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Value Creation Blog

4 Reasons That Rent A CMO Makes Sense - Enterprise Value

Posted by Josh Patrick

Rent A CMOMost small, privately held businesses spend a great deal of their time working on bringing new sales into their business.  These companies know that without sales their business will shrivel up and die.

When we talk with them about their business they often tell me that they have a sales and marketing department which is often one or two people.  Whenever I hear that a sales and marketing department exist in a company I assume they have a sales person or two and no one is paying attention to marketing.

It’s important to understand that sales is an activity.  Marketing is developing the strategy that sales will use to add business.  They are separate activities and in most cases the same person can’t do both.

I believe that with many small businesses it would make sense to rent a CMO (chief marketing officer).  This person can help you identify the niches your business should pursue and what strategy would have a high probability of success.  Here are some reasons I think it makes sense to rent a CMO.

  • Your business is not big enough to afford a full time marketing person.  Renting a CMO can be a cost effective manner to acquire a good sales strategy to grow your company.
  • Renting a CMO can allow you to keep your marketing fresh.  When you rent a CMO you have the opportunity to see if they’re any good.  Having them work on a month to month basis allows you the ability to let them go if they can’t deliver.
  • Renting a CMO allows you to change focus as your business changes.  You might start working with a CMO on niche development and then move into an inbound marketing campaign.  It’s unlikely that your CMO can do both.
  • You can buy better talent on a rental basis than a permanent one.  Renting a CMO allows you to pay a $100,000 person $10,000 to $20,000 for their service.  Since your CMO would be part time you would only pay for what you use.  If they are full time on your staff, you most likely wouldn’t be able to implement everything they come up with.

I’m a big fan of renting people who would occupy the “C” suite.  In most smaller private companies there just isn’t the need for a full time CEO, CFO, CIO or CMO.  Renting allows you to get better talent at an affordable price.

As always, I’m interested in your thoughts.

Josh Patrick

 

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Topics: wealth management, enterprise value, Rent a C