Many B2B middle-market businesses, especially those with high-growth aspirations, understand the value of marketing. But they’re not often clear about how to achieve goals, how to spend their marketing budget, or how to structure the marketing department. That lack of clarity often leads them to think about marketing leadership, and then to a question:
Do we need a full-time CMO?
The short answer is deeply unsatisfying: It depends.
It depends on things like company size, culture, aggressiveness, and market factors. It depends on your marketing program’s maturity and its ability to drive key measures. It depends on whether you have strategies, talent, technology, and processes—the pillars of growth marketing—in place and aligned to the business goal.
Your needs for marketing leadership depend on a variety of factors. Let’s dig into some of them, and hopefully we can help you come to a clear(er) answer.
What Is the Average Chief Marketing Officer Salary?
Glassdoor puts the average base for a CMO at $190,000. PayScale pegs the average and median salary for a full-time CMO around $170,000. ZipRecruiter puts the national average salary for a CMO at $145,000.
Those aren’t nominal line items, especially if you consider benefits, incentives, and the bell curve. If a company wants a CMO above the 50th percentile, it should plan on spending a good deal more than those salary figures.
And more importantly, the company should recognize the CMO salary as a fixed cost. To warrant bringing on a full-time CMO, a company must be at a threshold where their marketing function necessitates a full-time marketing executive. That scenario tends to cater to big companies, which typically have:
- Defined Business Goals and Marketing Buy-in: The goals of the organization are clear. Marketing is seen as a critical element of the execution and is plugged into other divisions. The full-time CMO can focus his or her time on leading the marketing department and supporting its expansion as a powerful resource across the organization.
- Fully Formed Marketing Infrastructures: The website is built, pretty, and targeted. Core marketing technologies (e.g., tracking, outreach, CRM, automation) are implemented. The full-time CMO has a foundation for marketing communications, and s/he has levers to pull in executing and refining the marketing strategy.
- A Team of Tactical Marketers with Clear Roles and Responsibilities: The company has a team of creators and makers and doers. They all know what they should be doing. The full-time CMO can be a mentor, guide the team’s efforts, and create context around the tactical effort.
- More Traditional Corporate Structures: The C-suite has to meet in the conference room because they need the chairs. The full-time CMO owns the achievement of marketing goals and regularly reports progress and challenges to the executive team—so the marketing department can keep working effectively.
As a rule, if the marketing team is to remain on the smaller side (i.e., 1 – 3 people), the need for a full-time CMO is much smaller. In a lean-team structure, a full-time CMO would likely have to perform a variety of tactical tasks, at a much higher labor cost than a tactical specialist. A bloated talent budget means less money to spend on critical (but expensive) technologies and other forms of paid outreach.
How Does That Compare to a Fractional CMO?
Fractional CMOs typically charge on a retainer basis, based on expectations set during the marketing planning stage. A company with clear revenue goals and a small marketing function should budget at least $8,000 per month—or at least $96,000 per year—for a fractional CMO and strategic marketing support.
Unlike a full-time CMO, a fractional CMO is a variable cost. This suits growth-focused companies, which need flexibility and changing levels of strategic and tactical support as the marketing function develops. A company will be less agile with a big-salaried CMO taking a big slice of the marketing budget—and that level of leadership talent might not be a 40-hours-per-week need. But for half of the annual cost (for a median CMO, no less), the company can employ a strategic combination of marketing talent: a marketing executive to define and shape its strategy and specialized talent to execute the strategy.
Marketri calls that agile structure a “fractional CMO pod,” and it’s a cohesive and cost-effective way to move more quickly toward the business goal. It gives our clients a big dose of marketing leadership, ongoing strategic support, and greater budget for other matters that are critical to the success of an agile marketing program.
A Budget Breakdown for Fractional CMO Candidate Companies
For many middle-market companies, limiting the leadership-talent spend gives them more money to:
Align Marketing Strategy to Business Goals
If the goals of the organization are clear, but marketing’s role in achieving those goals isn’t, then the company should first invest in creating a strategic marketing plan. A marketing plan is critical for any company that wants to spend its marketing budget effectively. A plan cements marketing specifics.
Our marketing plans are essentially made up of two parts:
- Due Diligence: This is essentially a deep dive into the company, its history, its position in the marketplace, strengths, weaknesses, and so on. This portion of the plan is research-driven, and it forms the foundation required for the recommendations made in part two.
- Marketing Communications Plan: This part of the plan consists of the recommendations for how marketing will support business goals. This is the action-oriented part of the plan that details tactics, roles, responsibilities, and how budget should be allotted.
One finer point here: growth-oriented companies would be smart to consider “fractional CMO” as a leadership and strategic need, rather than an individual staffing problem. By budgeting for the need, the company puts itself into a stronger position for driving outcomes.
That becomes very clear at the line between marketing plan creation and execution. The plan could very well find that splitting $8,000 like this is the best path forward for execution:
- 1 workday per month of CMO time @ $250/hour ($2,000)
- 5 workdays per month of strategic marketing support @ $150/hour ($6,000)
Again, we’re talking ballpark figures here, but the ability to adjust the ratio of leadership and strategic support is a major advantage for businesses on the move. And a strong marketing plan makes the points and timing of adjustment clear.
Build and Optimize the Marketing Infrastructure
Companies considering fractional CMO services should also allot budget for refreshing and rebuilding their marketing infrastructure. The exact recommendations would stem from the strategic marketing plan—I know, broken record. To be safe, when rolling out a marketing plan, the company should expect to:
- Revisit Branding and Messaging: The company’s message and visual brand must resonate with the audiences that will drive growth goals. This may require a simple visual update or a drastic redesign of the brand positioning strategy.
- Update the Website: It’s likely that the company can better leverage its website as a marketing tool. This could range from simple SEO-related keyword optimization to more comprehensive overhauls of the sitemap or design of the website.
- Acquire and Implement Technology: The company should expect to spend budget on new technology outlined in the plan. Technology will range from simple web plugins to enterprise-level platforms, depending on their existing infrastructure and their future goals.
Bring in Tactical Support
You can’t beat a tradesman at his trade. And due to the increased digitization of the marketing arena, marketing tradespeople abound. As it wades into new marketing waters, the company should expect to bring in specialized support, which could range from graphic and UI designers to paid search and marketing automation specialists.
Depending on the need, some of our clients prefer to roll some tactical support into our retainer. Others choose to bring in a full-time marketing generalist to help execute the plan and maintain traction internally. Regardless of the preference, it’s a given that you should expect some combination of outsourced and internal resources to help execute the plan.
Marketing Leadership is Part of the Puzzle
Successful marketing programs require a long-term mindset and commitment to strategy combined with a short-term flexibility in the execution. The staffing at the leadership level is an important consideration for any company looking to achieve predictable revenue through marketing. And it should be. Leadership sets the tone, the path, the pace.
But there’s no easy answer to whether a company needs a full-time CMO. It comes down to a host of factors including preferences, styles, budget, and preexisting staffing.
That said, you have options. If you’re on the fence in hiring a full-time CMO, it might be worthwhile to trial a fractional CMO first. It’s a flexible way to get a third-party perspective and assess what works and what doesn’t—while driving your marketing function forward.
Want More Insight?
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If you’d like to learn more about Fractional CMO and different options for outsourced marketing help, then I invite you to download our marketing services landscape guide by clicking the image below: