Marketing executive sitting in an office with a laptop.

Fractional CMO: Implementation Advantages and Challenges

Do you know the term fractional CMO? Also known as fCMO, Virtual CMO, Outsourced CMO, CMO On-Demand, as a Service (CMOaaS) is a chief marketing executive who works part of the time or on demand for one or more companies. As part of their efforts to overcome market challenges, companies and professionals are adopting innovative approaches to establish working partnerships.

Recruiting a fractional CMO is not a novel concept, and many marketing agencies already facilitate connections between contractors and employers. However, the rise of the so-called open talent economy has reached new heights, and it’s increasingly replacing traditional recruitment methods for senior positions.

It’s not uncommon to see excellent executives on LinkedIn with a plethora of experience looking for a job. Fortunately, on-demand contracts are very attractive to companies and create opportunities for high-level specialists with an entrepreneurial flair. In this context, the Chief Marketing Officer is one of the positions that has undergone a makeover.

Demand is growing, but supply is still higher

The rapid growth of the fractional executive market is impressive. From 2020 to 2021, the number of independent as-a-service chief executives grew by 34% in the US. But supply is still greater than demand.¹ ²

A survey by the companies Duct Tape Marketing, Databox and ActiveCampaign among 260 marketing professionals, shows some interesting data on the subject. The survey revealed among those executives:

  • Active fractional CMOs: 48.66%

  • Agencies offering fractional CMO services: 17.62%

  • CMOs considering transitioning to fractional CMOs: 14.56%

  • Companies that have hired fractional CMOs: 6.13%

  • None of the above: 5.75%

  • Agencies considering offering fractional CMO services: 4.60%

  • Companies considering hiring fractional CMOs: 2.68%

According to the survey, fractional CMOs work mainly for companies in the following sectors:

  • SaaS, Software or Technology;

  • Professional Services;

  • Advertising and Marketing.

A very similar result was found in a survey of fractional directors from various areas (not just fractional CMOs) in New Zealand. According to Fractional.co.nz, almost 70% of fractional leaders in the country work in the Technology and Saas sector.

Within this subset, the areas of Software, Hardware, Green Tech and Deep Tech stand out. In second place, with more than 40% of the leaders, is the Broad Industry Experience area. On the other hand, less than 10% of the leaders interviewed said they worked in sectors such as Climate and Environment, Construction, Manufacturing and Agriculture and Forestry.

Over the years, the success of companies in hiring fractional CMOs has shifted the perspective of even the most skeptical executives. Research by Chief Outsiders indicates that, in the past five years, the hiring of fractional CMOs has increased by over 60%.

Additionally, Gartner reports that 67% of companies that have hired a fractional CMO have observed improvements in the strategic direction and execution of their marketing efforts, helped by these executives.

As we can see, it’s a booming market, but one that also requires adaptation. Being a fractional CMO requires a lot of work, and not just in the traditional sense of the word.

Defining the scope of work and contract, determining fair remuneration, educating clients, and equipping yourself with the right solutions to optimize your deliveries are essential for success in the on-demand segment. 

What is a fractional CMO?

In the words of Gabrielle Pritchard, an experienced fractional CMO in New Zealand:

“Fractional work is Domain Expertise (for every domain: Fractional Product, Sales, Finance, etc) in addition to Leadership Experience minus the full-time-employee costs. Typically, it’s 2 days a week for a set period.”

In other words, C-Level executives in this context do not have an employment relationship with the contractor. They do not dedicate 100% of their time to a single client and there is no exclusivity, yet they consistently deliver high-quality results.

Main services offered by the fractional CMO

Data from Duct Tape Marketing, Databox, and ActiveCampaign reveals that 70% of fractional Chief Marketing Officers (CMOs) have at least 10 years of experience in the field.

According to the Insights survey, the primary services they currently offer or plan to offer include: srategic planning, marketing strategy development, personalized strategies and content development, digital marketing and more:

Main services offered by the fractional CMO
Main services offered by the fractional CMO

The deliverables of the fractional CMO vary according to the purpose for which they were hired. Generally, the fCMO, with the support of other directors, creates marketing strategies, structures a team, and coordinates and supervises operations. To do this, they are immersed in the business’s overall landscape and corporate culture.

It’s important to recognize that the role of an experienced executive extends well beyond marketing. Proficiency in technology, adeptness in data analysis, and essential traits such as embracing change, adapting swiftly, and effective communication skills are indispensable.

Moreover, when considering the responsibilities of a fractional CMO, we must also emphasize an entrepreneurial mindset, which includes strategic thinking about their own career path.

When to hire an fCMO?

Fractional CMOs often collaborate with companies and startups in their early stages, during restructuring, or when leadership roles need filling.

But what about marketing consultants? Wouldn’t hiring them be better? That’s a fair question. Let’s explore the distinctions between these two professionals and how to maximize their contributions effectively.

fCMO or marketing consultant?

At its core, the distinction between a fractional CMO and a marketing consultant lies in the depth, duration of engagement, and the nature of services provided. Here are the key differences:

FCMO:

  • They make a medium to long-term commitment by becoming a temporary part of the company;

  • This involves familiarizing themselves with the business culture and daily operations;

  • They have decision-making power and can participate in high-level strategic decisions;

  • They develop strategies, participate in planning, and oversee execution. As a marketing leader, the fractional CMO can be actively involved in every stage of the process.

Marketing consultant:

  • They make short-term commitments and focus on immediate results;

  • They don’t have the decision-making authority to implement changes;

  • They create plans for specific campaigns and provide support to the marketing team. Typically, they focus exclusively on the tasks for which they were hired and do not engage in other responsibilities.

Fractional CMO or Marketing Consultant?
Fractional CMO or Marketing Consultant? (Image: Fastdezine)

It should be noted that the work of the fractional CMO does not cancel out that of the marketing consultant, and vice versa. While the former offers continuous and integrated executive leadership, the latter provides an external perspective and temporary solutions to specific needs. Ultimately, the choice of the ideal professional depends on the unique needs of the business.

5 Benefits of Fractional CMOs for Companies

Many industries, particularly those in the tech sector, are beginning to recognize the advantages of hiring a fractional CMO 

Here are some key benefits:

1. Strategic Guidance: fCMOs bring extensive experience in creating marketing strategies, offering valuable strategic direction for companies;

2. Expertise and Skill Gap Filling: They can fill gaps in a company’s internal team;

3. Cost-Effectiveness: fCMOs are more affordable than full-time managers, allowing small businesses and startups to access top-tier marketing leadership without straining their budgets;

4. Unbiased Perspective: An external fCMO offers a fresh, unbiased perspective, which is highly valued by CEOs. They can identify opportunities and challenges that might be overlooked by an internal team;

5. Flexibility and Agility: fCMOs are adaptable and quick to respond to market changes and demands. Their commitment to staying current with industry trends is crucial for maintaining a competitive edge.

However, it’s important to consider some potential challenges as well. Let’s explore these challenges.

Main challenges of implementing fCMOs for companies

It is clear why technology and innovation companies are early adopters of fractional executives. These businesses are created and developed in uncertain scenarios and naturally embrace change and innovation. Even so, there are challenges in adopting fractional CMOs:

  • Finding the ideal fit: as with any type of hiring, the right cultural fit is very important. When selecting a fractional CMO, it is essential to understand whether this professional is compatible with the company’s purposes and values;

  • Limited availability: because they work with several clients, the fractional CMO can have a tight schedule. Therefore, establishing a routine and expectations from the outset is indispensable;

  • Communication can be an issue: since the fCMO is not present in the company every day, he or she can miss out on important information. To avoid this, it is important to determine channels and frequency of communication;

  • Concerns about confidentiality: companies are expected to have rules of secrecy and exercise caution when sharing sensitive information with external partners. However, this can be resolved by creating and signing confidentiality agreements, permissions and personalized access to files;

  • Acceptance of external talent: Some companies may worry that hiring external talent could create dependency and be a negative addition. However, this issue can be mitigated if the company has an internal professional, such as the CEO, with marketing knowledge to collaborate with the fCMO and retain the expertise in-house.

Key Challenges for Fractional CMOs while Providing Services

There are always two sides of a coin, some obstacles are to be expected. The main challenges facing a fractional CMO are:  

  • Uncertainty: Like any temporary role, fractional CMOs experience less stability. To mitigate this, they must focus on building their personal brand and networking;

  • Personal Management: it’s important to keep track of finances and your schedule; be on the lookout for the next job opportunity and avoid long periods of inactivity;

  • Work-load: the fCMO’s working day can be more intense than that of a full-time executive. It’s 100 meters, not a marathon. This is because they usually work with several clients simultaneously. To cope with this, fractional CMOs need balance, self-knowledge and always to recharge their batteries;

  • Task Overload: professionals need to be careful not to overload themselves with administrative and daily tasks, as this is not the best use of their time and investment. Therefore, they must learn to say no when necessary.

For fractional CMOs, certain elements directly impact the success of their work. According to data from Duct Tape Marketing, Databox, and ActiveCampaign, fCMOs ranked these factors in the following order:

Key Challenges for Fractional CMOs while Providing Services
Key Challenges for Fractional CMOs while Providing Services

While companies are adapting to welcome fractional CMOs and CMOs are adjusting to the evolving market needs, marketing agencies are also stepping up to bridge the gap between businesses and executives, striving to create the perfect match.

How do fractional CMOs impact marketing agencies?

A growing number of marketing agencies are offering the service of fCMOs to their clients. According to data from Duct Tape Marketing, the majority of agencies have some involvement in offering fractional CMO services:

  • 17,65% are actively engaged with numerous ongoing engagements;

  • 47,06% are moderately engaged with a few ongoing projects;

  • 21,57% are exploring the model and considering future engagements.

The survey indicates that these agencies have adapted the fCMO model smoothly, with little to no difficulty. The benefits of offering the services provided by these executives are substantial, including strategic positioning and improved customer relations.

However, having partners who offer high-quality, on-demand marketing solutions can maximize these benefits. This is where Fastdezine comes in: we help fractional CMOs and marketing agencies achieve and exceed their sales objectives by providing adaptable, efficient, and success-oriented marketing solutions.

How can Fastdezine contribute to the fCMO’s work? 

When it comes to on-demand work, we’re experts. For more than 10 years, we have been delivering marketing solutions to marketing teams and agencies worldwide according to their needs.

We understand the challenges faced by companies, CMOs, and agencies. That’s why we’ve developed assertive, personalized, and cost-effective solutions, such as:

B2B Sales

Presto, a Fastdezine solution, is a personalized service for generating leads, connecting and scheduling meetings on LinkedIn.

Using a combination of marketing experts, processes and technology, Presto connects profiles directly to decision-makers. This approach significantly increases the effectiveness of prospecting campaigns and simplifies the B2B sales process.

Marketing Products

We increase the production capacity of marketing teams by offering a wide range of online and offline marketing products, such as graphic design, branding, UI/UX, web development, video, animation, social media posts, strategy and lead generation for B2B sales.

This allows fractional CMOs and marketing agencies to meet growing demands without the need to expand their internal teams.

Are you a fractional CMO? Do you have an agency focusing on fractional executives? Get in touch and find out in more detail how we can help you.

REFERENCES:

  1. https://marketing.org.nz/resource-hub/the-role-of-a-fractional-cmo-the-what-the-how-and-the-why
  2. https://ducttapemarketing.com/fractional-cmo-insights-survey-for-businesses-and-marketers/

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