A Great Chief Marketing Officer Can Make All the Difference. Here's How to Snag One. Hiring a CMO can be tricky for a number of reasons, including that they don't come cheap. Try one of these five strategies.
Opinions expressed by Entrepreneur contributors are their own.
Very few startup founders have backgrounds in marketing. As a result, many new companies hit a wall early on where their ability to promote their companies effectively on their own comes up short. The solution -- at least in theory -- is to bring on a chief marketing officer.
Unfortunately, hiring a CMO (or a growth hacker, marketing director or related position) is tricky for a number of reasons:
- Good marketers aren't cheap. By some estimates, CMOs draw average salaries that are 50 percent higher than the founder's compensation.
- Good marketers must be versatile. Today's marketers must be masters of public relations, branding, blogging, analytics measurement, paid advertising, user experience and the dozens of other disciplines that play a role in proper digital marketing.
- Good marketers must be agile. Things change so fast online that a marketer's skills can become entirely obsolete in under a year. Good CMOs must, therefore, make ongoing education an important part of their workday.
So what do you do if you don't have the deep pockets needed to bring on the best and brightest CMO out there? Give any of the following strategies a try:
1. Offer an equity stake
If you're a young startup without extensive funding, one of the bargaining chips in your back pocket is offering equity in lieu of a higher salary or better benefits.
Certainly, there are some caveats here. Giving out equity stake to every employee you bring on diminishes your potential profits. You might also find that great CMOs want their payment up front and aren't willing to sacrifice for future rewards.
But incorporating equity into your compensation package can be a powerful tool. One great guideline comes from Bill Harris, an early member of PayPal, as shared in a SXSW Interactive session:
"The standard drill is a one-year cliff for new employees after which stock options can begin to vest monthly or annually. Rules of thumb on who gets how many options vary, but executive or early hires can be granted as much as 1 to 2 percent of the total shares of the company."
If that sounds like more than you're willing to give up, this next strategy might be a better fit.
2. Tie compensation to growth
One way to minimize your initial cash outlay without giving up equity is to structure a series of incentives to be granted upon the attainment of specific growth objectives.
As an example, suppose the primary metric your company is concerned with is churn rate. If you're an software-as-a-service provider with a current rate hovering around 15 percent and you want to reach the 5 to 7 percent annual churn deemed "acceptable" by Bessemer Venture Partners, you might offer your CMO a small base salary in addition to the following incentives:
- 12 percent annual churn -- $10,000 bonus
- 10 percent annual churn -- $15,000 bonus
- 7 percent annual churn --- $20,000 bonus
- 5 percent annual churn -- $25,000 bonus
Obviously, you'll need to set the specifics of when bonus performance will be assessed, how success will be measured and what you'll pay out on your own. But one major advantage to this strategy is that candidates who aren't results-oriented and sure of their skills will self-select out of your hiring process, leaving you with the people who will actually do a good job for you.
3. Hire young
Earlier, I mentioned the fact that digital marketing best practices change quickly. So if marketers need to learn a new skill set every year or so, why invest a ton of money into a CMO with decades of experience?
Instead, find somebody who's young, driven and motivated to master new techniques. These candidates won't have many experiences to draw on, but they can be an affordable way to get the marketing assistance you need.
4. Bring on former founders
Another great group of candidates to consider are former startup founders who have moved on from their earlier ventures. Especially if these candidates came from true "bootstrap" environments where they handled all their own marketing and promotions, they'll have a wealth of knowledge on how to get things done quickly, efficiently and frugally.
5. Don't hire a CMO
Of course, if you need marketing help, keep in mind that hiring a CMO isn't your only option. A consulting agency, independent consultant or team of freelancers may be able to provide the assistance you need without the overhead of traditional employees.
If you're interested in going this route, you may find the following Entrepreneur articles helpful:
- Hire a Consultant to Do What You Can't
- MBAs for Hire, By the Hour
- Use Subcontractors to Build Your Business
- Be a Better Client to a Consultant with These 3 Tips
If you've gone through the CMO hiring process and have other tips on finding the right candidate (at the right price), I'd love to hear from you. Share your experiences and recommendations in the comments section below!