Chief Marketing Officers (CMOs) can provide immense value to a company. They create brand strategy, drive awareness and leads, and own the revenue engine that powers growth. However, bringing on a full-time CMO also comes with a hefty price tag. The median pay for a CMO in the United States is $300,000 per year. When you factor in cash compensation, equity, benefits, hiring costs, and more, that CMO could easily cost $500,000 or more annually.
For many growth-stage companies, hiring a full-time CMO is out of budget. So they end up squeezing marketing responsibilities on top of other executive roles or resort to piecemeal agencies and consultants. This leads to disjointed, reactive marketing that fails to move the needle.
Fractional CMOs provide an alternative model – bringing CMO-level strategic leadership at a fraction of the cost.
A fractional CMO (fCMO) is an experienced marketing executive who provides ongoing strategic guidance and leadership as a part-time CMO. They work closely with the leadership team to architect strategy and execute high-impact programs, while also building and managing an agile marketing capability.
Fractional CMOs typically work remotely on a part-time basis, ranging from one to four days per week depending on the company’s needs. They leverage specialized agencies and freelancers to handle tactical implementation (or the company’s internal marketing team). This variable capacity model allows fractional CMOs to right-size each company and flex up or down as needs change.
Fractional CMO fees are generally structured on a monthly retainer basis, averaging $7,500 to $20,000 per month. For a fractional CMO working 2-3 days per week, that results in an average hourly rate of $175 to $350. Annualized, costs generally range from $100,000 to $300,000+ depending on the engagement structure.
Notably, fractional CMO costs scale linearly with the hours and resources needed each month. A fractional CMO providing 8-12 days per month may cost $300,000+ annually but delivers substantially more hours and output than a traditional full-time CMO.
While the hourly and annual costs of a fractional CMO may rival or even exceed that of a full-time CMO, the fractional model leads to significantly lower total cost of management when accounting for the following:
Equity and benefits alone can easily double the all-in costs of a full-time CMO. And that’s before considering any unused downtime or costs of building an in-house team around that CMO. The math makes hiring a fractional CMO extremely compelling from a total ROI perspective.
For example, a $250K/year fractional CMO at 2 days per week provides the same output as a traditional CMO working 1 day per week. Yet the fractional CMO costs just 25% as much as the $500K+ all-in costs of hiring that CMO full-time when factoring equity, benefits, and team. Those savings drop directly to the bottom line.
In addition to the structural cost savings outlined above, fractional CMOs also deliver superior ROI by providing better leadership and execution. Key advantages include:
Strategic Clarity: Fractional CMOs remain focused on high-level strategy and programs rather than getting dragged into tactics.
Objectivity: With an outside view across many companies, fractional CMOs make decisions based on data and best practices.
Flexibility: The flexible capacity model allows scaling up for new campaigns and initiatives without delays or added headcount costs.
Extended Skill Sets: The bench model and network access provide all the skills of a full department without tradeoffs.
Specialization: Years of experience in specific verticals, models, and growth levers unmatched by most full-time CMOs.
The combination of lower costs and higher strategic value-add drives substantially higher ROI from the fractional CMO model compared to traditional executive hiring approaches.
The Verdict? In an era of increasing uncertainty and pace of change, the fractional model brings better leadership and performance at lower costs. For today’s growth-stage companies, going with a fractional CMO is a competitive advantage that can create efficiency in marketing and free up resources to fund growth in other parts of the business.
If your company needs a Fractional CMO for B2B SaaS, consider working with Peter Geisheker, CEO of The Geisheker Group. Peter has been providing Fractional CMO services for over 20 years and has expertise in growth tactics and conversion optimization.