The Future of Marketing: The Rise of the Outsourced CMO
Rapid advancements in technology, the rise of big data, and the increasing reliance on digital channels have led to significant changes in the digital marketing landscape. Furthermore, incidents such as the global pandemic also led rise to significant changes in marketing, with one of those changes being the use of an outsourced CMO.
A traditional, full-time Chief Marketing Officer’s (CMO’s) role has revolved around shaping and promoting a company’s brand identity, crafting marketing strategies, and overseeing advertising efforts across various channels. They were often tasked with understanding their target audience’s preferences, developing compelling messaging, and ensuring their products or services resonated with potential customers.
Today’s CMOs face novel challenges of navigating a complex ecosystem of digital channels, data analytics, and marketing automation tools, all while keeping up with ever-changing consumer behaviors and preferences. This new reality has expanded the scope of the CMO’s responsibilities, making their role more challenging and demanding than ever before.
As a result, CMOs must possess diverse skills, including expertise in data analysis, marketing technology, and digital strategy, in addition to traditional marketing knowledge, meaning the average CMO will also expect more compensation in exchange for their expertise.
For small and medium-sized businesses, this can be a problem. Although they require a CMO’s experience and expertise, they may not necessarily be able to afford the average CMO.
According to Comparably, the average salary of a CMO in the US is $247,241. Note that this excludes bonuses and any potential stock compensation. This cost is simply too high for a startup looking to improve its marketing efforts.
Enter the outsourced CMO. This concept has emerged as a viable alternative to the traditional in-house CMO model. But what is an outsourced CMO?
An outsourced CMO is a marketing professional or agency that provides strategic marketing guidance, execution, and oversight on a contract basis rather than being a full-time company employee.
The outsourced CMO option has grown popular as it allows businesses to access a diverse pool of marketing expertise without the expense and commitment of hiring a full-time executive. Moreover, the flexible nature of outsourced CMOs means businesses can adapt their marketing efforts in real-time, scaling up or down as needed to meet evolving market conditions and business objectives.
In the following sections, we will explore the benefits and challenges of this model and how businesses can effectively leverage the outsourced CMO approach to drive growth and success in today’s competitive markets.
The Fractional CMO: Outsourced Services and Reasons for Their Rise
The fractional model of marketing—which includes the use of a fractional CMO/ outsourced CMO—has emerged as a powerful alternative to traditional full-time marketing employees. Through this method, businesses gain access to highly experienced professionals for a fraction of their time and capabilities.
The benefits of hiring an outsourced CMO that have contributed to their rise in popularity include: include:
- Outsourcing frees up cash flow and saves costs compared to hiring an in-house employee: Hiring a full-time CMO can be expensive, considering salary, benefits, and other associated costs. Outsourcing a CMO reduces these costs, freeing up cash flow to invest in other critical business areas.
- A fractional CMO agency provides experience, knowledge, and expertise to improve marketing strategies and goals: Outsourced CMOs bring diverse experience from working with various industries, allowing them to apply their knowledge and expertise to create effective marketing strategies tailored to your business.
- Hiring an outsourced CMO increases company productivity, as employees can focus on their tasks: By delegating marketing responsibilities to an outsourced CMO, your team can focus on their core responsibilities, leading to increased productivity and efficiency.
- A fractional CMO offers a fresh set of eyes, expertise, and leadership for companies lacking marketing expertise: An outsourced CMO can provide an objective perspective and introduce fresh ideas, helping your business identify new opportunities and improve existing marketing efforts.
- Outsourced CMO services offer specialized skills and a better quality of service and scope: Fractional CMOs possess diverse skill sets, allowing them to provide a broader range of marketing services that might be beyond the capabilities of an in-house team.
- Better time management, productivity, and results are expected from hiring a professional CMO: Outsourced CMOs are experienced in managing projects efficiently, ensuring timely execution and delivery of marketing initiatives, leading to better results.
- Fractional scaling revenue is possible through outsourcing as it allows for more flexibility and adaptability: With an outsourced CMO, businesses can quickly scale marketing efforts up or down as needed, allowing for greater adaptability in response to market fluctuations.
- Goal-oriented outsourcing ensures job completion without unnecessary constraints or expenses: Fractional CMOs are focused on achieving specific marketing goals, which helps keep projects on track and within budget.
- Access to smarter CMO tools is possible with outsourced services: Outsourced CMOs typically have access to cutting-edge marketing tools and technologies, allowing them to execute campaigns more effectively and stay ahead of industry trends.
- Access to vetted marketers for the job ensures quality work is done in less time and cost: Outsourced CMO agencies usually have a pool of pre-vetted marketing professionals, ensuring that your business receives high-quality marketing services without spending excessive time and money on recruitment.
- Consistent messaging and positioning are ensured through outsourced marketing efforts: An outsourced CMO can help develop and maintain a consistent brand message and positioning across all marketing channels, resulting in a stronger brand identity.
- Hiring a part-time CMO provides invaluable marketing wisdom to the company: A fractional CMO can share their knowledge and insights with your team, helping them improve their marketing skills and contribute more effectively to the company’s marketing efforts.
- An agile approach to outsourcing allows for more flexibility and the ability to pivot if necessary: With an outsourced CMO, businesses can adopt a more agile marketing approach, allowing them to pivot and adapt quickly in response to changing market conditions or new opportunities.
Current marketing efforts demand data-driven approaches. For businesses inexperienced in this and with a limited budget, outsourced CMOs may be their best option as they are well-equipped to deliver on this front. But what are some of the challenges of working with one? We’ll discuss that in the next section.
Contact us here if you would like to find the best fractional CMO for your business.
Challenges With Fractional Marketing Services and How To Overcome Them
We have looked at fractional marketing services, particularly fractional CMO agencies, outsourced CMO, and fractional CMOs. From these, we have clearly established that fractional marketing services can be a powerful tool for businesses looking to access top-tier marketing expertise without the financial burden of a full-time employee.
However, these services do have their unique challenges, such as:
- Limited commitment: One drawback of engaging a fractional CMO/ outsourced CMO is the limited commitment they may have to your business due to their part-time or project-based engagement. This means that you may only sometimes have immediate access to CMO services when needed, which could lead to delays or reduced responsiveness.
- Lack of team cohesion: Building trust and rapport between a fractional CMO and your in-house team can take time, as they may not be physically present in your office or as deeply involved in the day-to-day operations. This lack of cohesion can hinder collaboration, communication, and overall project success.
Fortunately, there are ways to overcome these challenges, such as:
- Setting clear expectations: Establish a clear understanding of the fractional CMO’s role, responsibilities, and expectations from the outset. This will help to align your goals and ensure everyone is on the same page.
- Having regular communication: Ensure that you maintain open lines of communication with your fractional CMO, including regular meetings, updates, and progress reports. This will help to keep them in the loop and foster a sense of involvement and commitment to your business.
- Involving the team: Encourage collaboration between your in-house team and the fractional CMO by involving them in team meetings, brainstorming sessions, and project discussions. This will help to build trust and rapport, making it easier for everyone to work together effectively.
- Establishing performance metrics: Work with your fractional CMO to develop key performance indicators (KPIs) and track their progress over time. This will help to ensure that they are delivering results and contributing to the success of your marketing efforts.
- Being flexible and adaptable: Recognize that building a strong working relationship with your fractional CMO may take time, and be prepared to adapt and make adjustments as needed. This might involve changing communication styles and schedules or re-evaluating goals and expectations to better align with your business needs.
Preparing for the Future in a World of Outsourced CMO Services
The future of work and marketing is becoming more flexible and agile. Embracing this shift means being open to new ways of working, including collaborating with remote teams, integrating freelancers, and adopting a more project-based approach to marketing.
Smart businesses can tap into the vast pool of talent and expertise offered by outsourced CMO services to better adapt to this new flexible and agile market.
An outsourced CMO could also help businesses leverage technology to streamline communication, collaboration, and project management. Doing so could encourage a collaborative culture within your organization that values the contributions of all team members.
By understanding the reasons behind the rise of outsourced CMO services and considering this option for their marketing strategy, businesses can better prepare for the future and ensure long-term success in an ever-changing digital world.
For more on recent trends in digital marketing, read our blog and talk to us if you are considering hiring a fractional CMO.