Fractional CMO, Marketing Advisor, and CMO as a Service - Which Does Your Startup Need?

These three roles lack a clear and agreed-upon definition. Therefore, we have an excellent opportunity to shape the marketing advisory category, but we must work together on that.

This is what I call a "community article" - I will collect everyone's insights and incorporate them into the article including credits so that we can better define these roles.

The goal is to shed light on each of these roles with the help of people who are advisors, receive services from advisors, or would like to receive services and have a certain perception about one or more of these roles.

In this way, the relevant service providers will also be able to define themselves better, but more importantly, companies and startups that need such services will be able to define in advance what exactly they need based on the definitions built here together and save a lot of time searching for such and such advisors.

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Let's start ??

These three positions are considered strategic advisors.

Some are more hands-on than others, they have different pricing models, they have different work models, and they have different added values.

In all cases, these are professionals with knowledge, experience, and a network that reflects an executive professional.

I think this is an important angle - these people must have (!) very senior management experience. In addition to having proven experience in managing large marketing budgets and growing profitable organizations, these individuals should also have managerial experience in establishing, growing, and leading marketing organizations.

More than anything, they need to know the three pillars of marketing in depth: brand marketing, product marketing, and demand/growth marketing.

Listed below are basic descriptions of each of these three roles, but feel free to challenge, tweak, and develop subcategories to help format the definitions.

All of us understand that these roles are not completely separated; there are individuals who play both roles, and there are various models for each of them, but my aim is to simplify and even somewhat normalize their three definitions.

Marketing Advisor

Description?

An external consultant who helps an organization accelerate success by injecting knowledge and experience.?

In this way, the organization maintains its commercial IP (keeping knowledge in-house and developing experience), which gives it an advantage in establishing a growth strategy, growing effectively, and ensuring the business is more sustainable.

Generally, advisors don't do hands-on work and meet with their contact person for a few hours each week, but they are available 24/7 for anything, and sometimes a 15-minute phone call can help unclog a strategic issue at the business/marketing/product level that's been stuck for months.

As advisors do more hands-on work and spend more time in the company, their goal may be compromised, which is to build work methodologies and implement cross-departmental decision-making processes to inject their knowledge and experience into the organization.

It is the responsibility of a marketing advisor to help establish/manage/expand the organizational structure, establish/manage/expand the marketing P&L, develop OKRs, R&Rs, and marketing P&L, as well as define rituals and communication between teams and departments.

An additional point to note is that such an advisor can sit on the board. Personally, I don't think this is a must. In my opinion, the main responsibility of the marketing advisor is to strengthen the person responsible for marketing within the organization so that he or she can become an ultimate leader with a strong presence.

What types of companies should hire a Marketing Advisor?

Basically, all types.

• Early-stage startups where their founders understand/need/can integrate marketing insights into their products or who have already gained some traction and need to develop and execute a GTM strategy, but understand they need to be able to do the work and get their hands dirty in order to succeed, should hire a marketing advisor. In this case, a marketing advisor can help them frame, define and distill their marketing plan and guide them through all the steps in the process of planning, researching, launching, receiving feedback, and optimizing.
• Startups in Growth stage, where the marketing team must effectively scale their marketing business contribution while building up the marketing leader and empowering him/her, can hire a marketing advisor to accelerate their efforts. These startups need to improve their marketing effectiveness and implement profitable growth strategies, hence a marketing advisor might be useful.
• Mature startups and companies that are looking to expand their business without having the relevant knowledge and experience. Think of a B2B company that wants to expand into the B2C market or vice versa.

Model

Marketing advisors can be paid hourly, retainer-based, equity-based, or hybrid (monthly payment + equity).

It is my understanding that the range of prices in Israel can vary from $100 - $600 per hour, and equity can range from 0.20-1.5% per year for four years with equal vesting periods.

This depends greatly on the advisor, the maturity of the company, the engagement model, and the geographic location of the advisor/company.

Fractional CMO

Description

A part-time marketing leader per se. In general, they work with either a paycheck or an invoice and provide a marketing-leadership solution to a company.

As part of the company's leadership team, this individual is expected to attend internal meetings not necessarily related to their field, as well as board meetings (sometimes), and represent the marketing efforts at every administrative and relevant meeting.

An integral part of the position is establishing or managing an internal marketing team from the beginning and laying the groundwork for a future marketing system.

Their role is to translate the company and the board's goals into building a marketing strategy, GTM, campaigns, building budget, and a marketing organization structure in order to help the organization achieve its business goals through leading and executing all marketing plans wherever they are.

What types of companies should higher a Fractional CMO?

Young ventures with a low budget, and a short runway, lack the knowledge or experience to develop, implement, or improve a marketing strategy it.

Also, these are startups that understand the added value of integrating marketing knowledge into the construction of the product itself (particularly in the B2C and PLG worlds), in a marketing presence around the management table and the board, and in general in the company as a whole.

Model

Fractional CMOs often receive benefits similar to regular employees of the company, if the payment is a paycheck, and if there is an equity model within that, it is very similar to what marketing advisors receive.

So payment can be in the price range of $50 - $500 per hour and for equity - 0.20%-1.5% per year up to four years with equal vesting time.

When the payment is a paycheck, it is calculated by subtracting the CMO's 100% salary from the hours he or she worked at the part-time job + 15%-30%, in most cases.

It is possible to increase the part-time CMO's hours if the relationship between the company and the part-time CMO is good. If it turns out exceptionally well, it's a great way to meet and work with a candidate who could potentially join the company full-time.

CMO as a Service

Description

This is usually a completely hands-on service provider who usually manages external team/s.

CMOaaS, like the others, is very strategic, though they can do everything hands-on as well - from building GTM and the many strategic elements to setting up Google Ads accounts, writing articles for the blog, and managing the launch of the product with hands-on.

In many cases, the same advisor comes with a deep knowledge of growth/demand marketing and on this basis, communication with them is built.

I have found that in most cases this role is more suitable for B2B companies that prefer this solution to build and implement a demand strategy for the company and to create a pipeline for sales.

The rounded solution that the CMO as a Service provides puts him at an advantage over others because they can plan-research-implement-apply themselves or with the help of their external team.

However, it should be remembered that their knowledge and experience remain with them because they close their own loop completely.

Even if the knowledge transfer and overlap with in-house replacement are good, some knowledge and/or experience will be lost.

What types of companies should hire CMO as a Service?

It is an excellent solution for young startups that need to generate quick GTM and traction and lay broad and usually good foundations for internal marketing.

Model

I haven't heard of such service providers that work on equity, but I'm sure they exist. I would love to hear from others.

Regarding pricing - Their monthly packages can reach several thousand dollars, not including media budgets.

So, that's it at this point.

It is likely that I was wrong about some of the job descriptions and right about others.

After all, I am a marketing advisor myself (disclaimer) and I have consulted with quite a few service providers and colleagues from all over the spectrum regarding the information here, but I would appreciate clarifications and refinements.

An invaluable tip for companies that choose one of the three types:

Everything must be based on deliverables and timelines.

Regardless of the model, the type of advisor, and your communications model with them, both sides must know what they give and receive each month, what the "flag on the hill" is, and what the way (roadmap) is to achieve it.