Do You Really Need a CMO? The Surprising Truth for Businesses on the Rise

In the bustling corridors of the business world, the allure of executive titles often seduces companies into believing they need a full suite of full-time C-suite officers from the get-go. Among these coveted roles, the chief marketing officer (CMO) stands out as a beacon of brand growth and market penetration. However, for many early and growth-stage companies navigating the choppy waters of expansion, the conventional wisdom dictating the necessity of a CMO might just be overkill.

Before you make the call to hire a CMO, let’s dive into the nuances of the idea that a full-time CMO is the only option. By taking a closer look at the options for marketing leadership and challenging the status quo to explore smarter, cost-effective alternatives for businesses, you ensure you hire the right person with the right amount of expertise and experience for your company.

The CMO Conundrum: A Closer Look

Before you rush to post that CMO vacancy, pause and reflect. The decision to appoint a CMO should not be taken lightly, given the significant financial and strategic implications. The average annual salary for a CMO sits at $350,000, not to mention the added expenses of benefits, bonuses, and equity packages. For many burgeoning businesses, this investment could represent a disproportionate chunk of their budget, diverting crucial funds from other vital areas.

Key Questions to Gauge Your CMO Needs

In a study conducted by McKinsey & Company, 30 percent of CEOs believe that marketing is the “North Star” in defining a brand and its reputation. To determine if your organization would benefit from a CMO who can point the business to that “North Star,” consider the following questions:

  • What are your current marketing needs and goals?
  • Do you have a comprehensive marketing strategy that requires high-level, executive oversight?
  • Can your marketing objectives be met through other means or roles?
  • What is the size and complexity of your market and product line?
  • Are you prepared for the financial commitment of a full-time CMO?

These are powerful talking points for deciding if and when you are in need of a full-time CMO. To help you understand if your company is ready, let’s dive a little deeper into some options for engaging a CMO.

The Fractional CMO: A Game-Changer for Growth-Stage Companies

For many young companies in the $3–40 million revenue range, the concept of a fractional CMO can be a game-changer. This model allows businesses to leverage the expertise of a seasoned marketing executive without the full-time price tag. A fractional CMO can provide vital strategic direction, mentorship to your marketing team, and oversight of critical projects, all while keeping your overhead cost in check.

The Cost-Benefit Analysis

Hiring a full-time CMO can be a hefty financial commitment, but opting for a fractional CMO can significantly reduce costs while still injecting your marketing efforts with high-level expertise. This approach not only makes financial sense but also offers flexibility, allowing your company to scale marketing efforts up or down based on actual needs and growth phases.

Alternative Paths: Marketing Directors and VPs

As of 2024, the average Marketing Director salary in the US is around $186,000, while a CMO salary ranges around $357,000. For many companies on the rise, the smart money is on hiring a marketing director or vice president (VP) of marketing rather than a full-fledged CMO. These roles can offer more bang for your buck, providing hands-on leadership and strategic insight without the C-suite price tag.

Why Marketing Directors and VPs Can Be Your Best Bet

Not sure about leveraging a marketing director or VP? Here are some benefits to consider:

  • Cost Efficiency: They command lower salaries than CMOs but can deliver substantial strategic value.
  • Flexibility and Focus: These roles can adapt quickly to changing market conditions and company needs, focusing intensely on execution and results.
  • Building from Within: Promoting to these positions internally can boost morale and retain talent by offering clear career progression paths.

Still mulling over whether a CMO is a good fit for your organization? Let’s discuss organizational structures a bit to understand how they might look under different scenarios.

Organizational Structures

Let’s visualize how your company’s marketing team could look with and without a CMO:

  • With a CMO: The marketing team is led by the CMO, with VPs or directors of specific areas (such as digital marketing, product marketing, and communications) reporting directly to them. This structure is typically suited for larger, more complex organizations with diverse product lines and global markets.
  • Without a CMO: The marketing team is led by a VP or director of marketing who oversees various managers responsible for specific marketing functions (SEO, content marketing, social media, etc.). This leaner structure can be highly effective for growth-stage companies, focusing efforts on strategic growth areas without the overhead of a CMO.

The Verdict: When to Consider a Full-Time CMO

Hiring a full-time CMO should not be a knee-jerk reaction but rather a strategic decision made at the right time under the right circumstances. Here are the conditions that make sense for a full-time CMO hire:

  • Your company operates in a highly competitive, global market requiring sophisticated, multichannel marketing strategies.
  • Your business has reached a revenue threshold where the return on investment (ROI) from a CMO’s leadership justifies the cost.
  • You have a complex product line or service offering that necessitates high-level brand positioning and customer segmentation strategies.

As you look toward your future, consider your marketing goals. This will largely determine the type of CMO you will need to achieve those aspirations.

Conclusion: A Bold Move Forward

Rather than buying into the idea that every company should have a full-time CMO in order to achieve its marketing objectives, take a step back to review your current business plan and your goals for the future. In many cases, the roles of marketing director or VP of marketing, supplemented by a fractional CMO approach, can provide the strategic oversight and execution prowess needed to propel businesses forward.

By challenging the conventional wisdom and embracing a more nuanced approach to marketing leadership, companies can navigate their growth phases more effectively and sustainably. Rather than being seduced by titles, let’s choose to be driven by strategic, cost-effective decisions that bolster our businesses for the long haul.

Speak with One of Our Incredible Fractional CMOs

Is your business ready for growth and looking for a fractional CMO? By opting for an Amplēo fractional executive, you eliminate ambiguity, enhance accountability and transparency, and implement a strong business strategy to propel your ambitious marketing objectives. Instead of investing significant time and resources in searching for a full-time employee—which can be time-consuming and costly with potential missteps—consider engaging a leader with decades of experience on a part-time basis. Contact us to speak to an Amplēo Partner today!

Categories: CMO, Hiring