer (CFO) role is usually next, because entrepreneurs are infamously racked with a phobia of financials. Of course, that’s a caricature of the typical entrepreneur, because good entrepreneurs are very fluent with their financial statements. But having a CFO gives access to a high level understanding of financial complexities, and it offloads the financial diligence to someone who can advise and report to you, the CEO.
I’m a big believer in this trifecta of CEO, COO, and CFO as a strong foundation for a business that wants to scale.
But these C-suite positions are high-paying roles, so you can easily find yourself in need of a CFO before you can afford the salary.
So a number of years ago, the concept of a fractional CFO was born.
First, There Was the Fractional CFO
For a business wanting to grow in a smart, strategic way, the need for a CFO can come before a company can afford a CFO.
Recognizing this, accounting firms (which may have already been hired by the company for tax accounting) began offering fractional CFOs to clients.
An experienced and qualified advisor from the accounting firm would become a part-time CFO for several businesses, charging each a fee and dividing their time among them.
This way, businesses could hire a portion (fraction) of a CFO without having to commit to the big salary jump. Not to mention, as a smaller company, there may not be the needs to keep a full-time CFO busy.
A fractional CFO could help with creating operating budgets, reporting to the CEO, tracking cash flow, offering financial guidance through important decisions, and more.
Applying the Fractional Executive Model to Marketing
With decades of the fractional CFO model serving businesses, it’s more recently become considered a way to provide companies with strong marketing expertise.
Every business has a head of marketing of some sort, but smaller businesses often pile that responsibility into the owner or CEO role. Even if the business has someone doing the marketing (content creator, graphic designer, web developer, etc.), the strategy and oversight will often still come back to the CEO’s shoulders.
Google search popularity for “fractional CMO” has been increasing.
For a company doing more than about $20M in annual revenue, you should hire a full-time, talented Chief Marketing Officer to the C-suite, as well as a robust marketing team. For those doing less than $20M, but more than about $500K, a fractional CMO can give the company the strategic marketing direction and oversight it needs to have success. And that fractional CMO can coordinate the marketing activities of in-house talent or marketing firms, or a blend of both.
A fractional Chief Marketing Officer relieves the CEO of the marketing responsibility, which isn’t always their strongest skill set. Or even if the CEO has a strong marketing ability, a fractional CMO frees up their time to focus on other areas of the business to carry it forward.
What Does a Fractional CMO Do?
For any Chief Marketing Officer to be effective, internal or fractional, they need to know the brand, product, customers, and business as well as the CEO. If they don’t, they can’t confidently develop the business’s marketing strategy; they would still have to defer to the CEO, and that defies the point of a CMO. They still report to the CEO, of course, and can collaborate and exchange ideas, but, ultimately, the CMO should lead the company’s marketing.
With that strong understanding of the nuances of the business, a fractional CMO can help create an annual strategic marketing plan in coordination with the company’s budget, report to the CEO, and provide the leadership to get the marketing tactics implemented.
Things a Fractional CMO Can Do
Develop marketing strategies
Manage marketing budget
Collaborate with other departments and executives
Direct a marketing team
Manage external marketing vendors
Provide oversight for cohesive marketing
Analyze and report results
All of the above tasks may currently sit with the owner or CEO of your business. But with a dedicated person to assign the responsibility, your marketing will become magnitudes greater.
How to Hire a Fractional CMO
In our experience, the biggest indicator of a successful fractional CMO relationship is trust.
If you’re the owner or CEO, you are handing off the responsibility to someone else to develop your business’s marketing, which, in many ways, is how the world sees your business. It’s a tough thing to let someone else take over. So trust is so important.
And the biggest contributor to trust is confidence. When you’re confident your fractional CMO knows your business, will develop your marketing in a way that’s consistent with your brand and values, and has the knowledge and experience to get results, then it can be easy to find trust.
So interview several candidates. Ensure you choose someone you feel good about.
There are a few consultancies that exclusively offer advising and fractional CMO services. Otherwise, some marketing firms have fractional CMOs available. Though many smaller marketing firms (the kinds small and medium businesses usually work with) are strictly involved in executing the marketing tactics.
A note on these marketing companies: they can provide graphic design, create videos, build websites, manage social media, set up ad campaigns, and more, but they often aren’t very involved in creating comprehensive strategies and overseeing all the components. They are a “services for hire” company, rather than a strong marketing advisor to help you determine which tactics you should be implementing. They can be especially identified by their focus on their implementation services on their website, even including price menus, because they’re accustomed to working with clients who are their own CMO, and know better than them how they can help you. They may say they can offer advising, but have a look at their experience with this role and how long they’ve retained the contract.
Ensure you find a consultancy or firm that has experience in advising and oversight, and they may or may not also be able to help with some of the execution of the tactics.
With good research and the addition of a great fractional CMO to your business, you can be better equipped to grow to the point where you can hire a salaried CMO! Every fractional CMO should be trying to work themselves out of a job by making your company more successful.