ROI of a CMO-as-a-Service

Out of a company’s executive suite, which position has the highest turnover rate?

The answer is the Chief Marketing Officer (CMO).

The average CMO doesn’t last longer than 42-44 months on the job across industries. And at B2B SaaS and tech companies, that tenure is even lower: 2-3 years or less. 

Add in factors like company size or startup stage, and you’re looking at a position that lasts anywhere from 8-18 months.

Find your CMO-as-a-service at Kalungi

When you hire a CMO as a service, you gain access to the same level of experience that your small SaaS company needs without having to pay a full-time CMO.

And if the fractional CMO service includes a marketing team, you’re setting yourself up for success right off the bat—all while saving money.

To find your next CMO-as-a-Service, get in touch with our team. 

The problem often lies in two buckets: Experience and Funding. 

1. Finding someone with relevant experience

If you are a start-up or a smaller company, you need an experienced CMO to take over. After all, you need to ramp up quickly and effectively market your business. Successful marketing initiatives are often costly upfront, and that doesn’t factor in the price of hiring a CMO who knows what they are doing.

Everything starts to add up, and suddenly you cannot afford to keep your new CMO, so you give them the boot. This leads to the second bucket: funding.

2. Receiving enough funding

Companies often realize they cannot afford to hire an experienced CMO, so they come up with a solution: wait until they receive the proper funding. Once the money is in the bank, they can hire the right level of marketing leadership experience.

The problem with this approach is that delaying your CMO hire leads to lost opportunity costs or mistakes. And the cost doesn’t become apparent until it’s too late to catch up.  

Details

The below graphs compare the investment in a CMO-as-a-Service vs. hiring someone full time.  For this example we took typically compensation data in an average market (so not Silicon Valley, details here) and added benefits, cost of hiring, equity vesting and potential severance.  In the below analysis the cost after 5 years is about $2.2M for a CMO on your payroll, vs. $1.4M for a CMO-as-a-Service. If your W2 CMO does not last 3 years the economics worsen. 

cumulative

Below are the details comparing the cumulative cost of a W2 CMO with a CMO-as-a-Service

w2-cmo
caas

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