If you've just founded your first SaaS startup and have very little seed funding to stretch until that hallowed Series A moment, you need every shortcut you can get.
You know you need to hire a good marketing leader to figure out your go-to-market strategy, but it’s hard to spend money and time on something so long-term when you can get immediate results instead, by putting the resources into your product or sales team. Enter the SaaS Fractional CMO.
If you're looking to learn about the pros and cons of this particular hiring model - the fractional CMO - or about the skills to look for in this kind of hire, read on.
What's a Fractional CMO?
A fractional CMO (Chief Marketing Officer) is a part-time marketing executive who provides strategic marketing leadership to businesses that might not need - or cannot afford - a full-time CMO.
The concept is not new - smaller startups have been hiring experienced executives on a part-time basis for years now. But business loves a buzzword, and fractional CXO titles are popping up with increased frequency on Linkedin profiles.
The idea of hiring a SaaS Fractional CMO would be to get access to a seasoned SaaS marketer who can steer you past the challenges of early-stage without breaking the bank. There are trade-offs, of course -the most obvious one being that this CMO will not be working exclusively for you, but there are other considerations too. We'll discuss touch on them at the end, but let's first cover what a SaaS Fractional CMO might look like, and how they're different from other marketing execs.
How SaaS Fractional CMOs are different
Since the likes of Salesforce, Dropbox or Atlassian popularized the business model, SaaS has become pretty common in B2B, so if a marketer has worked in B2B startups, chances are they’ve been thoroughly exposed to the inner workings of a SaaS lead funnel.
But not all B2B is SaaS, and what applies to B2B in general, or even to B2C or D2C SaaS, doesn't always apply to B2B SaaS. We can dive into the alphabet soup some other day, but for the purpose of this post, let's focus specifically on what SaaS Fractional CMOs should look like.
As a SaaS business, you have to keep the following considerations in mind:
SaaS relies on periodic payments. You have to convince people to try the product in the first place, obviously, but the business model relies on periodic payments instead of one-offs, so user engagement is key. One big piece of that is customer marketing, and a good SaaS CMO will build their marketing strategy with continued engagement in mind.
SaaS products are their own marketing channel. This touches on the previous point; The time spent on the product is valuable attention from the users, and a good SaaS CMO thinks in tandem with Product and CS to keep the journey from User to Prescriptor consistent.
SaaS growth models are a balance between revenue and profit. This is especially true in highly fragmented markets like productivity software, marketing tools, or talent acquisition and HR tech (Read about the rule of 40 for more color on that). Even in early-stage, investors want to see a clear path to profitability. They know that founders tend to overestimate their ability to turn revenue growth into profit as the business swells up, so showing them a marketing strategy that takes that into account will reinforce that you're a sound bet.
What does a good SaaS Fractional CMO look like?
Given the above, what specific skills or experiences make a marketing executive more likely to be good at SaaS, and to deliver results even on a part-time basis?
Marketing knowledge
Data-Driven Decision Making: In the SaaS world, data is abundant. Your CMO should know how to analyze it to inform marketing decisions, optimize campaigns, and refine strategies based on insights. That means solid spreadsheet skills and at least a basic grasp on data modeling.
Digital Marketing Expertise: In SaaS, the majority of the customer journey is online. Proficiency in inbound marketing, content strategy, SEO, SEM, email marketing, and more is essential.
Tech-savviness: While you probably won't have the resources to splurge on a fancy marketing tool stack for them, they should nevertheless be familiar with sophisticated web and automation tools, analytics platforms, and the like. Otherwise, they will not be aware of the full universe of what is possible, and will not build your strategy with an eye to scale.
Leadership and strategy
Strategic Thinking: They should be able to see the bigger picture, setting a vision and strategy, while also understanding the granular details of execution. This is the sort of thing that comes with exposure and experience, so look for someone who has seen the inner workings of decision-making in companies both small and large.
Brand Building: Beyond just tactical marketing, the fractional CMO should be able to build and reinforce a strong brand identity, creating a narrative that resonates with your target audience. Brand building usually falls in the ‘not urgent, but important’ quadrant of the prioritization matrix, and so leaders in early-stage tend to ignore it. That is why strategic marketer are better at building brands; they keep the long game in mind while addressing day-to-day challenges.
Team Leadership: Even though they are a part-time exec, your SaaS Fractional CMO needs to play the full role of a team leader: they should mentor, guide, and manage your marketing team, ensuring you're hiring the right people, creating alignment, and fostering professional development.
Stakeholder Communication: As part of your executive team, they should be adept at communicating marketing results, strategies, and challenges to other stakeholders. Sales and Product leaders come to mind especially, but they should also be able to sell your marketing strategy to the rest of the company, board members, or potential investors if needed.
B2B SaaS mindset
Metrics-driven: Familiarity with the SaaS industry, its business model, pricing, and typical customer lifecycle is essential. They should understand the importance of metrics like Monthly or Annual Recurring Revenue (MRR or ARR), Customer Acquisition Cost (CAC), and Lifetime Value (LTV).
Growth hustler: SaaS companies often aim for rapid growth. A fractional CMO with a growth hacking mentality will explore creative ways to grow user base and validate hypotheses about the market, while still keeping in mind the scalability and cost-effectiveness of their activated channels.
Customer-centric: Understanding customer pain points, feedback, and needs should be at the heart of all their decisions, ensuring that the product and marketing strategies align with customer demands.
Should you go the Fractional CMO route?
Hiring a good fractional CMO of any kind is not easy, as we've outlined above. If you're going through the hassle of finding all these great qualities in a marketing executive, why not just hire them full-time?
The answer is, of course you should, if you can. However, chances are, a marketing executive like this can parlay their skills into a well-defined, stable marketing leadership role at a larger scale-up, perhaps as a Demand Generation, Content, or Digital marketing leader, where they will be paid the six-figure salary and bonus their expertise can get them.
If you can match that salary and throw in some share options to compensate for the risk of joining an early-stage team, that should be your first plan.
However, early-stage startups usually have to compromise somewhere. If you need to throw money at a particularly expensive engineering role for the next eighteen months, it might make sense to get a great marketer on a part-time salary for a while, until you raise further funding, for example.
The other obvious question to ask when considering this subject is: Why not hire a less expensive junior marketer for half the money and give them a chance to level up?
Hiring an expert of any sort at an early-stage startup always raises the same frustration with a founder strapped for cash: Why am I paying this person so much money when, for 80% of the time, they're doing really low-value-add work that a junior could learn to do fairly quickly?
And the answer is always the same: you're hiring them for the remaining 20%. The tasks where the difference between 'workable' and 'great' compounds over months and years and saves you gobs of time and money down the line.
So... what's the catch?
This hiring model obviously comes with trade-offs that should be carefully considered.
Trade- off 1
You still have to hire a full-time marketing leader who will belong to the business body and soul. Not really, but they will be fully present with the particular challenges of your business, your market, and your customers, every day of every week. They will be on call for you 100% of their corking hours, and you won't have to schedule your meetings around their working days.
Trade-off 2
Someone else will have to do some marketing grunt work, and that someone might be you, the founder, or someone else on your team. The SaaS Fractional CMO will be doing the complicated stuff, prioritizing channels and designing strategies and implementing an MVP of your tool stack, but it might not make sense to have them post stuff on social media, upload blogs on websites, or turn email automation on and off at odd moments.
They could, of course, but it might be more efficient to distribute those smaller tasks around the rest of your team, or give them to an intern or a junior marketing hire.
All in all, hiring a SaaS fractional CMO is no easier or harder than hiring a full-time one. It's a shortcut and it comes with trade-offs, but for some startups, it's the best way to lay down solid marketing foundations as they launch.
One last note: Ultimately, you're looking for someone who wants to work specifically with early-stage startups, because that is probably the biggest reason why a great marketing executive would be looking for a fractional CMO role, in SaaS or elsewhere. And isn't that the same driving motivation you'll be looking for in everyone you hire for your team?