They're so popular now that my HireCMO team forced me to write this.. so let's dive in.
Outsourced CMO services involve hiring a part-time Chief Marketing Officer to upgrade your startup's marketing efforts, so they actually bring in more revenue! This arrangement allows startup teams to benefit from the expertise of a CMO without the burden of a full-time hiring budget. Yes you may not get them working for 40 hours a week, but if planned right (and if your startup's timing makes sense) 20-25 hours with the right marketing leader can bring a lot of dividends.
What an outsourced CMO will work on with your marketing team depends entirely on where your startup is today:
And so a good outsourced CMO will not pre-commit what they want to do for you. They'll want to do a thorough audit of what's working, your budget, your marketing team, your metrics (CAC, LTV, ACV, etc.) and come back to you with a 3-6-9 month game plan.
No one should try to "sell you" on marketing strategies because what works for Startup X, will likely not work as-is for your marketing team and customers. So be weary as you have conversations with candidates for your next outsourced CMO.
At HireCMO, we remove all that candidate-filtering-nonsense for you which can take 3-5 weeks if done by yourself. But I'm not here to sell you on our service, but actually provide helpful content so let's keep moving.
An outsourced CMO is a senior marketer who provides leadership, strategy development, and expertise to startups to help optimize marketing strategies and drive more high-quality customers.
I know. Pretty generic. I was disappointed too when I read this definition online... so then I asked our CMOs from my team to come up with something better and here's what they just emailed me:
This is probably 50% of what you could expected when hiring an outsourced CMO, but again results will vary based on what you need, what your weekly budget is and if you need someone leaning more on marketing strategy vs. hands-on "dirty" work as some customer told me the other day lol. Anyways.
This may be a wise option due to cost-effectiveness, hour flexibility, access to expertise, and the ability to provide unbiased perspectives on bringing more revenue growth.
But mileage may vary. I'll explain why.
I mean, do you want to save money or no? The annual employer healthcare insurance cost is around $7,739 for single coverage and $22,221 for family coverage for C-suite executives. And this is on top of that fat compensation package you're obligated to give them if they are let go. Guess who doesn't need any of this? An outsourced CMO. Just spend that extra saved money to implement marketing strategies that actually deliver results and train your management team! :)
Rapid onboarding. Hiring an outsourced CMO can be almost ..well, not instant but pretty darn fast. If you know what you really need, you can probably get this done in a week at most. Whereas, hiring a full-time CMO may take more time since it's a 40-hour a week permanent position.
Diverse perspective. An outsourced CMO brings an external viewpoint with ideas that might be considered "out of the box" by in-house standards. Once you hire someone permanently, they may also (yes it happens) be politically inclined to say certain things and be a certain way to keep your founder and CEO happy. Your outsourced CMO couldn't care less because their future doesn't depend on you. Well, not all of it any way.
Niche expertise. How many times have you realized that your recent hire (say for your marketing department) is great at X, but 6 months later when your digital marketing plans changed, you need them to be great at both X and Y. And so having an outsourced CMO lets you not tied down to a single CMO for the rest of your life and instead, you're able to easily switch things up and bring in a new person if things don't work out or if you just need someone who's great at that new thing you need them for. Remember, a good hire can bring a depth of experience in finding unconventional channels and untapped demographics, turning overlooked opportunities into cash for your checking account.
Fact fact btw, the average tenure for a full-time CMO is approximately 3.3 to 4.3 years, with the average falling around 3.5 years.
But even after all this, it may make sense to actually go with an in-house chief marketing officer. Towards the end of this article, we talk about the dangers of bringing in a fractional CMO because we respect your decision-making process, and we genuinely think you must know all the pros and cons to make a sound choice!
Outsourced CMO services typically cost 30% to 50% less than hiring a full-time CMO, with average annual savings of $102,858 to $154,429 in salary and benefits alone.
On our FAQ page (which today is really the homepage if you scroll to the bottom), I go into detail around our pricing packages at HireCMO. But generally, I've seen the average price of a fractional chief marketing officer hour being anywhere from $150 to $350 USD. Naturally, the more hours you need them for, the lower their average tends to be. This is the rate for January 2024, and this will change with time.
How much they'll charge, depends on whether you need them on a monthly retainer, or to execute on a project or just on an hourly as-needed basis. Typically, I've seen CMOs charge $10K-$20K per month for a fast-growing startup on a 6-month contract. But I've also seen under $10K contracts for smaller startups or projects.
Several factors including their level of expertise and experience, the scope of services required, the duration of your project, and the pricing structure (e.g., flat fee or hourly rate) and their/your geographic location. Additionally, the final cost may be influenced by the specific needs of your startup, the complexity of your current marketing challenges, and the potential for long-term revenue growth.
We go into a little more detail here about hiring for this role if it's your first time. You may find it useful.
Those offering CMO services may suffer from a lack of company-specific insight, potential communication challenges, and difficulty in fostering a seamless integration with the existing team.
Let's break each of these down.
Lack of company-specific insight. An outsourced CMO may struggle to fully grasp your internal culture, values, etc. potentially resulting in marketing strategies that lack a deep understanding of your brand. But to "fix" this problem, you can offer to spend 2-3 weeks at the beginning of their tenure having deep conversations about your product, sales, marketing, growth, operations, etc. to make sure they get a complete picture of your entire company - and not just your marketing efforts. Remember, although they may be part-time, you're not just hiring "a marketer", you're bringing in a leader who happens to be great at marketing. And so the better they understand you, your founding team dynamics and your product/service, the better they can help. Month 1 at HireCMO, is always reserved for auditing/understanding your brand. Always.
Communication challenges. Remote collaboration (which is usually the case) can lead to communication gaps between your outsourced CMO and your in-house team. This will, over time, hinder the smooth exchange of ideas, feedback, and updates critical. But if you're committed to spend upwards of $15,000/month on this role, it doesn't hurt to fly them out to meet your team prior to hiring them. You'd spend a grand sure, but it may help you skip a disaster by hiring the wrong person who's a disaster to work with! Generally, once you've had a few hours of offline interaction, you "get" each other and are able to lay some ground rules for your remote collaboration moving forward. Besides, remote work is pretty mainstream today.
Difficulty in team integration. Integrating an outsourced CMO seamlessly with your team may pose challenges, as differences in work styles, communication methods, and team dynamics will (in the short term) clash with your current way of doing things. But this is.. just like hiring for any remote role. And I personally think if you're startup doing $5M in annual revenue, you must have nailed some kind of process for hiring and working with external, remote workers. And so you'll get over this hump eventually.
Outsourced CMO services offer the benefits of access to diverse expertise, innovative strategies, cost-effectiveness, flexibility, improved ROI tracking, and scalability, enabling businesses to optimize their marketing efforts and drive growth.
I've already touched on some of the more unique points under "Why pick an outsourced CMO over an in-house CMO?" and our CEO will punch me if I make duplicate content in the same article ha. But here's one thing I forgot to mention!
Improved ROI tracking and reporting. Remember, your outsourced chief marketing officer can help your team improve their return on investment (ROI) tracking and reporting, and make sure that your digital marketing is (for lack of a better term) "working". They know way too many metrics and KPIs that you and I aren't even aware of. And they'll crisscross the data to make sure your costs are low, margins are high, and you're not losing money on every new customer you acquire. Cool right?!
To hire for this role, you should assess your actual need for senior marketing leadership, consider the financial benefits of accessing top-level talent, and ensure that the outsourced CMO's expertise aligns with your exact quarterly milestones and marketing gaps.
Naturally, as someone on the HireCMO team, I'm supposed to tell you to use our services as this'll just make this a week-long process at most. But hey, we also need you to be prepared to do this on your own. So here's the exact steps you should follow:
Step 1: Assess your startup needs. Truly evaluate your team's marketing needs for today and the next 3-6-9 months. This includes the need for expert leadership versus just hiring a tactical marketer. Ask yourself is you just need someone who understands Facebook ads for digital marketing, or a 20+ year experienced leader who'll define your marketing strategy. There's a big difference.
Step 2: Define the role. Clearly outline the role, responsibilities, and expectations. Go into extreme detail, because you can always cut down later. Make sure to talk to the right individuals in your company to truly figure out what this person needs to do. Or honestly, just email us and we'll send you a template lol. Once you define the role, formalize the contract and post it on job forums.
Step 3: Evaluate candidates. Be diligent. Look for someone who is a strategist and leader, with a track record of success in your industry. Can't stress this enough. Their experience must be relevant to YOUR startup and customers. And always, always check references. No exceptions, ever!
Step 4: Have a trial period. When you do hire someone, have a probation period. Yep. No exceptions. And be sure to evaluate their effectiveness in the first 30 days after joining. Critical. And undervalued point.
Hack - Use executive search firms: hint hint. Consider using executive search firms that specialize in placing fractional or outsourced CMOs. They'll usually take care of your whole process. Yes it'll cost ya, but it'll also make so many things faster/smoother. Obviously.
I go into much more detail here on this article. I even explain how to evaluate executive search firms themselves! Can you believe it? :)
Remember, your marketing strategy is never going to be a set-and-forget deal. It'll take weeks of insight from you, your founding team, marketers you can trust, customers you've spoken to, etc. But honestly, whether it's marketing campaigns or search engine optimization or just finding ways to "hack" your existing marketing strategy, what's important is that you do all that with a marketing leader you trust.
And that person doesn't have to be from HireCMO! You should go out there in the wild, and find a person you can trust and work closely with them to really get to the next level of revenue/funding for your startup.
I really wish you all the best in finding that leader for your team. And as corny as this sounds, I wish you the best and sincerely hope you find what you're looking for. Be happy. Look after your health. And build a company that you (and your future family) will be proud of. I'm rooting for you man.