3 head-to-head comparisons for businesses on whether to opt for a fractional CMO/part-time CMO or a full-time CMO.
Deciding between a fractional CMO and a full-time CMO is a very tricky decision for any business leader. In this article, I will outline three areas in which they are directly compared to one another to help you come to that decision.
1. Size of your organization
This is often the deciding differentiator when a business leader is weighing up whether they opt for a fractional CMO / part-time CMO or a full-time CMO. And it makes sense. A full-time CMO is better suited for an organization whose marketing team is larger and needs constant management in order to stay on track. Whereas a fractional CMO is better for a business that has maybe one or two marketers on the team.
A rule of thumb that some businesses use is that revenue from $1m to $50m is normally well suited for a Fractional CMO whereas anything over $50m it may be better advised to bring in a full-time chief marketing officer. This rule of thumb also can be used to show the different stages of growth of businesses that either Fractional or full-time CMO work with. Typically, Fractional CMOs are used to dealing with <$20 per year revenue enterprises. Therefore they have expertise in growing these businesses more so. Full-time CMOs are more used to working with slower growth but higher revenue businesses. As common wisdom suggests, the larger a business gets, the rate of growth slows. Naturally, the laws of diminishing returns come into play. So for you as a business owner, you must identify where you are on that growth chart and if you are in the period of experiencing strong growth and nowhere near maximum earnings potential or market share than perhaps a Fractional CMO is the way to go.
2. Market Confidence and Prosperity
In times of uncertainty, it is commonplace for businesses to hold back on investing in new staff, especially expensive new staff. This is because, with higher-paid members of the team, the risk-reward calculation is greater on both sides. Hence why when the market has uncertainty flowing through it, that risk if amplified and the reward stays constant. The result? No new hires. This is definitely true with hiring marketing directors and full-time chief marketing executives, however, an outsourced or fractional CMO provides businesses with the ability to hedge their bets and not overcommit to brining in high-level marketing talent.
This luxury I talk about is that bringing in an outsourced or fractional CMO allows businesses to commit to the hire on a temporary basis, such as an initial three-month agreement then a rolling deal. This compared to a full-time CMO is a lot more attractive as you will have to bring them in as an employee, and yes, there is probation, but this can still cause headaches if the hire does not work out.
So, to answer the question: is a full-time CMO or fractional CMO a less risky hire? The answer has to be fractional CMO.
3. Roles within the team
Picture this: you bring in a marketing director or full-time CMO into your business, however, your marketing department is not huge. You need someone who is experienced to lead the strategy and the team, but you find yourself wondering whether the marketing director or full-time CMO is doing work that is, frankly, beneath them. These could be simple marketing tasks that can be handed off to a marketing specialist. This happens quite often in businesses. Tasks that should really cost a business $20-30 per hour end up costing the business $50-100 for the same if not similar results.
This is one reason bringing in an outsourced or Fractional CMO is beneficial to an organization in that you can pay the expert marketer only for tasks that an expert marketer is required to do. Nothing less at the same expense. It goes without saying that if the company does not do this then, frankly, it is terrible business and throwing money down the drain. But, you would be surprised how common it happens. The CEO will often crave the strategy and leadership required but their team is just not there yet.
In summation, I have compared three areas in which a full-time CMO and Fractional CMO can go head-to-head, and from the results, it appears an outsourced or Fractional CMO is the way to go. This is true because of the problem I have presented are ones generally facing business that run at less than $50 million per year. Once a business goes above that level of $50 million per year, generally, a full-time CMO is probably better equipped to run the marketing department as the involvement level needs to be intense. So this article is not saying which one is better because there is no clear answer to that. There is, however, a clear answer to which is a better option to a business depending on its size and the issues I have covered above.
If you are interested in bringing in a Fractional CMO to your business or wish to learn more head over to cmox.co now.