A fractional CMO (fCMO) is a senior marketing leader that businesses hire on a part-time basis or via a contract. Many companies exploring this model start by asking how much does a fractional CMO cost, since unlike a full-time CMO, a fractional CMO is hired for specific activities or goals and is paid only for the work they deliver.
This is why many B2B and SaaS businesses are opting to hire a fractional CMO, as it will significantly reduce costs. However, this is not the only benefit of working with a fractional CMO.
Such marketing experts possess extensive experience and leadership skills, making them a perfect choice if you need someone to guide your business toward success with their marketing strategy.
A fractional CMO is not your typical employment expense; it is a strategic investment in the bright future of your company. Having someone who can build and execute industry-leading strategies will pay off in every significant way.
Typical Cost Ranges
As a fractional CMO is not a full-time employee, their cost might seem confusing for business owners at first. A great benefit of hiring this type of professional is that you don’t have to pay additional employee benefits that easily sum up to several thousand dollars per year.
That said, an hourly rate of a fractional CMO ranges from $200 to $350, depending on their experience and the services they provide. The final cost will also depend on how you structure the engagement.
Being billed by the hour allows businesses to plan their budgets in advance and invest more or less as needed. For instance, during high season, you could invest more in your marketing activities and plan for those costs in advance.
Another major benefit of working with a fractional CMO is the flexibility. Your collaboration can start with just a few hours per month, and over time, you can move to a retainer model if it better suits your needs. If you’re seeking ongoing leadership, expect to pay between $3,500 and $50,0000 USD or more per retainer.
This wide range exists because of the different range of services, hours put in, and experience and knowledge a fractional CMO possesses. If you want to spend less, consider hiring for only high-level activities and outsourcing the rest.
For example, a B2B SaaS startup in its early stages might not need as much marketing as an established business entering a new market. Hiring a fractional CMO for the first quarter can cost you around $3,500-$15,000 USD per month. Once you’re ready to invest more in marketing, you can easily discuss it with your hired fractional CMO.
What Drives the Cost
As mentioned above, many factors will impact the cost of hiring a fractional CMO. The most relevant definitely are the experience of the fCMO, their scope of work, and the engagement model you opt for.
You will pay less for an fCMO with only three years of experience than what you’d pay for someone who has over ten years of relevant marketing experience. A significant cost factor is the activities you expect them to be responsible for. Expect to pay the most for industry and competitor research and developing marketing strategies. Creating content, whether for social media, website or your email, will cost significantly less.
When checking different costs for fractional CMOs, you will also have to keep in mind your business size, stage and industry complexity. Some industries are more competitive or more regulated than others, which requires extra effort from the marketing side. They will have to familiarize themselves with different regulations, dynamic trends, and dozens of your direct competitors, all of which take time.
All in all, the cost businesses pay for hiring a fractional CMO is highly flexible and depends on the variables mentioned above.
Cost Model Comparison: Fractional vs Full-time CMO
Depending on what your business needs, a fractional CMO can cost you around several thousand dollars per month. However, as a business hiring this type of marketing professional, you will not have to pay any other fees or benefits.
To hire a full-time CMO, you can expect to pay around $347,000 for an annual salary without benefits. If your business is in a competitive field, this cost will be even higher. Some of the leading high-tech companies are even paying their full-time CMOs salaries up to one million dollars.
The fractional model will not only save you a significant amount of money, but it will also provide you with senior leadership that many of these full-time CMOs don’t have. A fractional CMO has gained experience over the years working with different companies and industries and faced a whole bunch of challenges that have made them an expert.
How to Budget for a Fractional CMO
Before you start talking to fCMOs, take a moment to clarify what you need from them. Assess your marketing spend so it doesn’t become a giant expense for your business.
Think about how many hours you need and what your priorities are. If you have a clear goal you’d like to achieve but don’t know which marketing activities are suitable for it, a fractional CMO can provide guidance.
In the beginning, it would be a good idea for your fCMO budget to be around 30% of your marketing spend. Of course, this percentage can fluctuate over time, but it is a good, safe starting point for businesses hiring this type of marketing professional for the first time.
Getting ROI and Key Pitfalls
As a business owner, you are probably most interested in ROI. Ask your fractional CMO to provide you with a clear scope, defined KPIs, and ongoing reporting. This will ensure you’re always on top of everything they are doing and can intervene on time if necessary.
Make sure you integrate them into your leadership team, as they can get valuable insights and ideas from talking to them. If you have a small marketing team, they should communicate regularly with the fCMO and work based on their instructions.
As much as you might only pay for hours at the beginning of your collaboration, seek embedded leadership from them. They should have a clear strategy that is divided into their activities by the hour.
When it comes to key pitfalls, there are a few worth mentioning. When hiring, make sure you hire someone based on their worth, and not their price. When working together, demand a clear scope and accountability at all times. Real marketing leaders are always on top of their projects.
Conclusion
Budgeting for a fractional CMO implies considering aligning scope, hours, cost, and value. Your fCMO is the person who can take your business to the next level with their marketing expertise, so make sure you choose wisely.
Evaluate your needs, request proposals from fractional CMOs who interest you and compare models. If you were wondering how much does a fractional CMO cost, Algocentric Digital Consultancy can help you understand which fractional CMO is the right fit for you, based on your business needs and objectives. Our fractional CMOs have years of marketing experience and know which strategies and approaches work best for B2B businesses.
FAQ
How much does a fractional CMO typically cost?
Fractional CMOs usually charge between $200 and $300 per hour, depending on the scope of work, company size, and business goals.
What factors influence the cost of a fractional CMO?
Pricing depends on several factors, including the hours, complexity of the marketing strategy, team size, level of expertise, experience, and industry specialization.
Is hiring a Fractional CMO more cost-effective than a full-time CMO?
A full-time CMO can cost $200,000–$300,000 per year plus benefits, while a fractional CMO provides executive-level expertise at a fraction of that cost. Businesses gain strategic direction and leadership without the overhead of a full-time salary.