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Structure

The Value of a Fractional CMO

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“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”   —Sun Tzu

The responsibility for developing go-to-market strategy and ensuring sales alignment belongs to the Chief Marketing Officer (CMO).

High performing companies know that marketing enables sales, and that this strategic partnership is a proven ingredient to driving sustained growth. So, clearly, having a CMO on the leadership team is important for any organization that wants to grow. However, it is not an easy job to fill or perform. There are a number of common traps making it difficult for CMOs to be successful.

Adding to the challenge, there are also many different archetypes of the CMO role. This can make it hard for organizations who want a CMO to find the right one – the marketing professional whose background and experience match what the organization needs to thrive.

Despite all these challenges, progressive leaders of organizations often decide they need the expertise of a Chief Marketing Officer but then discover they cannot justify, or afford, to hire for a full-time role. Are they simply out of luck?

Fortunately, there is an emerging solution. Organizations can engage the services of a fractional CMO.

What is a Fractional CMO?

The concept of a fractional executive is not new. For years, companies have been bringing in seasoned experts to fill interim roles or do projects on a flexible basis. This type of role is becoming more common across all the traditional C-suite and senior leadership positions, including the CFO, VP Finance, CHRO, CIO, and increasingly the Chief Marketing Officer (CMO).

A fractional executive is a functional leader contracted to take a part-time or fixed-term position with a client organization. They are often very experienced former executives who want more flexibility in their working life, enjoy consulting, and like having a variety of clients.  

A fractional CMO, as the name implies, provides all the strategic value that a full-time Chief Marketing Officer brings to the table. They perform the executive function of a CMO without forcing the client company to commit to the full-time salary and burden of a person in that role.

Perhaps the best way to think of it is as a flexible, part-time CMO. To borrow a technology term, you might call it CMO as a service. 

Is a Fractional CMO Different From a Marketing Consultant or Agency?

The short answer is “Yes” – a fractional CMO is different from a marketing consultant or agency.

How? Well, it comes down to the difference between strategy and execution. A fractional CMO will develop a comprehensive strategy and execute, whereas consultants or agencies have their own business model bias:

  • Marketing Consultants – Consultants are the experts you engage, typically on an hourly or project basis, to develop a strategy or perform a specific tactic. Once the solution is developed, either you are on your own to execute the plan, or the service is narrow and not a comprehensive marketing solution.
  • Marketing Agencies – Agencies, on the other hand, typically give away the strategy so that they can sell you their services. The more services they provide, the more money they make. This creates a conflict of interest that is difficult to sort out if you do not have an experienced marketing leader on the team.

A fractional CMO is that experienced 360-degree marketing leader who you want on your leadership team!

They will work directly with the CEO and other functional leaders to develop a growth strategy, and a plan to execute it. The fractional CMO then takes ownership of the growth plan to manage the marketing program and team. Since the fractional CMO is not in the business of selling services, there is no bias in their recommendations – there is no risk that they will recommend marketing tactics that are not suited for the business.

What Does a Fractional CMO Do?

In short, a fractional CMO does everything a full-time chief marketing officer would do. They are the senior executive responsible for growth strategy, marketing execution, and for ensuring alignment with sales.

Great fractional CMOs will also get their hands dirty. In collaboration with the CEO and the Sales leader, they will take the lead on developing a growth strategy and plan. Depending on the needs and capabilities of the marketing team, an experienced fractional CMO will roll up their sleeves and dive into those areas or activities where they can add the most value. Powered by a strong bias to action, a fractional CMO always leads the implementation and achievement of the growth strategy.

The Value Proposition for a Fractional CMO

There are many benefits to having a Chief Marketing Officer helping define the future and drive the growth of your organization. However, not every organization can afford or justify having a full-time salaried executive like a CMO on the executive team. These organizations can benefit from a fractional CMO who will deliver much of the same value proposition with lower risk and less cost.

Significant benefits from engaging a fractional CMO include:

  • Results – A fractional CMO will deliver measurable results. The statement of work (SOW) that the CMO and CEO define together will define the deliverables and KPIs that marketing owns. The fractional CMO will ensure that marketing delivers the results you need.
  • Experience – A fractional CMO brings a depth and breadth of experience that typically spans across many roles and industries. This is often much greater than what your organization could recruit on your own.
  • Cost Effectiveness – Because you are not paying the salary and benefits of a full-time high-caliber executive, there is reduced overhead cost to have a CMO on your leadership team.
  • Expertise – An experienced fractional CMO will have expertise across a number of marketing strategies and tactics. They will bring with them an extensive toolset of best practices.
  • Flexibility – Fractional CMO engagements are structured to provide the organization with the flexibility to quickly ramp up or down depending on what the business needs and can afford. This just-in-time approach to staffing an executive position is very attractive to many organizations in times of uncertainty.
  • Strategic Impact – A fractional CMO will hit the ground running. With a clear SOW and a mandate to transform marketing, they will cut through political red tape and internal hurdles, in order to drive growth. This accelerated time to productivity helps to deliver results quickly.
  • Marketing Leadership – Providing marketing leadership, oversight, and mentoring for the go-to-market team is a big part of what a fractional CMO can deliver.
  • Strategic Advisor – A fractional CMO will also provide the CEO and other leaders with unbiased strategic counsel by leveraging their experience and “outsider” perspective. This is a valuable point of view which internal teams often do not have access to.
  • Improved CEO Focus – Many CEOs get distracted by managing the marketing function, and managing marketing/sales friction. An experienced fractional CMO is a self-managing executive that will lighten the CEO workload by managing all aspects of the marketing department. This frees the CEO up to focus on other important aspects of the business.
  • Accountability – A properly structured fractional CMO engagement ensures that the CMO develops the growth strategy and implements the marketing plan. There is a built-in accountability for performance and results.

Common Use Cases for a Fractional CMO

As you can see, there is a significant value proposition for engaging a fractional CMO. What might be less clear are the common situations, or use cases, where a fractional CMO makes the most sense. Here are a few:

  • Emerging Growth Company – For smaller organization that have big growth plans (yearly revenue between $5-50M) engaging a fractional CMO will free up capital to bring on experienced implementers and accelerate growth.
  • Leadership Vacuum – Perhaps because of an executive departure, or by virtue of rapid growth, the marketing group is suffering from a lack of vision or leadership. In many organizations, marketing is an after-thought behind sales and thus largely ignored, delegated to a well-intentioned but inexperienced staffer, or handed off to outside agencies who have their own agenda. In either case, the marketing function and potential for growth go sideways without a capable leader. An experienced fractional CMO can create or rebuild a marketing organization, and provide mentorship and growth opportunities to the team.
  • No Growth Strategy – The senior leadership team and board of directors want growth, but are not sure how to develop a strategy or plan to achieve it. This is a common situation for an experienced fractional CMO to come in and take the lead.
  • Missed Market Opportunities – The organization consistently lags industry growth. New products or services have failed to launch effectively, and languish as a result. Aggressive competitors are consistently winning deals that the company used to win. These are all signs of a failing strategy (or lack of one!) A seasoned CMO is the answer.
  • Lack of ROMI Clarity – The company invests in marketing tactics like tradeshows and search engine ads, but has no idea what drives new business. This lack of insight and metrics means the company has no idea of its marketing ROI (ROMI). An experienced CMO will ensure this gets fixed.
  • Marketing / Sales Divide – Another common ailment in many organizations. In cases where marketing and sales are misaligned, or entirely dysfunctional, an experienced fractional CMO can quickly get things back on track. In the best run go-to-market organizations, marketing enables sales.
  • Change Management – There are cases where a CEO, board, or private equity company want to get an honest assessment so that they can affect change on the go-to-market organization. This is a perfect use case for a fractional CMO to parachute in, triage, and rebuild the marketing function.

Three Possible Actions…

When confronted with the strategic imperative to grow the organization, leaders can take three possible actions:

  1. Do nothing – Sadly, this is the most common path. Instead of investing in marketing leadership, the decision is to continue down the same path, expecting a different result. The poor results are entirely predictable, and preventable.
  2. Go sideways – Due to fear, uncertainty, and a lack of conviction, some leaders hand off marketing to a junior member of the marketing team. This well-intentioned and convenient solution generally does not yield much growth by way of results. After kicking the can down the road for a while, thoughtful leaders revisit the decision and bring in a seasoned marketer to define strategy, tactics, and execute.
  3. Go forward – Strategic leaders recognize the value of delegating the creation and execution of a growth plan to an experienced CMO. If they cannot justify a full-time CMO, they will engage a fractional one.

Getting Started with a Fractional CMO

A fractional CMO is a part-time CMO who delivers full-time strategic results. As an experienced CMO, they will not only develop growth strategy, but also own execution of the plan.

Regardless of the use case that causes an organization to consider engaging a fractional CMO, they will deliver significant value – from developing strategy, to aligning marketing and sales, to mentoring a marketing team, to market positioning and messaging.

Every growth organization needs a CMO…and with the fractional CMO option, there is no excuse for not having one.

-Onward

The Value of a Chief Marketing Officer (CMO)

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“Because the purpose of business is create and keep a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” – Peter Drucker

There may be no more critical, yet inconsistently defined, senior leadership role than that of Chief Marketing Officer (CMO).

For any organization seeking to grow (dare I say that should be every organization!) having an experienced marketing leader is vitally important.

In collaboration with other senior leaders, the CMO is responsible for presenting the organization to the market, developing the strategy, and then executing the go-to-market plan to drive growth.

Does your organization need someone with the skills and experience required to be a CMO?

The answer is, “it depends.”

To define the unique value of a CMO we must think through several challenging aspects of the marketing function that sometimes feel like a Catch-22. These are:

  • Every CMO is a marketer, but not every marketer is a CMO.
  • Every company needs a head of marketing, but not every company needs a chief marketing officer (CMO).
  • The purpose of marketing can mean something very different between organizations, depending on factors like the industry and customer target (i.e. B2B vs B2C)

Defining the CMO Role

Before we define the unique value of a CMO and explore whether you need one, let’s begin with a high-level job description:

Chief Marketing Officer (CMO) – Responsible for overseeing the planning, development and execution of an organization’s marketing and advertising strategy. Reporting directly to the CEO, the CMO’s primary responsibility is to help generate revenue by increasing sales through successful marketing for the entire organization, using market research, pricing, product marketing, marketing communications, advertising and public relations.

In many organizations, the scope of the CMO role expands to include sales enablement, sales team management, new business development, product development, channel partner management and customer success.

The Chief Marketing Officers is a member of the company leadership team and usually reports to the chief executive officer. In larger organizations, it is common to have a number of senior marketing managers responsible for various parts of the marketing strategy reporting directly to the CMO.

NOTE: The CMO role has traditionally been a full-time, in-house executive position. However, in recent years, as the value proposition and complexity of marketing strategy have increased, there has been a growing number of the part-time CMO or Fractional CMO roles. Stay tuned for an upcoming article that will explore the value proposition and use case for a fractional CMO.

The Unique Value of a CMO

It is true that every CMO is a marketer, but not every marketer is a CMO.

Once you understand the true complexity and scope of the CMO role, you can begin to see that it is a challenging role. Only the most seasoned and experienced marketers, typically those who also have extensive company leadership experience and strategy development in their background, can be effective as CMO.

Furthermore, while every company should have a head of marketing, not every company needs a CMO.

There are a number of variables to consider when answering the question of whether your organization needs, and can justify having a CMO. The answer is ultimately very company-specific. However, there are some general factors to consider that can help make the decision. Rate each of the following criteria for your organization, on a low-to-high (or, small-to-large) scale:

  • Size of company
  • Company growth ambitions
  • Product/service value
  • Market size
  • Geographic scope
  • Market ecosystem complexity
  • Lead sources
  • Complexity of buyer’s journey
  • Length of sales cycle
  • Sales channels
  • Size of go-to-market (marketing and sales) team
  • Customer lifetime value
  • Industry competitiveness

Scoring: Generally, the higher you rank your organization on most or all of the above criteria, the more you can justify and should consider having a CMO on your leadership team.

The CMO Role is Complex and Evolving

As you saw in the brief job description above, the CMO role is complex. It is also rapidly evolving to meet unique company and market dynamics. The increasingly disruptive VUCA (volatile, uncertain, complex, and ambiguous) environment that most organizations now operate in is just adding more fuel to the fire.

Driven by the forces of technology, increasingly complex digital interactions with the marketplace, and the growing ubiquity of social media channels, the marketing role has a growing sphere of influence in many organizations. The expectation is for the modern CMO to drive growth, deliver the brand vision and manage the customer experience across all touchpoints and intersections: print, digital, retail, mobile, social and more.

The role of marketing no longer ends with a sale. That is just the beginning. The span of marketing now extends into building relationships and delivering value to customers throughout their buyer journey. To be successful, CMOs must create and maintain a delicate balance between growth strategy, brand purpose and value, customer success, employee engagement, creative, technology, data and analytics.

Easy, right?!

Once you decide that your organizations needs a CMO, you must also think about what type. Depending on the maturity of the organization, the industry, the growth objectives, the skillsets and interests of the CEO and leadership team, and the type/scope/complexity of the sales process there can be different focal points for the CMO. This examination will drive different requirements for the CMO and create a different profile for the role.

An upcoming blog will examine the most common CMO archetypes.

More than Just a Marketer

While it is true that a head of marketing, a VP of marketing, and a CMO all have responsibility for the marketing function, that is where the similarity ends. The level of experience, strategic vision, and cross-functional leadership that a CMO provides is what sets them apart.  

A CMO is much more than just a great marketer for the organization’s products and services. They are growth strategists and partners with the CEO to promote the company and its vision. They collaborate with the leadership team to formulate the growth vision and strategy, and lead the execution of the go-to-market plans that propel the organization into the future.

Every CMO is a marketer, but not every marketer is a CMO.

-Onward