The Anatomy of a Fractional CRO

The Anatomy of a Fractional CRO

 

I know running a small to midsize business can feel like riding a rollercoaster blindfolded sometimes. You’re hustling hard, trying to crack the code to grow revenue and turn a profit, but it’s like hitting a wall sometimes, right? You feel like you’re always in survival mode when you know that your product/service merits an environment of thriving but the numbers aren’t playing that out.  Is it possible that fractional executive roles can be the answer? Perhaps it’s time to consider a CRO for hire situation.  We’re going to share with you why this might be a real viable option for small to mid-size businesses not just because we say so, but because the numbers say so and history speaks favorably of this as well. So let’s get going.

Real Talk

Lately, you’ve been getting bombarded with new opportunities to offer your products/services  left and right, and it should feel like you’re on top of the world. But instead, it’s like a wake-up call – your sales program is a problem. You thought it was more of a “plug and play” than it really is—Hire the professionals. Pay them well with great incentives. Have a great product for them to sell. And then let them loose! Great plan, right? Instead, its real condition is hitting you like a ton of bricks and you feel like you’re out of your league on how to fix it and have it running like a smooth machine like the big wig companies have.  The leads just aren’t converting to the numbers that you had counted on.  What’s wrong?!

I get it. You’re juggling a million things already and now this. The lifeblood of your business is on the fritz. How do you fix the problems?

Problems? What Problems?

• The leads that you’re paying good money to come into the door aren’t getting the kind of attention that you’d give each one of them, let alone the

professional attention that you thought you paid for when you hired your sales team.

• Then there are the leads that come in that are just spinning the wheels of your sales team’s time that aren’t worth a hill of beans.

• Yet somehow your sales team is busier than a one-armed wallpaper hanger trying to generate new leads and all that’s involved in that work.

• And don’t even get me started on that sales comp plan – it’s like bleeding money faster than you can say “ouch.”

• Plus, there’s this whole mess with marketing and sales not singing from the same song. Don’t they know that a duet is supposed to sound beautiful, not like screeching cats?

You initially believed that focusing on marketing would solve your problems, but you’ve come to realize it only compounded underlying issues that were previously hidden. Now, with substantial investments in marketing and insufficient ROI to show for it, the situation seems to be backfiring, leaving you puzzled about where things went wrong.

Fractional CRO: Unlocking Revenue Growth for Small and Midsize Businesses

Now, you might be wondering, what’s the big deal with these fractional executive roles? It’s all about getting expert level talent on a part-time basis. You get access to C-suite expertise without committing to a full-time salary. It’s like having your cake and eating it too! (Hope you like cake) For example, our fractional CRO brings 25 years of sales experience, including 15 years in leadership roles. Hiring that kind of expertise full-time would cost a small fortune. Plus, they have 15 years of fractional CMO experience with a focus on customer success and conversion. To hire someone with that level of experience full-time, you’d be looking at nearly $300,000-$400,000 total compensation, plus benefits when you include equity and bonuses, to be inline with a typical fractional CRO salary. But with a fractional executive, you get all that expertise for a fraction of the cost. And the perks don’t stop there. Fractional CROs bring a fresh perspective that’s invaluable, along with a wealth of experience across different industries. They don’t just offer advice—they roll up their sleeves and help implement those game-changing ideas. So, if you’re stuck in a revenue rut, it might be time to consider a Fractional CRO. With their guidance, you’ll be on the fast track to growth without breaking the bank. Think of it as the secret weapon you never knew you needed.

 

Why Hire a Fractional CRO?

 

That’s a perfectly reasonable question. First of all, I want to share with you a hard and fast rule.  You can’t afford to hire a fractional CRO services if they don’t know how to manage senior leadership, run a tight ship, and hit growth targets. When hiring a fractional CRO it comes down to fixing key symptoms in your company. One of the best ways to level the playing field against the big boys is to bring in the expertise that they have access to.  That’s where a fractional CRO comes in.  But more importantly are the symptoms that show up that tell you it’s high time for that fractional expert to step up to the plate. So, let’s dive into something crucial for your business: Why hire a Fractional CRO? You’ve built something incredible here, no doubt about it. But as you’re hitting that revenue sweet spot, you’re also facing some roadblocks that are stalling your growth.

 

So, picture this: you’ve got a strong foundation with your core product or service. Customers love it, and referrals are pouring in. But as you start scaling up, things get a bit tangled. Your sales and marketing machine, once smooth and efficient, starts coughing and wheezing like an old car on a cold morning.

 

Now, why does a Fractional CRO matter in all of this? Well, let me break it down for you:

 

• Expertise on Demand: You need top-notch executive leadership in both marketing and sales, but hiring full-time C-suite talent can be a taxing investment. With a Fractional CRO at Invictus CMO, you get access to that expertise without breaking the bank in both areas and with an exceptionally talented CRO, in the area of customer success as well.  The fractional CRO salary is typically 50-70% lower in labor costs. (The same can be said about fractional CMO costs) Source CEO World. And ultimately it’s like having a seasoned pro team in your corner whenever you need them.
• Plug-and-Play Solution: You’ve probably got a laundry list of symptoms that signal you need help – weak sales, stagnant growth, underperforming teams, being way off on forecasting. A Fractional CRO swoops in like a superhero, diagnosing the problem and implementing solutions faster than you can say “revenue boost.”
• Flexibility and Agility: Your business is dynamic, and so are your needs. With a Fractional CRO, you have the flexibility to scale up or down as needed. Need more firepower during a busy season? No problem. Ready to dial it back during slower times? They’ve got you covered.  That’s totally possible with most fractional roles, though it’s important to keep in mind how long of a runway is necessary to take care of mitigating the problematic symptoms that are showing up in the first place.
• Fresh Perspectives: Sometimes, you’re too close to the problem to see the solution, or worse, to see the problem in the first place. A Fractional CRO brings a fresh set of eyes to your business, spotting opportunities you may have overlooked because of being stretched so thin and breathing new life into your sales, marketing, and customer success efforts.
• Results, Not Just Advice: Let’s face it – you’ve probably received plenty of advice on how to fix your sales and marketing woes. But a Fractional CRO doesn’t just talk the talk; they walk the walk. They’re hands-on, rolling up their sleeves and getting down to business to deliver tangible results.  They’re Chief REVENUE Officer after all. Not Chief Hope Officer.

So, my friend, if you’re wondering why hire a Fractional CRO, the real question is: why not? With their expertise, flexibility, and results-driven approach, they’re the secret weapon you need to take your business to new heights.

 

What are the Roles of CRO?

In understanding the significance of Fractional CRO roles, it’s essential to delineate their key functions within an organization. While the specific responsibilities may vary depending on the company’s needs, Fractional CROs typically oversee sales, marketing, and customer success initiatives and sometimes product development. They act as strategic drivers, aligning these functions to maximize revenue generation and enhance business performance.  A smart fractional CRO will work to bring cohesiveness within the existing persons working within these departments and have them work together—openly, with all persons working to solve the same problem.  But overall, these are the fractional CRO roles that you will see fulfilled by an experienced fractional CRO.

 

 

What Does a Fractional CRO Do?

 

Let’s get down to the nitty-gritty of what a fractional CRO actually does. There are generally two types of focuses for these folks, each bringing their own set of skills to the table.

Sales Oriented CROs

First up, you’ve got your Sales Oriented CROs. These are the ones who dive deep into the trenches of your sales and customer service departments. They’re all about boosting your sales processes, finding those upsell opportunities, nurturing the client, making sure they are a part of the client journey all the way through, and cranking up the referral engine. Think of them as the sales whisperers, fine-tuning every aspect of your sales machine to perfection.

Marketing Oriented CROs

Then, you’ve got the Marketing Oriented CROs. These guys take a step back and look at the big picture. They’re all about getting your branding and messaging out there in a congruent manner, increasing visibility with every marketing campaign, better identifying your Total Addressable Market (TAM) and grabbing a bigger slice of the market pie. They’re the ones crafting customer-centric messaging that resonates with your audience and then making sure that message flows seamlessly from marketing to sales to operations. Plus, they’ve got this whole data-driven approach that helps them make informed decisions every step of the way. They also tend to help make sure you’ve got the correct tech stack to handle as much of the process seamlessly. This is one reason why Invictus CMO invests so heavily in AI skills as a Fractional CRO.

Ultimate Focus is on Revenue

Ultimately, fractional CROs play a pivotal role in devising and executing revenue-generating strategies tailored to the unique needs of each client they serve with a focus on making revenue for the business while taking excellent care of the customers in order to capitalize on customer retention.  From analyzing market trends to optimizing sales processes, they leverage their expertise to identify growth opportunities and drive sustainable results. Additionally, Fractional CROs often serve as valuable mentors and advisors, imparting their knowledge to internal teams and fostering a culture of continuous improvement.

 

How Much Does a Fractional CRO Cost?

 

While the benefits of hiring a Fractional CRO are undeniable, one question looms large for many business leaders: How much does it cost? The cost of engaging a Fractional CRO can vary depending on factors such as scope of work, level of experience, and duration of engagement. Some Fractional CROs may opt for CRO equity compensation arrangements, aligning their incentives with the long-term success of the business.  You can expect to pay a fractional CRO between $9,000 and $15,000 a month which is a steal when you consider the number of roles they are filling for your company. Typically, a fractional CRO will want a minimum of 3 months, but more likely a 6 month contract in order to have enough time to make a positive impact on your business.

 

What is the Average Tenure of a CRO?

Understanding the average tenure of a CRO can provide valuable insights into their effectiveness and impact on an organization. While tenure may vary across industries and companies, studies suggest that the average tenure of a CRO typically ranges is between 1.5 and 2.2 years.  Yes, that’s a short period of time. That’s why the CRO positions are often called “the ejection seat.”  The reason for this short tenure is typically two fold.

1) They are heavily headhunted. As they tend to be the lifeblood of the business with their multi-talented abilities, CROs are in high demand.  When you lose a full-time CRO, plan on it taking about 6 months to bring on a new one—which is another reason why someone might need to hire a fractional CRO, as interim.

2) The other reason why tenure is so short is because they tend to be promoted to higher up positions in the C-suite world, again, due to their multi-faceted talents.

It’s important that you take very good care of a good CRO because losing a CRO could derail fundraising rounds as VCs get cold feet. The CRO position tends to be a high stress position as well as they are always under heavy pressure to set high revenue goals.

 

What is a Fractional CEO?

 

Now that we’ve covered a great deal of the fractional CRO, let’s address who they typically report to, which is the CEO.  And yes, there is a fractional position for that as well. In addition to Fractional CROs, the concept of Fractional CEOs has also gained prominence in recent years. Fractional CEOs offer small and midsize businesses access to seasoned leadership on a part-time or interim basis, enabling them to tap into executive-level expertise without the commitment of a full-time hire.  CEO salaries are increasing 11% this past  year and are expected to continue to do so, making the fractional route an attractive one.

 

How Much Do Fractional CEOs Make?

 

The compensation for Fractional CEOs can vary depending on factors such as industry, company size, and scope of responsibilities and most of all, it will depend on the experience and expertise of the fractional CEO. While hourly rates and project-based fees are common, some Fractional CEOs may negotiate equity stakes or performance-based bonuses as part of their compensation package.  Typically the range for a fractional CEO is  on a monthly basis and ranges between $10,000 and $20,000 for a few hours a week of work.

 

What is a Fractional CFO?

 

Much like Fractional CROs and CEOs, Fractional CFOs provide specialized financial expertise to support the growth and sustainability of small and midsize businesses. A lot of time, fractional CFOs tend to get confused by those hiring them with the role of a fractional CROs, but they are two separate positions and nothing alike.  Fractional CFOs are seasoned professionals who offer strategic guidance on financial planning, budgeting, and risk management, helping companies navigate complex financial landscapes with confidence.  A good fractional CFO will go the extra mile and be concerned about other issues such as sales tax compliance and unclaimed property compliance for the business.

 

Is a Fractional CFO Worth It?

The decision to engage a Fractional CFO hinges on various factors, including the company’s stage of growth, financial objectives, and budget constraints. But it’s also important to take into consideration the expertise and experience of the fractional CFO.  If you don’t have a fractional CFO who’s willing to do the essentials AND ensure that you’re in compliance with sales tax requirements and unclaimed property compliance, then get a different fractional CFO!  One thing I’ve learned from my fractional CFO relationships is that a fractional CFO should NOT be your first hire.  Instead, you should be spending the collateral on a position that will bring in more collateral so that of a fractional CMO or CRO would be ideal.

The Fractional CFO Salary

While Fractional CFOs can command competitive hourly rates or salaries, their expertise often yields substantial returns on investment through improved financial performance and strategic decision-making. It’s also important to note that protecting a company from a sales tax compliance audit by being on top of things is worth its weight in gold. The fractional CFO hourly rate is typically $200-$300 an hour.  But most have a fractional CFO on a salary basis which is charged monthly as a retainer of $5000 and $14,500 a month depending on the number of hours they are willing to allocate towards your project each month.  Typically, it’s simple to monetize the value of the fractional CFO cost as they have a direct impact on the bottom line.

 

What is Fractional Customer Success?

A fractional Customer Success is an executive that nurtures the customer relationship. However, a well-seasoned fractional CRO can take the place of a fractional customer success executive. (Remember, three roles in one—Fractional CMO, fractional VP of sales, and fractional customer success) This role can’t be ignored, however.  In today’s customer-centric business environment, the role of Fractional Customer Success professionals is more critical than ever. It’s more expensive to get new business than it is to nurture and keep the customers you already have and to upsell them and get referrals from them. These customer-centric experts specialize in cultivating strong client relationships, driving customer satisfaction, and maximizing retention rates. By implementing deliberate tailored strategies and leveraging data-driven insights, Fractional Customer Success professionals help businesses achieve sustainable growth and long-term success.

 

So… How did we do in answering all of your questions?

 

The concept of Fractional CROs represents a compelling opportunity for small and midsize businesses seeking to accelerate their revenue growth. By harnessing the expertise of seasoned executives on a part-time or interim basis, companies can access strategic guidance and drive meaningful results without the overhead costs associated with full-time hires. Whether it’s optimizing sales processes, maximizing customer success, or enhancing financial performance, Fractional CROs offer a flexible and cost-effective solution for unlocking business potential.  Just be sure that you’re getting your money’s worth when selecting a great fractional CRO. Make sure they have excellent sales and marketing experience as well as the ability to focus on the customer’s satisfaction.

At Invictus CMO we have that for you and we’d be delighted to talk to you further. Why not schedule a Flash Focus call with us so that we can get to know your needs better and discover the best way for us to help you achieve your revenue goals?  That’s a preliminary focused and high level 15-20-minute meeting with CEOs to highlight their main challenges. No selling. Just solutions.