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July 28, 2020Pros and Cons of Outsourcing Your CMO Services
For growing businesses, decisions around human resources, hiring, and leadership are often the most difficult ones to make. And the choices made here can impact how the company functions and where it goes. On a very practical level, the team you mold and shape directly influences the company culture and how happy people are working for your business.
Certain hiring decisions are easy. If you need someone to pick and pack in your warehouse, you simply look for someone who has a track record of being reliable and honest. If you need someone to field customer service phone calls, you just find someone with customer service experience on their resume. Easy peasy.
The tricky part is when you have to hire someone at a C-suite level, like a Chief Marketing Officer (CMO). Positions like this hold tremendous weight and influence within the organization. They can also cost a lot to fill – particularly if you’re going outside of the organization and hiring someone with extensive experience.
But for many growing companies, there’s a better way. It involves outsourcing a CMO, as opposed to hiring one as a salaried member of the team.
Could this be a good option for you? And if so, what sorts of pros and cons can you expect along the way? We’ll cover all of that and more in this power-packed blog post.
Table of Contents
What is an Outsourced CMO?
Let’s begin by clarifying precisely what a CMO does and the role they play inside your organization (whether salaried or outsourced).
Typically, it’s the CMO’s role to advise the CEO and other members of the executive team on ways to best increase brand awareness, expand markets, drive qualified leads to the sales team, enhance engagement at key marketing touchpoints, and ultimately grow revenues.
The CMO is the head of the marketing wing of the business and directly oversees a variety of elements and initiatives. This may include any or all of the following: content, social media, branding materials, website design, search engine optimization (SEO), other forms of online media, and offline media.
It’s the CMO’s responsibility to build out a marketing plan that clearly outlines roles, responsibilities, resources, timelines, budgets, tactics, and measurable outcomes. In an ideal scenario, they’re involved in the day-to-day activities as an orchestrator, rather than a hands-on executor. They’re responsible for leading the team through strategic guidance.
An outsourced CMO is someone you hire on the outside of your organization by way of a contract or agreement. This individual has nearly all of the same qualifications as any CMO that you would hire internally, but works in a contractor capacity.
When Do Businesses Hire Outsourced CMOs?
Most small businesses and startups are comfortable with the idea of outsourcing certain aspects of marketing. In fact, an estimated 62 percent of companies outsource their content marketing to a freelancer or agency. So the notion of outsourcing a CMO isn’t totally out of the ordinary. It’s just happening on a much larger scale.
In our experience, businesses typically outsource for one or more of the following reasons:
- To achieve a higher degree of experience or competence.
- To reduce costs.
- To bridge a gap in skills and capabilities.
- To overcome resource constraints.
- To find strategic vision.
- To improve leadership.
- To streamline workflows and oversight.
- To test job requirements and long-term business needs.
- To reduce risk related to important hiring decisions.
Sometimes businesses know they want to outsource the role right from the start. Other times it comes down to a choice between hiring a full-time CMO as a salaried member of the team versus hiring an outsourced CMO to fulfill the same duties via a more independent agreement.
The Biggest Pros of Outsourcing a CMO
The fact that more and more businesses are switching from the traditional in-house CMO to working with outsourced CMOs isn’t a random coincidence or fleeting trend. Savvy business leaders pursue this option for a number of reasons. Here are a few of the biggest benefits:
1. Reduces Overall Marketing Costs
Hiring an outsourced CMO is a financially savvy move in multiple regards. Not only does it save you on the payroll, but it can also dramatically reduce your marketing expenses.
Let’s start with the payroll aspect. The real power in hiring an outsourced CMO is that you don’t have to pay for all of the added expenses that come with an employee. There’s no payroll tax, 401(k) match, health insurance, vacation time, sick days, training costs, office space, or equipment. This alone can save you thousands of dollars per month (when compared to hiring a full-time CMO).
Then there’s the fact that a good outsourced CMO will help lower your marketing expenses by eliminating the need for some of the current tools, software, and inefficient funnels that you’re currently using.
There’s also the benefit of predictability. Many outsourced CMOs operate on a flat-fee basis. (Others charge an hourly rate, but can generally pinpoint a precise range of how many hours they’ll work on a weekly or monthly basis.) This permits you to plan your budget. You know exactly what you’re paying ahead of time and don’t have to worry about what’s coming your way.
2. Increases Productivity
Any time you outsource a task, it frees up internal resources. And by outsourcing the CMO position in your business, you should be able to free up over 100 hours per month in additional time that can be spent on other tasks.
Most businesses that hire an outsourced CMO are transitioning from a situation in which they’ve been handling the CMO’s responsibilities on a “by committee” basis. In other words, multiple employees have stepped up to absorb the duties (which takes away from their primary job responsibilities). By outsourcing, these employees suddenly reclaim time in their daily schedules to carry out the duties that they were hired to handle in the first place.
When it’s all said and done, the increased productivity is a byproduct of greater specialization. Everyone is empowered to work according to their strengths and the result is an increased sense of harmony and a dramatic rise in output and performance.
3. Provides Strategy and Direction
It’s not that your current hodgepodge marketing team is incompetent. These folks were hired for a reason. The bigger takeaway is that they lack direction and strategy. They need someone to come in and provide leadership and guidance – pushing them towards bigger and better goals.
An outsourced CMO provides an immediate jolt of strategy. They aren’t just coming in and implementing a new PPC ad strategy or a fresh take on how to create high-converting social media posts. They’re actually creating a cohesive plan where each of the individual parts – like content marketing, social media, SEO, design, and email – work together for the benefit of the big picture.
4. Injects a Fresh Perspective
Do any of the following situations or circumstances resonate with your business?
- Everyone is indifferent about showing up to the office in the morning.
- Relationships get taken for granted.
- Each employee’s workload is handled on “autopilot.” People just go through the motions.
- You can’t remember the last time there was a substantial change in a key business process.
- There’s nothing new coming down the innovation pipeline.
If you’re nodding your head, it means your business is stale. Things might be happening, but there’s little (if any) sense of purpose. People clock in, put their noses to the grindstone, and clock out. It’s not miserable, but it certainly isn’t exciting or meaningful.
Or perhaps your problem has more to do with laser-focused innovation. In other words, you and your team are wholly focused on one niche or path at the expense of everything else. You’ve become blinded by your own collective way of thinking. Groupthink has become more powerful than individual thoughts. Everyone agrees with what’s always been done and shuns anything new as risky.
Whether your team is stale or blinded, an outsourced CMO can help by providing an instant injection of fresh perspective. Because they’re new to the business, they still see things from an outside-looking-in vantage point. This enables them to make unique suggestions, propose changes, tweak processes, and redirect energy in more profitable ways.
5. Accelerates Business Growth
When it’s all said and done, outsourcing a CMO allows businesses to scale at a faster rate. Lower costs, higher quality of output, less time commitment, and increased focus – they all directly fuel the bottom line and provide a competitive advantage that’s conducive to growth.
If you follow the right steps, growth is nearly guaranteed. The biggest question mark is whether you’ll be prepared for the growth. It’s important to have plans in place to scale with efficiency, lest you waste the inputs and squander the opportunity to push your business into the next echelon.
The Biggest Cons of Outsourcing a CMO
For all of the distinct benefits that come with outsourcing a CMO, we’ll admit that it isn’t perfect for every company. Depending on the circumstances in and around your business, it might not be an ideal setup. Here are some of the disadvantages that potentially arise when you outsource the CMO role:
1. Some Lack of Control
Any time you bring in someone who is outside of your company to manage a core component of your business, there’s going to be some lack of control. And depending on your management style and personality, this could create some real friction for you.
The truth is that you’re always going to have the final say on a project – it’s just that you won’t have the same level of involvement as you’re accustomed to having. You must be willing to give up some of the control that you’re used to and trust that your outsourced CMO will live up their end of the bargain.
This issue speaks to a larger point, which is the importance of hiring an outsourced CMO who is organized, trustworthy, and attentive to details. If you’re able to zero in on these traits during the selection process, your lack of control will feel less troublesome.
2. Resistance From the Team
In many companies, there’s an “us” versus the world mentality. Businesses can become very cliquish in their thinking – almost as if anyone outside of the organization isn’t worth trusting. Sometimes this can be good. But it often spills over in some less than ideal ways. For example, your team might not immediately embrace an outsourced CMO in the same way that they would a CMO whom you hire as a full-time, internal member of the staff.
This resistance from your team can range from minor to serious. In minor cases, there’s internal, individualized non-acceptance of CMO. However, each employee chooses to see past these personal beliefs and work for the good of the team.
In serious cases, there’s collective resistance and combativeness. This is where people literally or figuratively say things like, “Who are you to tell me to do that? You don’t even work here!”
Minor resistance might not appear so bad, but its lack of overtness may allow it to fester into something larger. Serious resistance needs to be headed off quickly, but usually gets messier before it gets better.
Again, this isn’t an issue in every company. It is, however, something to take into consideration as you embark down this path.
3. Challenges in Communication
We’ve come a long way with communication. It used to be that you had to pick up the phone and call someone every time you wanted to get an update or assign a project. Then email came along, which streamlined communication in business settings. That’s been followed by direct message platforms like Slack, which cut out the distractions of traditional email. However, challenges still exist.
The array of communication channels sometimes makes it difficult to keep everyone on the same page. Sometimes you send an email, other times you share a file via Slack, then there are other times when you need to pick up the phone or schedule a Zoom meeting. It all feels a bit fragmented.
Then there’s the issue of clarity. It can be hard to fully communicate ideas when you aren’t face-to-face. And because most outsourced CMOs work remotely, there are often challenges in communication. (At least initially.)
4. Delays in Deliveries
In the world of outsourcing, the “4x Rule” states that it will take four-times as long to complete a project than is quoted by the outsourced individual or company. These delays are typically due to miscommunication, lag in communication, or inaccuracies.
While you probably won’t experience a true 4x delay with a competent outsourced CMO, don’t be surprised if there are regular delays and extended deadlines. This is just part of the learning process.
5. Possible Culture Fit Problems
When you hire a full-time CMO onto your staff, they’re immediately immersed in the inner workings of your company. And in businesses with physical offices, they’re quickly put into new surroundings where they must learn the culture. An outsourced CMO doesn’t always get this cultural baptism right way (if ever).
Cultural context is critically important for a CMO. Because in order to effectively reach customers and convey value, there has to be a clear understanding of what the company stands for and believes in. These can be documented in a guide, but it’s difficult to truly convey them without being immersed.
How to Find the Right Outsourced CMO
Run a quick Google search for “outsourced CMO” and the results will make you dizzy. There are thousands of options to choose from. There are individuals, agencies masquerading as CMOs, and everything in between. The question becomes, how do you find the right outsourced CMO for your needs?
Here are a few pointers:
- Brainstorm your ideal CMO. It’s critically important that you have an idea of who you want as a CMO for your company. Don’t be afraid to get specific. Include experience, skills, strengths, weaknesses, and even personality traits. If you work with an agency, they might have a dozen or more outsourced CMOs for you to choose from. Knowing precisely what you’re looking for can help narrow down the options.
- Ask around. Google isn’t always the best place to start a search. For something as important as an outsourced CMO, you might be better off fetching a few referrals from other business owners and professionals in your industry.
- Conduct a rigorous interview. Take the interview process just as seriously as you would with a full-time hire. Get to know prospective CMOs and vet them based on your criteria and expectations.
- Don’t get locked in just yet. Every outsourced CMO operates a little differently. Understandably, most will want to lock in an extended retainer right off the bat (at least 12 months in many cases). However, do your best to negotiate a softer start. It might even be worth paying a slightly higher rate for a shorter upfront agreement. This gives you a chance to evaluate the CMO after they’re in the position and cut ties if the relationship isn’t working.
- Identify measurable outcomes. When extending an offer to an outsourced CMO, provide them with measurable outcomes that coincide with your expectations. Ask them if they have any hesitancies about meeting these expectations. Then track these goals religiously to gauge their performance.
The beauty of hiring an outsourced CMO is that you aren’t marrying anyone. Yes, it takes a lot of energy and resources – including capital – but it’s much easier to cut ties with an outsourced CMO than someone you’ve hired onto the payroll. Let this provide some confidence as you move forward. (Though, if you’ve done your due diligence, there’s no reason it shouldn’t work out well for your business.)
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Over the years he's written for publications like Forbes, Entrepreneur, Marketing Land, Search Engine Journal, ReadWrite and other highly respected online publications. Connect with Tim on Linkedin & Twitter.
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