Finding your perfect outsourced CMO (detailed)

At HireCMO, my team and I specialize in finding an outsourced CMO that's perfectly fit for the Series A startup or mid-market company. Having spoken to several founders, CEOs and CMOs over the last year, we've taken all our learnings and mistakes, and summarized it in the chapters below. Let's dive in! And btw, email me at [email protected] if you have anything you want to discuss! :)

What is an outsourced CMO?

An outsourced CMO is a strategic marketing partner (often interim) who brings executive-level expertise on a flexible basis, allowing cost-effective execution of marketing strategies to bring more revenue to your startup/business.

I have seen the outsourced CMO often be called a fractional CMO, part-time CMO, interim CMO, etc. but the point is that this person becomes your go-to marketing person for your team.

What is the role of an outsourced CMO?

An outsourced CMO is typically known for the following strategic work:

• Develop marketing strategies aligned with your growth milestones for the next 30-60-90 days.
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• Align your sales, marketing and product teams so everyone's efforts work hand-in-hand to acquire more customers, and your inbound/outbound campaign messaging don't "clash" and confuse prospects.
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• Define your product's brand identity, ensuring consistency across your inbound/outbound channels, to ultimately establish a compelling market position amongst your customers.
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• Implement (i.e., actually do the work) targeted lead generation tactics to bring more high-quality customers through the door, using a mix of digital marketing, content creation, and other effective channels - e.g., ads on Meta, SEO, video content on LinkedIn, etc.
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• Introduce, build and maintain relationships with external marketing partners (like SEO agencies) so that everyone in the picture understands the goals of your company's marketing efforts.
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• Mentor your team on how to build, refine and measure the effectiveness of your overall marketing strategy, and also vet candidates for your next hires as you expand your marketing team.
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• Provide quarterly investor updates to your venture capital firm/angel investors, along with your Board, so you (as the CEO) can focus on the more operational parts of your startup. This one's a bit less known but super valuable.
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• Utilize data analytics and market research to refine/fix your marketing efforts, lower CAC by optimizing campaigns and continuously learn from what works vs. doesn't work, so your company can keep acquiring customers profitably.

I'll be honest, this isn't everything. But it's 75% of what an outsourced CMO typically does for a company under $10M annual revenue. As your business grows, your team(s), product(s) and company's needs will evolve, making your chief marketing officer spend their time accordingly on things that actually push the needle.

I've gone and interviewed some of our CMOs on HireCMO. You may enjoy reading their interview. Pretty insightful, and unintuitive: Nancy and Brad's interviews are my personal favorite.

How can an outsourced CMO impact your startup?

An outsourced CMO is typically hired to help a startup escape their stagnant growth, by a switch up in their marketing strategy, upgrading the skills of their marketing team and significantly improving the ROI of marketing campaigns.

That's the short answer. It's honestly much more than that. You should be bringing in an outsourced CMO to bring more revenue through the front door. That's it. A marketer's job (at every level) is to make sure your product's positioning/messaging resonates very well with your market/prospects/customers. And then consistently "do things" to bring more of your champion customers through your front door.

This can be done via:

Revise your current marketing strategies

What this means: The outsourced CMO will kill off what's not working, optimize low ROI marketing campaigns and double down on marketing initiatives that consistently deliver good results.

Why this is important: This will lower your burn (marketing budget) on things which weren't bringing in customers (e.g., you hired a virtual assistant to write 10 articles a month, but none of them are SEO optimized and they're charging you $2000/month). And also, doubling down on what works, means there will be more top-of-funnel prospects for your company, allowing your teams to qualify them (i.e., make sure they truly fit the ICP you're looking for, handing them to your sales team).  

Keep everyone accountable to KPIs

What this means: Metrics make the world go round, no matter how much you and I may not like to hear that. It doesn't matter how many marketing professionals you hire, or how "busy" your marketing department looks. What's critical to track is how is their work impacting the bottom line of your business. And metrics help hold everyone accountable.

Here are the KPIs (Key Performance Indicators) that outsourced CMOs typically work with:

1. CAC (Customer Acquisition Cost): The cost incurred by your startup to acquire a new customer.
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2. CAC Payback Period: The time it takes to recoup your customer acquisition costs (CAC) through the revenue generated from said customer. Important one!
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3. CLV (Customer Lifetime Value): The total revenue (revenue) from a customer throughout their entire relationship with your startup, across different products or services, and across all subscription lifecycles.
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4. MQL (Marketing Qualified Leads): Leads that have been identified as more likely to become customers based on specific marketing criteria.
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5. SQL (Sales Qualified Leads): Leads that have been qualified by the sales team as having a higher likelihood of becoming paying customers. This is what I meant earlier by your (sales) teams qualifying the inbound prospects, handed to them from your marketing efforts.
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6. MQL-to-SQL Conversion Rate: The percentage of Marketing Qualified Leads (MQLs) that progress to become Sales Qualified Leads (SQLs), as discussed in the previous KPIs above.
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7. SQL-to-Customer Conversion Rate: The percentage of Sales Qualified Leads (SQLs) that ultimately convert into paying customers for your startup.
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8. Pipeline Velocity: The speed at which leads move through the sales pipeline. This indicates how efficient your sales and marketing teams are.
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9. Conversion Rate: The percentage of visitors to your website who take a desired action (e.g., making a purchase or filling out a form) out of the total number of visitors. This can depend highly on what you're measuring. For us at HireCMO, we love to measure what percentage of website visitors book a discovery call with our founder.
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10. Lead-to-Customer Conversion Rate: The percentage of leads that turn into actual customers for your product(s) and service(s).
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11. LTV:CAC Ratio (Lifetime Value to Customer Acquisition Cost Ratio): The ratio of Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC), providing insights into the long-term profitability of acquiring customers. According to David Sacks, a good LTV to CAC (Customer Lifetime Value to Customer Acquisition Cost) ratio for a healthy startup is 3:1. This means that for every $1 spent on customer acquisition, the startup should aim to generate $3 in customer lifetime value!
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12. Churn Rate: The rate at which customers stop subscribing or using a service, indicating customer attrition. Did you know it's cheaper to retain a customer than to acquire a new one?
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13. NPS (Net Promoter Score): A metric that assesses customer loyalty and satisfaction by asking customers how likely they are to recommend the product or service to others.

Why this is important: Without an objective marketing leader in the picture (in this case, your outsourced chief marketing officer) it's likely that your physical and digital marketing efforts are a "throw shit at the wall and see what sticks" approach. You laugh, but that's true for so many startups under $10M annual revenue. A marketing strategy should have legs. And the marketing department executing on it, must be held accountable to goals that the CEO is aiming for. And KPIs allow you to do just that.

Screw the politics, just do the work

What this means: A marketing strategy must not be influenced by anything other than real, objective, raw data. If you're inclined to spend money on say, search engine optimization because your CEO knows someone who's looking for a job... well, that's not fair to your customers, investors, Board and team. Get real.

Bringing a qualified outsourced CMO into your team prioritizes trust, incorporates outside perspectives (that may actually work!), and can democratize your access to top marketing talent without compromising on your own personal image inside the company i.e., you bring the bad guy by pointing out the obvious that your CEO may not agree to. Sorry, but that's reality. Optics are important to everyone, to some more than others.

Why this is important: Bringing in a non-political outsourced CMO into your team can be beneficial because they are typically not influenced by internal office politics. They want the job done and fast, because it makes them (selfishly) look good. In my experience with our CMOs at HireCMO, they are less focused on optics and more concerned about the points we discuss in the first half of this article. This may seem trivial to you, but if you're a 15+ person startup, you (as a CXO/founder) will begin to notice people acting a certain way around you vs. behind closed doors. A person brought in from a fractional CMO company is immune to that.

Bring everyone on the same page ASAP, no exceptions

What this means: Without a trusted marketing leader (i.e., your fractional/outsourced chief marketing officer), it's likely that your existing marketing team, sales team and product team are running their own individual show. Although this may seem "agile" at first, the problem is that your prospects start receiving mixed signals. Here's a common scenario:

1. On your landing page (marketing team responsibility) your future customers may be told that your product does X.
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2. Then they book the call and get on a 30-min discovery session with your sales team (sales team responsibility) and now the prospect realizes your product doesn't reaallly do X but it does do Y and Z, and X is on the roadmap 2 months out. The prospect is now a bit confused, but decides to give your product a shot in the hopes that they'll be able to use X soon.
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3. Your sales team now tells the product team that many of the current customers really want that X feature. And now your product team is mad because X isn't even a feature that serves your primary market.

And this... is how startup teams "stay busy" but don't get much ahead, or get product market fit. And you want to avoid this.

Why this is important: You want to save time and increase your product shipping velocity. You want to hear out your best customers' problems and retain them. You want to increase your sales team's effectiveness. And of course, you want to make sure you implement marketing strategies that return high dividends (results) for your startup consistently.

All these goals are impossible if you have your teams operating in silos and doing what they think is best. You as the CEO/founder have a responsibility to make sure these teams are working cohesively together, and having an outsourced CMO can make your life easier, because this is quite literally part of their job description.

Put another way, if your Chief Marketing Officer herself isn't doing what I just wrote about above in the first 4-6 weeks, you need to look for another more capable leader. Whether she's in-house or outsourced.

What are some risks of hiring an outsourced CMO?

Risks of hiring an outsourced CMO may be their initial lack of control over core business processes, misalignment in expectations or communication gaps. But this role is just like any other, so there are well-tested ways to reduce said risks.

I've spoken to our CMOs who have over 23 years of experience with this, and here's what I was educated with:

Have extremely clear-cut milestones they have to hit

Your outsourced CMO is not a low-risk freelancer hire. They are a C-suite executive on your team, and although this may be temporary, that should not diminish the weight of their role and impact on your business. And all this must be clearly established from Day 1, in your calls with this person, contracts you present and regular meetings you have.

Having defined and reasonable milestones for them to hit, holds them accountable to a goal, and keeps your marketing team efforts tied to a "north star". Building a comprehensive marketing strategy is useless if your team can't use it effectively to bring more customers through your door and turn your startup in a cash cow (as we at HireCMO like to call it haha).

I suggest your milestones are tied to tangible and quantifiable goals (output) rather than input. So don't ask for "X number of marketing campaigns", but rather "X number of customers by Y month". Where you feel that your milestones are too qualitative as opposed to quantitative, you should have accountability check ins, which may include a daily 15-min touchpoint for the first 2 weeks, followed by two 30-min touchpoints each week with yourself (as the CEO/founder) and other sales and product leaders in your business. Do not take this lightly. If your outsourced CMO does not respect you or your milestones, you're just burning your time and money.

Overcommunicate your expectations

This doesn't just apply to how/when you communicate with your outsourced CMO but also what you expect of them overall as they spend time with your team and company. Not just revenue and marketing leadership, but also clearly stating who you want them to be for you and how you want this person to transform your team's capabilities over the following 3-6-9 months.

Sometimes, when you bring someone in, who can hit the ground running, it can actually motivate your teams and up their morale! These things are hard to quantify. A solid Chief Marketing Officer with a proven track record has had to work with demoralized team members across many companies, and is typically able to provide guidance to you about how she can help. I suggest you push for that conversation! Remember, a solid outsourced CMO isn't just here to execute marketing strategies, they're here to upgrade your management team and build a company that your employees will be proud to be a part of - they are a partner! :)

Clearly define reporting structure for everyone

You need to get your house in order first, before you even hire your outsourced CMO.

The last thing you want is confusion here. Make sure your founders/CXOs and other marketing and non-marketing leaders across your company are 100% aligned on who this person is, what their role will be holistically and who will be directly accountable to manage this person. Do not leave anything to confusion or handwavy.

Before you hire the final candidate, do a 60-min group introduction to the leaders that your CMO will be working with. Make sure the reporting structure is clear on this call, so that everyone is aligned. And then, encourage 15-30 min calls between the leaders and the candidate, so they can get to know each other. And finally, you as the hiring manager/CEO/founder need to have a conversation with this final candidate to ask if they agree with the reporting structure, answer any questions they may have, and double-check that you have their full mental buy-in. Highly underrated. Please, do not skip this step.

Where do I find an outsourced CMO?

After vetted CMOs who have 23+ years of marketing leadership experience, I can confidently say that the most reliable place to find an outsourced CMO is HireCMO.io. And I'll tell you why:

1. We're a tight-knit shop. Every conversation we have is shared intimately with our founder and team of CMOs so we can collectively find the right person to help you. No backchannel conversations, just pure honesty from Day 1. And if we know we can't help, we'll refer you to someone who can! :)
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2. We do our homework. Before every interaction with you, we leverage our own CMO's expertise to research your brand's digital footprint, team structure, etc. so we can come into the call with insight you can use. Every phone call starts with an objective and ends with next steps. Without fail.
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3. We're fairly priced. After speaking with our competitors and prospects, we've figured out the price point that makes the most sense. And we're honest about it form Day 1. Just ask and we'll share.

Wrapping up

I admire you for reading this article. I wish you the best in your journey to finding the person for your startup. And if you want to have a live call to jazz on hiring, book a call with our founder directly. Bye now!