Chief Marketing Officer For Small Business – Fractional CMO Saves Thousands On Marketing
TL;DR – Why a fractional CMO (Chief Marketing Officer)?
- Save thousands over hiring in house
- Increase marketing efficiency and scale the business intelligently
- De-risk labor burden and level up your marketing efforts at scale
- Advance the business with technology
- Remote work environment is here to stay
- No paid vacations — do more with less financial capital
- Build stronger IP (intellectual property)
Your business is growing, and now, you are ready to build your in-house team. You go to the market place job placement sites to list your openings outlining your requirements. You’re excited as you search for the perfect person to scale the business. I would ask only one question. Why is hiring in-house better then bolting on an experienced team of marketing professionals? Let’s review and break this down and the weigh the pros and cons.
Cost to hire in-house: analysis
Research on Indeed indicates that the CMO salary range is from $95,000 up to $190,000. For a marketing manager with 10+ years of experience, you can expect to pay more than $250,000 a year. Small business owners that have the resources to hire this type of talent need to have a strong balance sheet and good growth to support that type of personnel.
As a trade-off, some business owners resort to hiring creative directors, paid search specialists, marketing managers and so forth in hopes that a different title will save on labor costs. The problem with that strategy is, at the end of the day, you are not actually saving because of mismanaged spending. Plus, the opportunity cost of missing out on growth is expensive. Not to mention, hiring a marketing professional who isn’t experienced with the vast number of ways to market a business may not position the business properly in order to maximize marketing capital and produce a positive ROI.
Let’s break down the costs of hiring an in-house marketing manager:
- Salary requirement: With that being said let’s take the average salary of about $100,000 a year for the type of talent you desire to support your internal marketing needs. Of course, additional marketing spend would be on top of managing the following.
- Media buy budget: If your business is generating, let’s say $2.5M in revenue, you would typically expect to invest 7% – 9% back in media-buy in order to grow. That would be about $225,000 in your media-buy annual budget. The cost of hiring an in-house person combined with the media-buy budget would be about $27,000 a month, with a 9% reinvestment.
- Cost of technology: Email programs, CRMs, websites, review platforms, design software and analytics platforms can add up. To get all of this à la carte, you would spend somewhere in the neighborhood of $2,400 a month.
Job requirements / responsibilities
- Paid search management
- Media-buy expertise
- CRM / technology automation
- Social media marketing strategies / deployment / concepts
- Out of home media-buy
- OTT media-buy design and placement
- Remarketing
- Video advertising to include YouTube, Google Display and other video sources
- Develop intellectual property, copyright and trademarks
- Content marketing manager to include the development of an SEO strategy aimed at ranking, page growth and conversion analysis
- Analytics insights to analyze media-buy and ROI
- Sales funnel development and tracking of the most profitable campaigns
- Loyalty programs, which includes managing feedback and reviews
- 4 – year degree
- Certifications with Google AdWords, Facebook and Google Analytics
As you can see, when you break down the costs, hiring an in-house CMO gets expensive, hitting approximately $30,000 a month to include media-buy, salary and technology. Even if you hire someone not as qualified as in my previous scenario to make the more manageable, the biggest cost savings would be on labor. Cutting the labor costs to $50,000 a year sounds great, but when you take into account the risk of marketing and media-buy mismanagement, it’s not worth it. Instead of looking to hire cheaper, you would hire smarter.
Now ask yourself as a business owner, what are you gaining by having this person in-house? In my 11 years as the CMO of Marketing 360®, I can tell you about the feedback I get. Business owners want control of the marketing person. They want to dictate, in some cases, the overall strategy and have someone to bounce ideas off of. They want the additional support and idea creation to carry the vision of client acquisition forward. They want someone to lean on to grow the business. They desire someone analytical who can strategize. They want someone who can generate positive ROI for the business.
I get it. I have heard it all and believe in hiring when it is right and supports the business long term. For example, are you bringing in a partner? Are you leveraging equity to get better alignment with key talent? If you are not taking that approach, it’s always a good idea to analyze the cost to hire a marketing team.
Cost to hire an outside marketing team: analysis
Now, let’s take a look at the other side of the coin and analyze why businesses of all sizes hire marketing teams instead of hiring an in-house CMO.
With the pandemic, a lot has changed. The remote world is here, and business owners are doing things differently. Having remote teams that are digital and powered by Zoom is no longer a stumbling block to overcome. It is now championed. This advancement has opened the door for businesses to not only take a hard look at the costs of commercial real estate (leases) but also the talent they hire. There are significant savings being had across the board.
Let’s analyze what you get and the cost savings of working with the Marketing 360® team and platform:
Get multiple marketing experts instead of one with your on-demand marketing team:
-
- Marketing Success Managers oversee the vision, marketing strategy and media-buy
- Designers create brand-first messaging to help take you to the top of your local market
- Content Marketing Specialists create and distribute your content
- Social Media Managers create, design and schedule your social media posts
- Analytics Experts create a positive ROI and data-driven results
Plus, you’ll gain access to our Certified Search Ad Specialists, Certified Facebook Ad Specialists and Certified Platform Analytics Specialists, as well as our proven marketing processes, strategies and playbooks.
Get all of the technology you need from a singular marketing platform:
Now think about this, you can get multiple people with a value of, let’s say $60,000 per person, for the price of one. The math is simple in regards to labor costs — the savings are significant. Let’s do the math a little deeper on what the costs for media-buy, technology and labor break out to be.
These are just examples. To get a real cost savings analysis, reach out to one of our Marketing Consultants.
In-house analysis – 1 person
- Media-buy: $225,000 at 9% growth = $18,750 per month
- Labor: $100,000, $8,333 per month
- Technology: $2,400 per month
- Total: $29,483 per month
Marketing 360® marketing team analysis with technology
- Media-buy: $225,000 annual investment at 9% growth = $18,750 per month
- Media-buy costs: $4,687.50 per month
- Technology & Talent: $1295 per month
- Total: $24,732.50 per month
You can see with the comparison that significant savings can be had. Let’s break out the monthly costs a little bit more, giving the marketing budget component a little more detail
Analysis with the media-buy removed from the budget
The cost to support the media-buy is still included in the comparison. As in both comparisons, the cost to manage the media buy is included in the labor and media-buy fees.
- Labor + technology = $10,733 month
- 1 Person
- Marketing team + technology = $5,982.50 month
- 5-6 People
- Just technology = $395 month
With a $225,000 annual marketing budget, you would be saving more than $65K a year, not to include other employee costs, like paid vacation, taxes and more. The real costs to hire is typically 1.5 – 3 times the salary. Additional savings could be realized if more of the media-buy was allocated to content and social media management.
Also, something to consider is the cost savings from the integrated technology and the scalability of people. By being able to bolt on five additional people using the team concept, you save an additional $250,000 in salary, with the average salary being $60,000 a year. As there is no labor burden, the cost is rolled into the technology and apps purchased. This creates significant savings for the business owner.
No matter how you run the numbers, you can, hands-down, save thousands of dollars by using the Marketing 360 platform and working with our team of certified experts with years of marketing experience. The cost analysis, market insights, on-demand team and technology focus make us the right choice for all businesses, big and small.
At the end of the day, it is about building your business and growing smart. We did it the same way, bootstrapped and laser-focused on generating a positive ROI. We have taken the same model and duplicated our processes, marketing strategies and team concept to help support and grow SMB all over the globe.
See how much money you could actually save by talking with a Marketing Consultant
