Do you need a full-time CMO?

Fabian Maume
4 min readJan 4, 2023

Hiring an external CMO is a controversial topic in the startup world. The common agreement is that you need a fully dedicated team to work hard and move fast. Founders tend to be reluctant to hire a C-suit who isn’t committed full-time.

However, startups usually run on thin resources (especially cash). As a founder, you must choose wisely which C-suit to hire first to get the most out of your budget. Should you hire a head of sales first? Should you hire a head of product? Should you hire a CMO?

Those are challenging questions to answer, especially in early-stage startups. The most scarce asset is usually information:

  • Don’t you know who your ideal customer is?
  • Don’t know which marketing channel is the best for you?
  • You don’t even know if marketing activities can be profitable?

This makes hiring a CMO a risky exercise. How can you mitigate this risk?

There are 2 main options:

  • Keep the CMO cost low
  • Postpone hiring decision

How to keep the CMO cost low?

According to Glassdoor, the average salary of a CMO in the US is 14k USD per month.

And there are other costs on top of the CMO’s salary:

  • Hiring a full-time CMO is a big commitment. You will need to spend a lot of time on the hiring process to ensure you have the right candidate.
  • You need to plan a marketing budget in order for your CMO to be effective. Hiring a CMO without offering him a marketing budget is like buying a racing car to drive in the city.

You can lower the CMO cost by hiring a junior profile. This can be a good option if the person is provided with mentoring.

Another option is to hire a fractional CMO. This option allows getting an experience CMO for only a fraction of the cost. A fractional CMO is also more flexible than internal hire. It allows you to scale up (or down) your marketing activity quickly.

What you save on the CMO’s salary can be reallocated to the marketing budget. For example, instead of hiring a junior CMO for 7k, you can hire an experienced fractional CMO for 1K and have 6k in the marketing budget.

How postponing a decision can save your budget?

I launched a startup of my own and know how tempting it is as a founder to invest the budget as fast as possible. However, you should wait before committing your entire budget somewhere.

You need time to collect information. If you will have better information tomorrow, to make your decision, wait for tomorrow to make your decision. It is wise for you to wait before investing all your budget. It is almost like procrastination is a good thing in the startup world.

Let me give you an example of the power of waiting:

Imagine that you have a $1000 budget to invest in Google ads for the next 4 weeks for US and Canada. At first glance, setting up a weekly budget of $250 would make sense. You will use the whole budget evenly over the next 4 weeks. So let’s do it.

After 1 week of running ads, you have spent $250. You have got some new leads for your business. Congrats!

While digging into conversion data, you see that the US accounts for 70% of your ad spending but generates 0 leads. It would be wise to exclude the US from your targeting to lower your cost per lead. This is nice, but you already spend $250 to gain this information (70% of it in the US).

Imagine that instead of running ads with a $250 budget in the first week, you set up some test ads with a lower budget. You set up 2 campaigns with a $50 budget to test out different geography (US vs. Canada).

You will still see after a week that the US is not a good market for you, but you spend only $100€ to gain this information. The $150 you have can be allocated to Canada for the next 3 weeks. Your marketing budget is better spent as you waited one week to allocate it fully.

Hiring a CMO is much more complex than getting Google ads allocation right. There is much more information that you would need to make things right:

  • Does your SaaS have a good activation and retention rate? If not, you will need a CMO with a good product background to help improve activation and reduce churn
  • What should be your marketing budget? Do you need a big marketing team? Do you need a CMO with good people management skills?
  • Which marketing channel do you need? Do you need a CMO with expertise in a specific channel?
  • Is marketing even relevant for your start-up? If you are selling an enterprise saas product, a sales-led approach might be better than building an inbound funnel (at least early stage).

Getting that information will be challenging. And hiring the wrong CMO will be much more costly than $150.

By hiring a fractional CMO first, you can collect those pieces of information at a reasonable cost. But can a part-time CMO generate good results? That is a fair question that I will cover in my next article.

Originally published at https://www.tetriz.io on January 4, 2023.

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