By Dan Steiner
The median salary for a Chief Marketing Officer (CMO) is reported to be $169,066 per year. That’s an expense that very few startups can afford. Some entrepreneurs try to hire key personnel with less experience in order to reduce costs, but even then, you’re looking at an $80,000 salary to hire a CMO with limited product marketing experience.
As someone that works closely with entrepreneurs and startups every day, I highly recommend that you avoid spending more than $30,000 – $50,000 per year on any one individual, at least until your startup has some serious market traction.
For startups, if something can go wrong, it will. You need every spare penny to fund your runway, as money in the bank is the safety net that keeps Monday’s accident from becoming Friday’s out of business sign.
Consider a Strategic Partnership to Share the Burden and the Rewards
If you can’t afford to pay the salary of a CMO, the next logical step is to give up equity. Unfortunately, there are many, many reasons that partnerships just don’t work. When you enter into a partnership, you’re entering into a corporate marriage. And if things go wrong, you aren’t just sleeping on the couch, you might end up sleeping on the street.
I recommend a strategic partnership instead. With a strategic partnership, both parties retain full ownership of their individual brand. A common arrangement that I’ve seen work well is when two parties work together under a contract that splits revenue from a product or service.
For example, a founder can maintain full ownership of their product and brand. And a talented marketer will offer their services under a contract that entitles them to a quarterly commission on sales they help to generate.
If things go sideways, both parties can simply terminate the contract. But, this isn’t likely, because both parties are incentivized to help move product and grow market share.
I’ll be honest, most CMOs aren’t open to this idea, unless they like to gamble and potentially win big if a product is a real hit. But, there are marketing firms that will agree to this type of arrangement. They will take the salary hit for a quality CMO while your startup gains access to an experienced marketing team often resulting in a win-win.
Guerrilla Marketing is Still Effective
When entrepreneurs get innovative, both customers and shareholders win. If you decide to enter into a strategic partnership with a marketing firm, or an experienced CMO, you’ll find that marketing a product is just as challenging as developing it.
Grabbing market share on a shoestring budget requires out-of-the-box thinking. Guerilla marketing is the art of getting your message out there without spending money on expensive advertising. Free media is a beautiful thing and there are plenty of examples of viral stories.
For example, a Minnesota insurance salesman decided to get out of his office and start doing good deeds around town. After paying for someone’s expired meter, the salesman left a note that read “I paid your parking meter. Imagine what else I’m willing to do to protect your car.” A business card was attached. The story went viral after someone posted a picture of his note on the internet and the free media this act of generosity generated only cost the insurance salesman a few quarters, but his blatantly promotional good deed paid off.
Work with an experienced CMO to brainstorm effective marketing strategies, both inside and outside of the box. You’ll want to zero in on ideas that generate goodwill, put your brand in a positive light, and have the potential to generate maximum sales with minimum up-front investment of time and money.
Lean on Expert Advice Networks
If you’re struggling to find a CMO that’s willing to enter into a strategic partnership, there’s always a CMO willing to charge you a consulting fee for a few hours of their time. Professional advice networks connect curious entrepreneurs with experienced experts ready to provide guidance for a pretty penny.
Do you have $10,000 sitting around? If so, Dallas Maverick’s Owner and Investor, Mark Cuban is willing to take your 1-hour call. Many CMOs are willing to give you an hour of their time for far less, if you’re willing to fairly compensate them for their time and experience.
You don’t have to sign a partnership agreement, employment contract, or enter into a strategic partnership to get great advice and insights. It all comes down to the best fit for your startup.
So, what are you waiting for? Start searching for available solutions that give you the information you need to find your CMO, at a price that won’t break the bank. Read up on how to integrate marketers into your boardroom. The CMO Marketers in the Boardroom paper reveals the value that marketers will add to your company when they participate at the highest level.