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There are many considerations when deciding whether to become a fractional CMO. Learn the key questions to ask yourself before making this career shift.
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When considering a career shift as a marketing executive, the possibility of becoming a Fractional CMO has gained popularity. I did this myself after leading my second B2B SaaS startup to an exit.
After a couple of years doing this type of work, I returned to owning my own business and founded Kalungi, which provides instant go-to-market teams for early-stage B2B software companies.
I still get many questions and do coaching sessions with CMOs considering going the Fractional Consulting path. So, I decided to compile some of the biggest questions and considerations to help you evaluate the practical implications and how the change aligns with personal interests, motivations, and life goals.
Discussing these considerations with a career coach, mentor, or peers who have made a similar transition can be beneficial. Their insights can help inform your decision and help you understand what to expect in this new career path. I’m always happy to help with these conversations.
Do I value independence and flexibility? As a contractor or fractional CMO, you'll typically have more control over your and your client's time. However, this independence comes with increased responsibility for managing your own business.
Am I comfortable with income variability? Traditional employment typically supplies a stable salary, while contractors' income can vary based on the number and types of clients they have at any given time. Can you handle periods of low income, especially as you get your contractor business off the ground?
Am I skilled at business development? As a contractor, you'll handle securing your own clients. This requires networking, marketing, and sales skills.
Do I enjoy variety in my work? Contractors often work with various clients across different industries, which can be exciting and intellectually stimulating. However, it can also require quickly getting up to speed in new areas and juggling different business cultures and processes.
Am I comfortable managing my own taxes and benefits? As a self-employed individual, you'll handle your own taxes, retirement savings, and health insurance. You may need to hire a professional to help with this, which is an added cost to consider.
Do I have the necessary resources to start my own business? This includes financial resources, the necessary workspace, equipment, and professional networks to support your work as a contractor.
Am I ready to wear many hats? As an independent contractor, you'll likely have to manage all aspects of your business, from marketing and sales to administration and finance, unless you hire others to help.
Is there a demand for fractional CMO services in my target market? This requires understanding your potential client's needs and the current market for fractional CMO services. If you have a niche area of expertise, is there a market for it?
Do I enjoy creating my own structure? In a full-time job, goals, timelines, and procedures are typically set for you. As a contractor, you must be self-motivated and comfortable setting these for yourself.
Do I have a plan for maintaining my professional development? As a full-time employee, your company may have provided training and development opportunities. As a contractor, this will be your responsibility.
When I joined Chief Outsiders in 2015 for my first encounter with doing Fractional CMO work, I was still in the prime of my career. I wanted to work, and I wanted to work full-time. Because I was working because I chose to do so, I was working harder than I did in the early stages of my career because I did not consider it work anymore.
It had become my hobby…
I also met other CMOs who had gone Fractional because they wanted a couple of ‘Lifestyle gigs’ every year and the freedom to take a multi-month sabbatical every year and hang out with like-minded peers. They used the Fractional CMO work to make their semi-retirement life interesting and engage their intellect.
Finally, some of us just had to work to pay the bills, and of course, their tenacity to do whatever it took to make clients very happy and to fill up their calendars was of another level vs. some of their peers.
Ensure you know how much money you need to make and how much you want to work. Here are a couple of other questions to add to these.
Remember, there's no right or wrong answer to these questions; what matters most is that you make a choice that feels right for you. You may want to consider speaking to a career coach or counselor to help clarify your thoughts and feelings about this potential shift.
The shift from a salaried position to a consulting role can pose several challenges, particularly in business development and marketing. As a contractor or fractional CMO, you're essentially running your own business and need to sell your services to potential clients.
Are you good at networking? Do you want to do your own positioning? Can you build your own pipeline? Even when you’ve led teams doing this for a company or others, doing this for yourself can be a completely different challenge. Unless you have experience and successfully sold your own consulting service, be careful what you wish for. Selling is not easy. Selling yourself is harder.
Alternatively, would you be willing to give up a part of your fee to pay for leads that come from another source? Or for sales being made by someone else? There are many groups of Fractional CMOs, or companies like Kalungi, who focus on Fractional CMOs for B2B SaaS companies, where the marketing and selling will be done for you in exchange for giving up a certain amount of margin or freedom.
Here are some common challenges to consider:
These challenges can be mitigated by proper planning, skill development, mentorship, and potentially partnering with others who can complement your skills. Even if these aspects are new to you, with time and experience, you can learn and adapt to the requirements of your new role.
Do you have a service portfolio you like to sell? Do you have an approach? A framework? Or do you like to use someone else's framework?
For example, are you comfortable studying and getting good at implementing known approaches like EOS or T2D3?
Many B2B SaaS fractional CMOs have adopted T2D3 as the playbook they bring to CEOs to build trust and secure new contracts. If you're interested in learning more, you can start by reading the book or becoming a member of the T2D3 masterclass and becoming certified.
Whatever framework you use, make sure it's relevant to your industry.
A fractional CMO, or any consultant, should ideally have a suite of services that can address a wide range of client needs. Here are some components that could be part of a fractional CMO's portfolio:
Regarding frameworks, methodologies, books, and templates, having a few key resources that you rely on and refine over time can be useful. This might include:
Remember, the key is not to offer everything but to develop a deep understanding of your target client's needs and offer services that best meet those needs. Additionally, consistently updating and refining these offerings based on feedback and results can help you stay competitive and deliver better value to your clients.
You probably have learned a lot in your career, and many of those experiences will be very valuable for the companies and people you sell your services to. Write down any business- or go-to-market models you are very experienced in, or industries, technologies, activities, or types of challenges.
And what are your strengths as an executive? Are you strong on the Art- or Science side of marketing? Great at ‘big M’ marketing like positioning, ICPs, personas and go-to-market strategy, or are you an execution ninja who gets the funnel to the next level, hires, and develops a new team very well is very experienced in urgent crisis management?
Understanding and communicating your unique strengths, or "superpowers," is crucial when positioning yourself as a fractional CMO. Here are several qualities that can make a fractional CMO stand out:
Identify which qualities you possess and can demonstrate through past experiences or results to articulate these superpowers. Then, craft a value proposition that succinctly communicates who you are, what you do, and why you're uniquely positioned to help your clients. I like to use the Best, Better, Only exercise and positioning vector template when I help clients do this—you could also use it to position your personal brand.
Always tie your skills back to the benefits they bring to your clients – the problems you can help solve and the value you can add to their business. Remember, it's not about boasting about your skills but clearly showing how you can help your clients succeed.
How would you position and market your unique set of experiences? Here is a starting point, categorized under industry experience, marketing disciplines, company lifecycle stages, and target markets (B2B vs. B2C):
Your sector or industry-specific expertise can be a crucial asset, especially if you're targeting clients within those industries. Knowledge of industry-specific challenges, trends, customer behavior, and regulatory environment can be very valuable.
Expertise across various types of marketing can show your versatility and comprehensive knowledge of the marketing mix. This can include:
Experience in working with companies at various stages of maturity can highlight your adaptability and understanding of different business needs.
The dynamics and strategies can significantly differ in B2B and B2C marketing. Having experience in both and specialized ability in one can be a strong selling point.
Experience with different geographical markets can be valuable, especially for companies with international aspirations.
Demonstrating your leadership and project management skills through the size and scope of teams and projects you've handled can be a key selling point.
In an increasingly digital world, having experience with various marketing technologies and platforms is a significant advantage.
All these experiences are valuable and can be framed differently depending on the specific needs of the potential clients you are targeting. Remember that what's most important is showing how these experiences enable you to help clients overcome their unique challenges and achieve their goals.
Analyzing your competition is a vital step when venturing into the world of fractional CMOs. Here are a few strategies to understand the competitive landscape and how you can position yourself effectively:
Once you've gathered this information, analyze it to identify gaps in the market, areas of opportunity, and ways to differentiate yourself. Here are some ways you might be able to add unique value:
Remember, your competition is not just other fractional CMOs, but also full-time CMOs, other types of consultants, and marketing agencies. Understanding your competitors and differentiating yourself is key to your success.
What does fractional mean for you? I’ve seen this range from real part-time to just sharing your time with multiple clients. As "fractional" can mean different things to different people, it can be good to think about what it means for you.
In general, being a fractional CMO typically involves providing CMO-level expertise to a company on a less-than-full-time basis, but the specifics can vary widely. Here are some common interpretations and the associated trade-offs:
Part-Time
The CMO works a set number of hours per week, perhaps 20 hours as you mentioned.
Project-Based
The CMO works on a specific project for a set duration.
Multiple Clients
The CMO works full-time but spreads their time across multiple clients.
Periodic/Intermittent
The CMO works for certain periods and takes extended breaks, like sabbaticals, in between.
Retainer Basis
The CMO is available for a set number of monthly hours, offering ongoing support and guidance.
Ultimately, the best approach depends on your goals, work style, and lifestyle preferences. It's important to consider what you want out of the role and to communicate clearly with potential clients about what they can expect.
What do you consider the value of your time? How much do you want to make?
The earning potential for a fractional CMO can vary widely based on several factors, including:
It’s common for consultants in general to charge anywhere from $100 to $1000 per hour, depending on the length or an engagement commitment. Some of the people I talk with have read Million Dollar Consulting by Alan Weiss and made $1M in income when working a full year as their goal. This would mean $480/hour if you work the typical 2080 hours (about 52, 40-hour weeks) in a year. Of course, a better way to get here would be to sell some of your expertise in the form of packaged services- or content, instead of selling your time. Many though, are happy just to complement some other forms of passive income and are comfortable with a lower rate and more flexibility. To each his own. You need to think about what’s important for you.
Do your own research, as these rates also change over time, and rates for a specific industry or geography could be higher.
There are a few ways you can get more current information on compensation ranges:
Remember, it's essential to charge what you're worth. It can be tempting to lower your rates to attract more clients when you're starting, but undervaluing your services can lead to overwork and burnout and can make it harder to raise your rates later.
Consider the value you provide the client and price your services accordingly. This also allows you always to deliver top quality and maintain and improve your reputation…and your reputation is the most important asset you have… (even if this does not work out for you and you want to back to full-time employment again).
Good luck on your journey, and feel free to reach out if you want to discuss more.
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