10 Reasons for Hiring an Outsourced CMO

What is an outsourced CMO?

Let’s start with the easy part, the CMO is a Chief Marketing Officer.  The C-suite designation is earned through experience in leadership and management of the marketing function within an organization. Typically CMO’s will have a dozen or more years’ experience in both strategy development and tactical execution.

The CMO’s role is to advise the CEO and other executive team members how best to expand markets, increase awareness, build loyalty, drive engagement and grow revenues.  The high-level marketing leader is responsible for creating the “voice” for the organization through the brand experience.

A CMO is the brand ambassador, loyalty activist and customer champion.

Internally, the function of a Chief Marketing Officer is to bring together the talent, processes and technology that helps an organization realize the vision and execute upon the strategy that is aligned to specific organizational goals. It is the CMO’s responsibility to build the marketing plan that outlines roles, responsibilities, budgets, resources, timelines, tactics and measurable outcomes.  They lead the marketing organization and orchestrate their day-to-day activities.

Outsourcing for a company or organization is to purchase (goods) or subcontract (services) from an outside supplier or source.

Outsourcing is simply giving the responsibility of the position to someone that does not reside within the business. Why would you outsource an executive-level position?

Top reasons organizations outsource:

  • Experience and competence
  • Budget and/or need to reduce costs
  • Assessment of people, processes and/or technology
  • Gaps in skills and capabilities
  • Need for industry and market expertise
  • Resource constraints within existing teams
  • Urgency to drive initiatives or deliver critical projects
  • Strategic development
  • Team leadership
  • Tactical management and oversight
  • Need to streamline operations and workflows
  • Test job requirements and long-term business needs
  • Reduce risk
  • Advise and consult with leadership

Startups, SMBs, high-growth, turnaround and transitioning businesses can lack the time and dollars required to invest in bringing aboard a full-time senior marketing executive.  Outsourcing the CMO function allows leaders to leverage high-level talent in smaller increments of time and budget, while still gaining qualified and capable expertise that can help accelerate strategic business plans.

When do you need an outsourced CMO?

  1. You have a strong tactical marketing team; however, you do not have a marketing person sitting at the table where company decisions are made about the vision, mission, strategy, tactics and growth plans for the next 3-5 years.
  2. You lack a marketing strategy or plan.
  3. You desperately need a sustainable marketing engine that can deliver predictable results.
  4. You spend money on marketing, though you see little ROI or do not have the capabilities to track budgets, measure performance or forecast results.
  5. You need better competitive analysis and market research to know if you are talking to the right people and delivering the right products and services.
  6. You need a comprehensive assessment of marketing tactics, team members and capabilities to ensure you are built for long-term success.
  7. You know digital transformation can greatly improve your business, yet you lack the expertise that can represent marketing’s role in that process.
  8. You want to implement advanced tactics or implement marketing technologies to help the organization best utilize their data and assets to improve the customer experience.
  9. You need an expert that can help you improve brand loyalty, reduce churn and supports the business development team to achieve their growth targets.
  10. You are dissatisfied with results of marketing and the impact on revenue and know that you are missing out on existing market opportunities.

Today’s marketing function is complex. Business are operating at Internet speed, content is coming in from right and left, technology is taking over the world and digital transformation is accelerating the way we operate in our global economy.

Compounding it all are needs to manage vast amounts of data, utilize advanced analytics, define complicated customer journeys, understand the infiltration of artificial intelligence, manage talent, assess numerous marketing technologies, facilitate demands for personalization and improve customer experiences and create endless amounts of content to stay relevant. And that’s just the beginning. It’s overwhelming for most organizations, along with managing everything else that impacts growth.

It can’t be overstated, marketing is getting more and more complex. Companies need experienced executive marketing leadership to help manage growth, breakdown internal silos, and improve efficiency and economics.

Senior marketing expertise and leadership is essential at a macro-level to bring together the micro-level experts needed to deliver results in this entangled environment.

Having a competent leader that can help an organization stay abreast of trends, recognize opportunities, align resources, implement strategies and resist temptations to waste money is critical for any organizations’ success – whether working within the leadership team or as an outsourced contributor.

An outsourced CMO can provide the experience required to create, define, build, manage and execute the multitude of tactics needed to achieve your business goals.  

If you don’t have the resource internally, outsourcing the Chief Marketing Officer function provides flexibility for a business to utilize an experienced resource for the required time, scale and budget that the business can afford today.

If you have questions about the benefits of an outsourced CMO or are looking to assess your current marketing function, contact me at [email protected].

Jamie Glass, CMO + President, Artful Thinkers, a sales and marketing consulting company.

Return on Marketing Requires an Investment

One of the most important decisions a business owner or CEO will make is establishing a budget for marketing. Like talent, product and infrastructure, marketing must be viewed as a necessity in business.  Marketing expenditures are essential investments for growth.

An average SMB (small-to-medium size business) will typically set a marketing budget at 4% to 6% of sales revenues.  There are several factors that can impact this budget.  As an example, a well-funded startup may invest 20% of revenues for aggressive consumer acquisition programs and advertising.  Notice, the “well-funded” qualifier.  Likewise, there is always difficulty in setting a budget for a pre-revenue company. Entrepreneurs will often spend most of their investments in product and then struggle to bring in sales. Startup costs must include marketing.  For every dollar invested in product, people and infrastructure, an equal dollar should be set aside for investment in sales and marketing.

Here are three simplified phases for marketing investment planning:

1.  Brand Awareness:  Your marketing investment should start with focus in reach and awareness including brand identity, a website, company advertising and direct and social marketing.

2.  Engagement: The second phase invests in additional marketing programs that support your sales efforts including lead generation, publicity, web marketing (SEO and SEM), market validation, events, advertising, presentations and customer case studies.

3.  Nurture:  Finally, maximize your marketing investments with customer communications, CRM services, loyalty initiatives and nurturing programs to maintain the valuable potential and existing customer relationships.  Once you have them engaged, use your marketing spend wisely to develop and grow your relationship.

After your marketing budget is defined, you will want to establish how you will measure the success of your investment.  ROMI is the acronym for Return on Marketing Investment.  The calculation is total revenue divided by marketing spend.  ROMI = Revenue ($) / Marketing Spend ($).

Some marketing activities such as branding, advertising, PR and social media are harder to track impact and influence. As a rule of thumb, the simple ROMI equation gives you a thumbnail sketch of your return on your marketing investment.  ROMI is a good KPI (key performance indicator) for leaders to use in the business dashboard.

If you are a startup or pre-revenue, the marketing spend will be set as your budget for purposes of forecasting. Some may argue that there should be other factors added or subtracted, such as attributable revenues; however, most businesses have a difficult time tracking every dollar spent on activities such as advertising. Start with the broadest “buckets” and as you increase your marketing reporting and tracking sophistication, you can scrutinize spending with finer analysis.

Marketing is an investment.  Success in ROMI requires budgeting, reporting and analysis in order to fully actualize the benefits.

In lean times, business owners have a tendency to cut marketing spend. Lost time and lack of investment, even during challenging periods, impacts long-term growth. The result may not be felt right away. It is an illusion. Prolonged periods of reduced marketing spend can dramatically reduce sales opportunities. The fewer dollars you put into a marketing budget the greater the exponential impact on future revenues.

Similar to an investment savings account, the more you put into your “growth” marketing account, the higher potential return on your investment. The more dollars spent on high risk marketing activities, the greater risk to returns. Any sound investment advisor, marketing or financial, will counsel a business owner and CEO to invest based on the organization’s risk tolerance.  Marketing investments should be treated like any financial investment.  Know your risk tolerance, invest accordingly.  If the business has low tolerance for risk, eliminate marketing spend in expensive tactics that are difficult to measure. Always diversify your investment to mitigate risk.

In order to qualify for a return, it requires an investment.  Failing to set aside funds to market is failing to invest in business sustainability.  Expectations of sales without an adequate marketing budget is a business built on luck. Though we would all like to be lucky, if you plan to sell something, invest in marketing to create the sale.

I have a problem with too much money. I can’t reinvest it fast enough, and because I reinvest it, more money comes in. Yes, the rich do get richer.” -Robert Kiyosaki

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.