Hiring a Fractional CMO

How small businesses can benefit from hiring a fractional CMO

My passion is helping small businesses attain sustainable growth, and in today's market, that may mean mitigating losses or even a significant pivot toward blue oceans (Chan and Mauborgne, 2004). With that said, let's address whether or not your small business can benefit from the discipline of the Chief Marketing Officer (CMO) role.

Do small businesses need a CMO?

When we think of a CMO, we tend to associate the role with large organizations strategically guided by a board of directors and operated by a C-suite of executives. That's not how your typical entrepreneur runs a small business, however.

The fact is that many small businesses don't even have a marketing department. Instead, the business owner adds this responsibility to their many other roles. That works when they have a marketing or even a sales background. However, according to David Court from McKinsey, "...the percentage of CEOs with marketing backgrounds has declined in [favour] of people from operations or finance" (Court, 2007). Therefore, it's not surprising that marketing gaps occur in most small businesses.

To help identify potential gaps, we can compare typical marketing functions within small businesses to that of the role of a CMO.

The role of a CMO and small business marketing

Jennifer Veenstra from Deloitte suggests that there are "5 roles of the CMO", as noted in the diagram above. Arguably, successful entrepreneurs are naturally strong in many but not all of these areas. Also, the challenge occurs when the business grows beyond its day-to-day operational reach, and these responsibilities are either delegated to other staff or fall off the radar.

Another concern is that many unfamiliar with the marketing role narrowly define it, emphasizing advertising, brand management, and market research (Court, 2007).

The potential gaps for small businesses

Companies that keep up with the high pace of technology benefit from innovative marketing tools and gain access to a rapidly growing wealth of data - providing more marketing-advanced companies with the potential for rich customer-centricity (Veenstra).

Companies that can't keep pace with technology risk falling behind the curve, creating noticeable gaps in their alignment with their target market. As this gap grows, the content created by a small business, such as website copy, marketing collateral, ads, and PR, continues to misalign the company with its marketplace further.

Their misalignment with the marketplace continues to grow along with the complexity of media and advertising vehicles available to reach and sustain customers. As Market Business News suggests, "[chief] marketing officers are responsible for not only their organization's marketing strategy but also product development, customer service, branding, pricing and sales management." Often, in smaller businesses, these functions are performed ad hoc and rarely aligned.

Market leaders in every category are using technology to align all customer touchpoints more tightly. As customers become more aware of this capability, their expectations increase and create a new level of status quo that the entire marketplace must meet.

For most small businesses, the customer touchpoints are through sales, marketing, and customer service. However, Neil St. Clair of Vestorly suggests that marketing alignment must be identified with organizations - recommending creating a new title - chief marketing and business development officer (St. Clair, 2015).

The disruptive role of the small business marketer

The pace of change in marketing is rapidly increasing. "At nearly every turn, marketing pursuits look vastly different in style, scope, and execution than they did just a few years ago" (Veenstra). For example, David Court suggests that "[consumers] knowledgeable about and comfortable with online research and sales will make many companies change their business models" (Court, 2007).

The rise of user-generated media and the capability to micro-personalize and localize advertisements is diffusing the role of previously well-positioned media (TV, radio, newspapers, out-of-home advertising, for example) and changing how consumers research and buy products. These changes are forcing marketers to "work more intensively than they have in the past… to develop, deliver, and communicate value propositions to consumers" (Court, 2007).

Today's marketers' new and evolving skills require specialization rather than a generalist approach - forcing companies to restructure their sales, marketing, and customer service roles while filling gaps through (often ad hoc) outsourcing.

How can a fractional CMO help?

You may already recognize many of these issues within your own business but can't justify hiring an executive that earns, on average, $159,000 per year (Chief Marketing Officer Salaries, 2019). I get that.

As Cathy Foster from The Business Journals suggests, "[a] fractional CMO is a great solution to gain the marketing-leadership you need with a lower level of cost, commitment and risk" (Foster, 2018).

The "fractional" aspect helps address cost concerns - you hire a contractor for as much time (per day, week, or month) and for as long as you need them; this can be on a cost per diem per project or retainer basis. "Engagements are usually for six months or longer so that you both have a high level of commitment to each other. Plus, marketing strategies and initiatives need time to take shape." (Foster, 2018).

Karen Tiber Leland, President of the Sterling Marketing Group, identifies additional benefits that you can leverage from hiring a fractional CMO. I have summarized them below.

• Establishing key performance indicators (KPIs) geared to drive business decisions and to address accountability toward budgets, revenue, and growth targets

• Bringing in external perspectives, insights, and expertise to help manage market disruptions

• Complementing internal skill gaps or missing specializations from the in-house team

• Leading a cultural transformation, marketing pivot, or repositioning of products that have become stagnant or are losing market share

• Leading interim marketing projects and new initiatives while your in-house team addresses day-to-day operational activities

• Auditing and aligning existing marketing collateral that is off-brand, fragmented, and weak

• Taking on an interim leadership role while you are recruiting for a new executive or covering a leave of absence

References

(2019, October 19). Chief Marketing Officer Salaries. Retrieved from https://www.glassdoor.ca/Salaries/chief-marketing-officer-salary-SRCH_KO0,23.htm

Chan K., W., and Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review

Chief Marketing Officer (CMO) – definition and example. Market Business News (MBN). Retrieved from https://marketbusinessnews.com/chief-marketing-officer-cmo-definition/

Court, D. (2007, August). The evolving role of the CMO. McKinsey Quarterly. McKinsey & Company. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-evolving-role-of-the-cmo

Foster, C. (2018, September 18). 5 Signs you need a fractional CMO. The Business Journals. Retrieved from https://www.bizjournals.com/bizjournals/how-to/marketing/2019/09/5-signs-you-need-a-fractional-cmo.html

Handley, L. (2017, October 5). What does a chief marketing officer really do? These days it’s all about doing more with less. CNBC. Retrieved from https://www.cnbc.com/2017/10/05/what-does-a-chief-marketing-officer-really-do.html

Leland, K., T. (2018, August 29). Need To Move Your Marketing Up a Notch? Try Hiring a Fractional CMO. Inc. Retrieved from https://www.inc.com/karen-tiber-leland/need-to-move-your-marketing-up-a-notch-try-hiring-a-fractional-cmo.html

St. Clair, N. (2015, March 15). Chief Marketing Officer Is The Most Dangerous Title Around. Forbes. Retrieved from https://www.forbes.com/sites/neilstclair/2015/03/03/chief-marketing-officer-is-the-most-dangerous-title-around/#264f7c9b296e

Veenstra, J. The 5 roles of the CMO. The multiple roles of the 21st-century chief marketing officer. Deloitte. Retrieved from https://www2.deloitte.com/us/en/pages/chief-marketing-officer/articles/five-roles-of-the-cmo.html