A skills gap in the C-suite is no easy thing to fill.
Especially considering how much a c-suite hire costs, the time it takes to find the right person, and the lengthy notice period most senior employees have to serve.
Perhaps that’s why so many businesses are turning to fractional hires in their moments of need. And more specifically, why an increasing number of ecommerce startups are hiring Fractional CMOs and CFOs.
But why Fractional CMOs and CFOs in particular? How do they support ecommerce growth? And is there a place for them in your business?
Why hire a Fractional CFO or CMO?
Employment has changed in the last 20 years.
Not only does the average job only last 2-3 years, but more and more employees work remotely or in a hybrid model.
For many, it’s an unrecognisable work environment - and that’s before introducing them to the rising trend of fractional employees.
Businesses who make a fractional hire are looking for quick access to industry expertise within budget.
How that expertise gets used depends on the needs of the business. Those needs also dictate the role they hire for.
But there is overlap in why a business would make these business critical hires.
A Fractional CFO or CMO is usually brought in for three months or more which gives them enough time to execute on a specific project, build the foundation for future success, and then transition the business to carry on without them.
How Fractional CFOs are being used in ecommerce businesses
Most ecommerce startups will use a Fractional CFO to support business growth.
That comes from strategising the company’s financial future and correcting current processes, both of which lay the foundation for future success.
Laying the foundation for short-term and long-term financial success
A Fractional CFO serves as a financial visionary.
They come with a strategic mindset and can forecast the best use of capital to grow the business efficiently, quickly, and sustainably.
Scaling ecommerce founders rely on Fractional CFOs to come in, assess the current financials and create short-term and long-term financial plans.
These plans will help inform business decisions going forward such as:
- budget allocation
- pricing models
- market opportunities
- customer segments
- product development
But a CFO does more than look toward the future, they also fix pre-existing financial issues in your business.
What Fractional CFO success can look like
Hyphen, a global expertise group bringing together leading organisations and first-class experts needed someone to come in and build a finance stack that would help them function better and collect relevant data to grow the business.
That’s why they brought in Fractional CFO, Daniel Walter.
“Daniel understood our needs from the onset and helped us throughout our journey - from building a highly flexible Finance Stack by creatively integrating a number of well built out Finance tools, to customising the way these tools interacted and were setup to really fit our needs.
The results that we were able to achieve with him over a period of just 6 months meant that we now have the ability to comfortably scale our business knowing our Finance system is fit for purpose - at least for the next 18-24 months."
Avinash Nandakumar, Co-Founder Hyphen
How Fractional CMOs are being used in ecommerce businesses
Ecommerce startups use the expertise of Fractional CMOs to fuel business growth without having to pay a full time c-suite salary - a salary which according to PayScale is around $176,139 a year.
The other options?
Hire a junior-mid level marketer who’s hard working but lacks experience.
Or invest in a full-time CMO who has a solid strategy but not the budget or personnel needed to action it.
Fractional CMO Paddy O’Neil has seen it happen before.
“To avoid choosing between an executional gap or a strategic gap, eCommerce businesses are turning to a Fractional CMO model. This way they can access the senior skills required without breaking the bank on a full-time CMO’s salary.
The right Fractional CMO will help a business to build a scalable growth engine from the ground up, helping founders to avoid costly mistakes early on.”
Paddy O’Neil, Fractional CMO
Let’s imagine you take Paddy’s advice and hire a Fractional CMO. What can you expect that hire to do for your ecommerce store?
Fractional CMOs use data to improve customer acquisition, conversion and retention
When it comes to ecommerce marketing, data is king.
It can tell you what:
- language is resonating with your target audience
- creatives are performing well
- pages are converting (and what pages aren’t)
- past purchases a customer made
- search term brought a customer to your site
- products they showed interest in but didn’t purchase
Fractional CMOs know how to collect, analyse and use that data so that your store sells more products to more people. They’ll also help you figure out how to sell to those same customers again and again.
What Fractional CMO success can look like
Krepling is a no-code composable platform built for ecommerce. Their founders went to market with an MVP of their product and refined it as they went.
Through referrals and word of mouth they gained traction in their market but growth was limited without a marketing budget to hire full-time marketers or deploy a broader growth strategy.
They did, however, have enough budget to bring in a Fractional CMO. With Paddy O’Neil on their team they were able to refine their value proposition and messaging, build out a growth strategy and take their product to a wider market using external suppliers.
Without a single full time marketing hire, Krepling has been able to:
- Grow user base by 35% MoM, for the last 6 months
- Raise $1m pre-seed from Silicon Valley investors
- Attract significant partnership opportunities (Alibaba for example)
How Fractional CFOs and CMOs set you up for funding success
If an ecommerce startup fails to secure capital, it’s likely the business will fail too.
So it’s crucial that each member of the exec team lends their strengths and does all they can to make their next fundraising round a success.
Fractional CFOs and CMOs are an integral part of making that funding number as big as it can be.
The Fractional CFOs role in securing capital
Everything a fractional CFO does helps prepare your business for raising capital.
Healthy financials are fundamental when demonstrating value to investment firms.
But you can’t go to potential investors with numbers alone. You need to put them into context.
Fractional CFOs like Daniel Walter will take those numbers and help you create a compelling narrative that communicates to investors the business’s potential for accelerated growth.
"When it comes time to raise funding you have to use and present numbers in a creative way. They have to tell a convincing story to your funding partner.
You want investors to understand the underlying drivers, as well as the market opportunity that comes from them. A fractional CFO has the knowledge and experience to tell that story in a convincing and engaging way."
Daniel Walter, Fractional CFO
The Fractional CMOs role in securing capital
A strong marketing function is able to test, learn, and iterate quickly to find the best ways to drive paying customers to your store.
Securing ecommerce funding comes down to proving you can sell and that there’s market appetite for your product(s).
By exploring markets, improving website conversions, and ramping up sales the Fractional CMO can help you wow investors.
They can also strengthen your brand so that you gain greater market recognition. It could be a PR feature or a viral social media campaign but whatever it is, it turns your brand into a household name, at least in the households that matter.
Should you hire a fractional CFO/CMO?
A Fractional CFO or CMO is a great option for ambitious ecommerce startups who want to build the foundations for hyper-growth.
Especially if they’re in need of the skill set but can’t afford a full-time hire or don’t have the time to go through a lengthy hiring process.
If you’re still not sure whether it’s the right move for your business, take guidance from Raffi Salama, Co-Founder of PassionFruit - a business connecting businesses with vetted marketing freelancers.
"When it comes to full time employee vs freelance, the core question you need to ask yourself is: will this person still be the right fit given our probable priorities in 6-9 months time?
A full time employee is going to take you 3 months to find, and 3 months for them to ramp. So someone you start looking for as a FTE today needs to be the person you'll still need 2-3 quarters away. Otherwise, test, experiment, stay agile and use world-class freelance talent to fill your more immediate needs."
Raffi Salama, PassionFruit Co-Founder
The role of Uncapped in taking the impact of your fractional hire further
While fractional hires aren’t as big of a financial commitment as their full-time counterparts, they still come at a price.
A Fractional CFO, for example, will cost up to $10,000 a month with the average monthly fee landing between $5,000-$7,000 for small-mid size businesses.
They’re worth the cost but it’s still an expense. One that Uncapped can help you cover and turn into a better return on investment.
If your Fractional CFO and CMO has the financial resources to action their strategies, set up the right processes, and bring in the best tools for your business to grow, their impact on the business will be even greater.
Get in contact to find out how Uncapped can help your ecommerce store scale with, or without, a Fractional hire onboard.