What is the Average Fractional CMO Hourly Rate

Fractional CMO Hourly Rate and Fees Structure

Hourly Rates for Fractional CMO Services

The average hourly rate for a Fractional CMO varies significantly because of how many service providers claim to offer Fractional CMO services, although they do not have actual experience as a Chief Marketing Officer or Marketing VP. Fractional CMO has become an extremely popular buzzword in the business world.  It generates approximately 1,300 keyword searches on Google every month. 

The popularity of “Fractional CMO” has resulted in a number of organizations claiming to offer Fractional CMO services.  Advertising agencies, marketing consultants, digital marketing firms, even staffing firms now claim to provide Fractional CMOs. Unfortunately, there is not a standard or certification required for earning the title of Chief Marketing Officer (CMO). 

Not all Fractional CMOs are equal

There are three factors that we suggest considering when looking for a Fractional CMO

1. Experience – A high-caliber CMO will have held the position of Chief Marketing Officer (CMO) in a large company or Fortune 500 corporation. If your business is under $100 million in revenue, you may want to consider someone with experience as a Vice President of Marketing.

2. Education – We recommend a Master’s Degree, preferably MBA, or Masters of Marketing.

3. Results –  The right Fractional CMO for your needs should have measurable results to exemplify their skills and abilities.

The issue is that many of these “Fractional CMO” service providers do not have actual experience in developing and executing marketing plans, growth strategies, executive management, or department development. Furthermore, most lack the big-picture perspective and knowledge of Geo-Economical factors that are critical in today’s digitally connected and highly volatile global marketplace.

These factors should be considered when asking, What is the average Fractional CMO Hourly Rate?

Results are more valuable than hourly rates

The demand for Fractional CMOs has grown significantly over the past five years or so, following suit with the demand for other outsourced executives, such as CFO’s and CIO’s. This Outsourced CxO aka Executive-as-a-Service model has offered a financial advantage for many organizations.  It provides the most valuable benefits of a CxO without the burden of traditional employment costs, including benefits, paid time-off, bonuses, dedicated work space, etc. However, many organizations fail to realize that the hourly rate for a fractional CMO is less important than the revenue growth a Fractional CMO should generate.

A Fractional CMO is not someone you want doing your day-to-day marketing activities. They are not who should be creating content such as blogs, social meda posts, and videos. They should not be the ones creating advertisements or designing graphics. These functions are not worth the rate a true CMO charges, and if the CMO is focused on these activities, then they are not providing your business with the strategic and leadership skills a true CMO offers. The skills that strengthen your brand, create demand for your products and services, improves profit margins, and generates substantial growth. These are results that generate a return on marketing investment.

Return on Marketing Investment (RoMI)

Retaining a Fraction CMO is an investment, at least for a highly qualified CMO. Just as any other investment, it should be measured by Return on Investment (ROI). We provide our clients with a Return on Marketing Investment (RoMI) a KPI that analyzes marketing expenses and measures them against revenue growth during the same period. This single metric provides a summary of the financial return generated by the Fractional CMO.

 

 

How Much Does a Fractional CMO Cost?

Instead of asking the Fractional CMO’s hourly rate, the better question is “How much does a Fractional CMO cost?”

While an hourly rate is common for outsourced work, it is best suited for simple services or unique projects. As the complexity and depth of the service offering increase, so does the variance between estimated billable hours and actual total fees. Experienced and knowledgeable Fractional CMOs will be able to provide a thorough proposal that provides a flat fee structure and clearly defines the scope of work.

Hourly fees are often an indicator of an amateur. Quoting projects by an hourly fee is often an indication that the service provider lacks the experience to accurately gauge the entire scope of work. They do not actually know what exactly is needed to achieve the client’s goals, therefore they cannot calculate the cost for delivering Fractional CMO services.

We have all been suprised by a repair person’s invoice after a service call. Although an hourly fee is quoted, there are additional charges, such as drive time, supplies, materials, and more. Resulting in a total cost that can be significantly greater than the hourly fee quoted. Hence the difference between price and cost.When applied in consideration of retaining a Fractional CMO, there are significant factors that impact the overall cost. These factors are both direct and indirect, including opportunity cost.

Ever had a plumber come to your home to address a problem, only to find out the next morning, it was poorly handled and the result is a much greater problem than the original?

When an organization is seeking a Fractional CMO, it is more than likely planning on making significant changes in its growth and marketing strategies. The wrong choice could result in less than optimal performance. For example, the Fractional CMO hypothetically generated 9% growth. However, the industry is growing at an average of 15%. Therefore, the Fractional CMO cost would be higher, as the results lagged behind industry standard.

 

Fractional CMO Fee Structure

Every organization is unique. Each has their own goals, challenges, and resources. These factors directly impact the engagement of a Fractional CMO and the fee structure. The most common are a fee per project, or a recurring monthly fee. Rarely does a highly-experienced, executive-caliber Fractional CMO quote an hourly rate.

In most cases, experienced CMO’s will be able to gauge what is needed to complete a project and achieve the desired goal(s). An experienced Fractional CMO should be able to provide a quote for the project, rather than charge hourly. This is advantageous to the client because it sets clear expectations and enables accurate budgeting. Paying an hourly rate for a service often leads to surprises.

There is not a set standard for a Fractional CMOs hourly rate. The rates vary by firm. This creates a challenge in determining the quality of service that the firm will provide.

Below is a table that is intended ONLY to provide a general gauge for a Fractional CMOs Average Hourly Rate. The range for an actual Fractional CMOs hourly rate is between two hundred dollars an hour on the low end and up to six hundred dollars for a seasoned expert with years of experience in large or public corporations.

 

• Fractional CMO with experience leading a very large or public corporation approximately $400 to $600 per hour

• Fractional CMO with experience leading a SMB ($20 to $200 million) approximately $200 to $350 an hour

• Other service providers claiming to be Fractional CMOs, approximately $75 to $150 per hour 

If you have any questions or would like further clarification on What a Fractional CMO costs or what exactly a Fractional CMO does?

Please contact us  or submit the form below. 

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