Chief marketing officers (CMOs) have the primary goal of increasing your organization’s revenue. Sounds great, right? Unfortunately, full-time CMOs often fall outside of the budgets of startups and small and mid-sized businesses.
That’s where fractional CMO services come into play. These services give businesses the opportunity to access executive-level services on an as-needed basis. With a fractional CMO, your organization can benefit from impactful, part-time executive leadership that matches your priorities and aligns with your unique business needs.
While fractional CMO services offer an opportunity to save costs while still benefitting from expert leadership, budgeting can be difficult to navigate. You may wonder:
- How much do fractional CMO services cost?
- How can I get the most value out of fractional CMO services?
- How do fractional CMO pay structures work?
In this blog, we answer these questions and more.
How Much Should a Fractional CMO Charge?
A fractional chief marketing officer for startups or other small and mid-sized businesses should cost less than a full-time CMO. According to Glassdoor, the average full-time CMO salary (before benefits) is $340,411 per year.
Cost savings is one of the top advantages of hiring a fractional CMO. However, it’s important to have the right expectations in place to get the most value out of fractional executive services. Fractional CMOs aren’t a one-for-one replacement for full-time CMOs. Instead of covering every single aspect of the role, these services focus on the initiatives that are the highest priority for your business.
Fractional CMOs can work on an hourly, monthly, or project-based schedule. Depending on your organization’s needs, certain structures are more effective. For example, if your goal is to improve a campaign’s performance, it may make sense to keep a fractional CMO on a monthly retainer so you have consistent access to their expertise. On the other hand, for a research-based initiative, you could get more value out of an hourly agreement.
For more information on how to navigate fractional CMO pay structures, reach out to our team.
How Much Is a Fractional CMO’s Hourly Rate?
The fractional CMO’s hourly rate typically ranges between $200 and $350 per hour, according to LinkedIn. Understanding the fractional CMO’s hourly rate is crucial for budgeting, as factors like years of experience and other qualifications will impact rates.
To get an idea of how much a fractional CMO would cost your business compared to a full-time marketing executive (with a yearly salary of $340,411), consider the following situations:
Calculation: (Hours Per Week) x (52 Weeks Per Year) x ($200 or $350 Per Hour)
- 10 Hours Per Week: $104,000 – $182,000 per year
- 15 Hours Per Week: $156,000 – $273,000 per year
- 20 Hours Per Week: $208,000 – $364,000 per year
- 30 Hours Per Week: $312,000 – $546,000 per year
- 40 Hours Per Week: $416,000 – $728,000 per year
As you can see, fractional CMOs offer the most value when working up to 20 hours per week.
How Many Hours Does a Fractional CMO Work?
For most small and mid-sized businesses, 10 to 20 hours per week is enough to experience a positive impact from fractional CMO services. As we covered in the above section, this is also the range where you get the most financial value.
To get the most benefit from fractional CMO services, prioritize projects that will have a significant impact on your marketing ROI. Fractional CMOs can lead and execute both short-term and long-term marketing campaigns to drive customer acquisition, increase sales, and promote sustainable growth. As an exercise, consider how much more effective the following initiatives would be with 10 to 20 hours per week of expert marketing leadership:
- Increasing customer lifetime value
- Penetrating a new market
- Growing your marketing team
- Increasing your campaign and advertising ROI
- Improving analytics for marketing initiatives
To see how to make fractional CMO services work for your organizational goals, reach out to our team.
How Much Does a Fractional CMO Cost Per Month?
Monthly fractional CMO costs depend on both the scope of the role and the pay structure. Using an average hourly rate of $275, we can estimate that hiring a fractional CMO for 40 hours a month would cost $11,000 per month (or $132,000 per year). For 80 hours a month, the monthly cost would be about $22,000 (or $264,000 per year). Fractional CMOs can significantly enhance the efficiency and strategy of your marketing department, providing leadership and optimizing functions without the need for a full-time CMO.
Depending on the needs of your organization, you may opt instead to work out a monthly retainer cost with your fractional CMO. This would make costs more predictable, as pay would be productivity-based rather than hourly.
Get in touch with our team to learn more about your options when working with fractional CMOs.
How Are Fractional Executives Paid?
Fractional CMO companies provide services based on the following pay schedules:
- Per Hour
- Per Month
- Per Project
This level of flexibility is what makes fractional CMO services helpful for businesses with limited resources. Fractional CMOs optimize marketing efforts, delivering unified marketing campaigns that enhance business growth. Instead of investing in a full-time CMO who you might not actually need year-round, you can focus your resources on the projects that matter most.
Schedule an appointment today to learn more about fractional CMO services.
