Three Questions To Ask Before Hiring A CMO
It's an exciting time for most growth-stage ($5 million in annual recurring revenue and above) companies when they decide to hire a chief marketing officer. Sales are happening, revenue is finally real, and leadership is ready to scale the product.
The company may have minimal marketing support or what's been determined as the "wrong marketing" in place, and they believe now is the time for a new strategic direction.
Filled with optimism, leadership finalizes a chief-marketing-officer job description and imagines how this magical marketing savior will descend to start getting revenue to rain down on the company.
The reality is much different and explains why the median tenure of a chief marketing officer has been closer to 27 months for the past few years.
It's also why I'm constantly hearing from clients, startups, and my contacts in the private-equity and venture-capital world: "Why do we keep hiring the wrong chief marketing officer?"
The answer isn't that you need a different chief marketing officer. The answer is that the company isn't ready to hire a chief marketing officer — period.
So how do you know it's the right time?
1. Do you need a coach or a player?
There is a sentiment I hear all the time among CEOs: "No one can know my business unless they are in it day to day."
There's some truth to this statement, but what a chief marketing officer does best is not unique to your business. Much like chief revenue officers aren't spending their days cold-calling and chief financial officer aren't setting up basic spreadsheets, chief marketing officers should not be posting on social media, curating email lists, or executing web copy.
You would be wasting their experience and skills.
This is not to say that chief marketing officers are not often "player-coaches," but to get the "coach" part, you need to provide the right resources: staff and budgets.
What goes into a growth-stage marketing budget?
- Technology stack:
- Marketing automation/customer-relations management
- Analytics/reporting
- Social-media management
- Advertising/paid marketing
- Public relations/earned media
- Social media
- Design
- Content/editorial
- Search-engine marketing/search-engine optimization
- Sales enablement
- Events
There are different schools of thought around whether a marketing budget should include salaries. Because many of the outputs (blogs, social posts, etc.) are usually marketing-staff deliverables, it makes good sense to include staff in the overall number.
The salary of a chief marketing officer should not roll up though; it inappropriately inflates the numbers. As a quick rule of thumb, I like to allocate between 5 and 15% of annual recurring revenue as a good guideline for marketing spend.
2. What's the timing of your exit event?
When do you want to transact? If you're the CEO, answer as if you're the one who's asking and be brutally honest with yourself.
If you're transacting in the next 24 months, do not hire a chief marketing officer. Chief marketing officers bring experience, strategy, and a desire to build long-term plans for long-term results. Getting to know the business, the players, and the landscape takes at least six months, and it often takes 12-plus months for real and substantial revenue growth from things like strategic content initiatives.
That doesn't mean there won't be quick wins along the way, but truly changing direction takes time.
Below is a useful rubric to explain the areas of marketing that will produce value for your company depending upon your transaction timeline. Transaction is defined as a strategic acquisition, investment round, or partnership with a private-equity or venture-capital firm, or even a merge. In short, a transaction is a major change in leadership or ownership.
3. Will you be able to staff the role appropriately?
"I hired a CMO for $250,000 — they should be bringing me leads," a client said recently.
But leads don't happen because of a single person. When you pay for a chief marketing officer, you're paying for a high-level marketer to be in the business day to day and provide suggestions on how to make strategic long term changes to drive results and success.
Seasoned marketing leaders help set the structure. They put in place the systems, playbooks, and rubrics they've used successfully to drive revenue and goals before. Then the junior folks execute on that strategy.
Those companies with longer runway can use the editorial strategy, writing support, and day-to-day interactions of a chief marketing officer to help strengthen the overall brand experience.
If you're looking to increase leads or test a few different acquisition approaches, consider using a part-time resource to help you set your marketing strategy. Or look inward: Invite your middle-level folks to higher-level meetings and get them even further steeped in the business. You may find there's a seasoned marketing leader waiting to come out.
If it's not already clear, the secret to finding the right CMO is time.
As a CEO, the most important conversation is the one with yourself. Do you have a multiyear runway to let your chief marketing officer succeed?
If the answer is no, that's OK. Put your efforts into creating a team that drives the quick wins needed for a faster transaction.
It's up to you to be one of the lucky CEOs that hires the right marketing talent at the right time with a much better outcome for you, your business, and your team.
Originally Published In Business Insider
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2023 Women of Influence honoree: Aimee Schuster, Bandwidth Strategy
How would you quickly describe your job and what you do to someone you just met?: I’m an expert at marketing the invisible, having spent the last 25 years helping B2B organizations like Miller Heiman Group, DLA Piper and Homefinder.com build, advance and energize their lead-generation programs. I founded Bandwidth Strategy, a fractional CMO and COO consultancy, to help growth-stage organizations drive the right leads into the funnel that result in closed-won business. Using my experience and a bit of humor/improv (honed as a student at Second City), I help create a common language among the all-too-often warring factions of sales and marketing.
The attributes I look for in a candidate when hiring are: Responsibility, proactivity and curiosity.
The best advice I’ve received for career development is: Take improv. It was the absolute best career and life training, and I recommend it to almost everyone I work with.
A tip I’ve learned that’s helped me with networking is: Just say yes. As an introvert, I naturally gravitate toward alone time and/or staying at home. I try to say yes when an invitation comes my way despite my instinct to say no. While I routinely dread going, I am always happy, fulfilled and excited that I said yes.
What is the biggest challenge facing your industry and/or company, and how should that challenge be addressed?: I've heard from more than one CEO, "I like for marketing and sales to have healthy tension. It's good for business." I think the hardest part of that statement is the thin line between "healthy" and "hostile" tension. I see cleaner funnels, increased lead velocity and quicker revenue growth by dialing down the tension and increasing the communication between marketing and sales. As I've written, I advise my clients to tackle the following five questions to overcome sales and marketing misalignment in a B2B environment:
- Do you have a shared language? Define key terms and align on their meanings to avoid misunderstandings.
- Do you have service-level agreements? Agree on response times and establish systems for lead handoff and monitoring.
- Do you have agreed-upon prospect titles? Understand the specific roles and titles that both sales and marketing teams target.
- Is there consistent reporting from marketing to sales teams? Create dashboards to provide a single source of truth and foster collaboration.
- Do sales teams provide consistent feedback to marketing teams? Maintain ongoing dialogue and hold regular summits to ensure alignment and adapt to changing dynamics.
Do you serve as a mentor for someone? If so, how do you fill that role?: At any one time, I offer two gratis mentorship slots to anyone who is interested in a long-term coaching relationship. A slot is one hour of consulting time once a month. I usually support women entrepreneurs, CMOs or sales practitioner who need either marketing, sales, operations or career advice. I also founded the 1871 WMNtech Leaders four-month accelerator and mentoring initiative devoted to cultivating the next generation of women-identifying leaders. We’ve supported 130 women across 50 companies to help develop their professional selves and succeed in Chicago tech startups.
Do you have a mentor yourself? If so, what do you get from that individual?: I have a few, and they are incredible at career advice and, my most recent passion, angel investing.
What’s the biggest challenge facing women who want to take on leadership roles, and what can be done to address that?: I recently wrote an article for Fast Company in which I describe what I see as one of the biggest challenges for women: the loss of social capital in the post-pandemic world. Pre-pandemic, there was no shortage of challenges for women in business: pay inequity, a lack of C-suite roles and minimal board-of-directors representation. Any progress we’ve made in these areas is largely because of the social capital we gained through face-to-face networking, lunches, coffees, events and water-cooler conversations that I participated in for the bulk of my career. All of these efforts created the social capital that helped me in my job at the time but clearly helped me even more in the totality of my career.
What mistake do young professionals make, and how would you advise them to avoid it?: As a young person in today’s economy, I would push hard to find an organization that offers an in-person or hybrid-work option. Use IRL meetings to build relationships with collaborators and mentors so you can learn and fail and grow in your career. Create networks of women and men who will help you succeed over time. The mistake would be thinking that a virtual, Zoom-only world is an easy solution. You will have a much harder road to travel in the future.
Are you working from home, from the office or a mix of both?: A mix.
What time-management strategies or lessons-learned do you use to manage your schedule and meet your obligations?: As someone who has to context-switch between clients, I use a couple great tools: Shift, a desktop app for streamlining and collaborating across accounts and workflows, is huge to help me keep my email streams from crossing; and, Toggl, which is incredibly easy to use for time-tracking across clients.
As we approach the end of 2023, you’ll consider this to have been a good year professionally if — what?: As a result of being at the Highland Park Fourth of July parade shooting in 2022, a ”good year” in 2023 (or any year) is the perspective that life can be short. Work with the people who lift you up; don’t work with people who drag you down. I’m incredibly blessed to have had a great 2023 with wonderful clients and a healthy family, and for that I am thankful.
What’s the biggest challenge facing the Chicago business community that needs attention as we look ahead to 2024?: The nexus of office vacancies and the growing influx of refugees arriving from other states and across our borders. We have too many people on the streets and too many spaces being underutilized.
What charities/foundations/causes do you regularly support or volunteer with?: 1871 WMNtech Leaders and Jewish United Fund Uptown Cafe.
What book have you read recently that you’d recommend?: "The Puma Years"
What’s the farthest from Chicago you’ve traveled?: South Korea. My sister was teaching English there and I went to visit her. We also traveled to Japan
What’s something about you that would surprise your fellow Women of Influence honorees?: I’m an introvert who presents as an extrovert. I would much rather be marketing other people than marketing myself.
Should I Be a Fractional CMO?
If it seems to you that everyone is going fractional these days, you're not alone. According to Google Trends, search-term interest of "Fractional CMO" totaled 284 in 2018 and jumped to more than 2,043 in 2022—a 600% increase!
There are a lot of reasons for that growth in interest. Gen X, Millennials, and (my personal favorite subgroup) Xennials know that, unfortunately, few companies reward loyalty today. In addition, many of those folks have reached at least two decades in the workforce—more than enough experience to go out on their own.
In today's dynamic landscape, there's less time for CMOs to ramp up and build an organization with a five-year plan. Enter the fractional CMO, who brings expertise as a "hired gun," with more cross functional expertise, more objectivity, and less ego.
Unsurprisingly, as someone who has run a fractional CMO practice, I get asked about it a lot.
The fractional CMO conversation starts out something like this...
'Have you had success as a fractional CMO?'
Success has come in waves. The first two years were gangbusters (I made more money than any previous full-time job I held, and I was working fewer hours), but Year 3 started out slow. The recession fears and the SVB scare certainly had an impact on my business (as they have on many other services-based businesses). It's not all roses all the time.
'Can you be fractional without 'hustling' for business?'
The world "hustle" is often associated with sales, and most folks not in sales tend to shudder at the term. Though I don't fear sales, I do believe in the long game. I don't offer a widget, so I'm looking to drive ongoing mutually beneficial relationships. Not surprisingly, my "sales" techniques are for the most part long-game marketing: writing articles, speaking on podcasts; most important, I try to provide as much value to my network as possible.
'What is the difference between fractional and consulting?'
Fractional is a part-time role for approximately six months (or more) and probably at least 15 hours a week. As a fractional CMO or COO, I often receive an @company email, evaluate teams, audit systems, and coach up (or out) employees. I have a handle on and drive actions toward the overall business objectives. I'm also often a sounding board and ear to the CEO, who may not want to discuss certain frustrations with C-suite colleagues directly.
Consulting is for the most part project-based: Think shorter timelines and defined deliverables.
Then the conversation shifts toward 'Is fractional right for you?'
When I meet with folks interested in exploring fractional work, I use the following rubric to lay out what I consider to be some of the important questions to ask. I call it a "Fractional Hierarchy of Need."
Fractional Hierarchy of Need
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Can you access health insurance?
Unfortunately, health insurance is still among the No. 1 concerns when going out to start a consultancy, business, new opportunity.
The healthcare marketplace does provide some options, but for those of us who have spent our lives in jobs that provided steady and reliable health insurance, independent health insurance is not an equivalent. It's unfair, frustrating and something uniquely American; but it is the reality.
I'm very honest in saying I get my health insurance through my spouse. I'm lucky, and I don't gloss over that when talking to folks. Insurance is a real concern in the evaluation process. Many people I talk to are just leaving jobs and have the option of COBRA, which is great as it affords someone an 18 month runway to try to make a go of fractional work.
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Do you have a network big enough to support you?
I built my network throughout a 20-year period by always saying yes. I say yes to meetings with people who want my advice, I say yes to speaking engagements, I say yes to writing opportunities, yes to mentoring, and yes to volunteering. Whenever possible, I say yes—because despite knowing that 90% of the conversations I have won't turn into "wins" right away, there is a good chance they will turn into wins (for me or someone else) later on.
If you are considering fractional work and you are someone who doesn't have an extensive network, you might want to consider that...
You will probably need to do more outbound sales activity — which is great if you're comfortable with that.
If sales isn't your thing, whether finding another full time role might be the better move.
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Does this type of work light you up?
Years ago, when speaking with a brand new colleague at a company where I was an employee, she said, "I just hate the first year of a new role. Nothing is set, everything is new, I have to build from scratch."
My jaw hit the floor. I couldn't believe it. The first year was my favorite time: I loved the building, scaling, and trying out new things. You are afforded so many opportunities in those first 12 months; you aren't yet beaten down by politics or the "we've already tried that" mentality. You have a fresh perspective.
After 12 months at a full-time job, the work becomes more rinse and repeat; and that never got me going. That is how I knew I would love fractional work. I really like the beginning; I want to be a part of the setup and the start line. I don't need to see the project to fruition to get satisfaction and feel gratified.
If you need to see the end of the project , fractional work will not light you up.
* * *
Although "Fractional CMO" has become a trending term, the practice, for many of us, is here to stay.
The opportunity to be a fractional CMO and to lead a practice is a tremendous privilege. I find a lot of fulfillment in both the work I do and the opportunity to mentor people who are considering becoming fractional. For many, I'm able to shine a light on a new world, a new way of thinking, new ways of using skills and benefiting businesses. For others, I've walked them through a scenario that doesn't work for them in their specific place in life. In both cases, the Fractional Hierarchy of Need provides clarity.
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