how much for a fractional cmo?

How Much Does a Fractional CMO Cost?

I've heard I can save money by hiring a fractional CMO. How much are we talking?

4.5 min. read
cmo zen fractional cmo rates

How much can you expect to pay for a fractional CMO?

Fractional CMOs typically charge between $5,000 and $10,000 per month for engagements of twenty to thirty hours. It’s an effective hourly rate of between $250 and $400. 

These engagements vary and can be complex. Here are some tips when evaluating this type of hire.

Fractional vs. full-time?

Should I hire a fractional CMO or a full-time resource?

To keep the comparison apples-to-apples, it helps to keep a few things in mind.

  1. Total cost of full-time hires includes benefits and employer-paid payroll taxes.
  2. Full-time hourly utilization is typically about 60%. Consultants bill at 100% utilization, so one hour of consulting is equivalent to about 1.4 hours of work from a full-time employee.
  3. Compensation for senior employees often includes equity compensation, severance, and other ancillary costs which are not typically part of a fractional CMO engagement.

According to Payscale, the average CMO with 10+ years of experience earns $181,000 to $207,000 in base salary plus up to $100,000 in bonus, $69,000 in profit share, and up to an additional $78,000 in commission. Salary.com reports the average salary in the U.S. for a full-time CMO is $313,300 to $426,000. 

big bucks to hire cmoThis is not an inexpensive hire.

And it’s not uncommon for executive hires to take 4-8 months or more. 

Garrett Jestice with Prelude Marketing breaks it down like this. If you allocate 10% of your revenue to marketing (the average across several benchmark surveys), then plan on 50% of that budget for head count (the balance on technology and initiatives), and you can find an affordable CMO for $250,000 per year, then when you reach $5M in revenue you can afford to hire a full-time CMO as your only marketing team member. 

Realistically, allocating budget for a small team and spending on growth it doesn’t make sense to hire a full-time CMO before $10 million in revenue. The spend is just too hard to justify. 

In contrast, a fractional CMO at $7,500 per month is a $90,000 expense annualized, with no ancillary expenses. This person works part-time, but also brings the experience and expertise of a CMO. 

Fractional CMOs tend to work with smaller companies where the price difference is important. That means an experienced fractional CMO will be used to the high demands and limited resources of a smaller company. 

Financially speaking, hiring a full-time CMO as your only marketer, or as the lead for a small team, is like buying the family-size bag of Doritos from Costco… but once you open the bag, you must eat the entire bag.

It’s just not proportionate or appropriate to the needs of most early stage companies.

What about a junior hire?

hire junior marketerCouldn’t you just make a less expensive full-time hire?

Let’s take a look.

Maybe you don’t need CMO-level seniority or experience?

Only you can decide. However, for most Founders and CEOs, a junior hire means that they become or remain the acting CMO. They must set the strategy and manage the junior team member(s) to success.

For example, a junior marketer will happily hit send on your email campaign. They will even run well-defined playbooks. But if you need them to create the campaign and do it consistent with the company’s overall strategy… they are going to struggle.

They aren’t experienced enough yet to take the reins.

It doesn't have to be senior OR junior...

Often that means that the best move (still less expensive than hiring a full-time CMO) is to hire a fractional CMO along with a junior marketer. 

This can be the best of both worlds. You get the affordable senior input you need to set strategy, set up campaigns, analyze results, and own the accountability, plus a junior resource who is all-in on your company, is an insider to the company culture, and who is able to put hours into executing your marketing initiatives at the junior rate.

In summary, the going rate for hiring a fractional CMO is $5,000 to $10,000 per month for 20-30 hours (about 1 day per week). Some charge as low as $2-3,000, and still others will tackle project-based work, but you have to ask yourself why they aren’t charging the going rate? 

Sometimes they may have fewer hours available such as in an advisory or coaching engagement. Others might be less experienced in their fractional CMO career and charging less to build up a client base and reputation.

 For more about how to get the perfect fractional CMO fit for your company, check out How to Hire a Fractional CMO, the Complete Guide.

Namaste.

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