As the captain of a company’s marketing efforts, the CMO role has many responsibilities, including overseeing a marketing team. Choosing and hiring a CMO involves selecting someone with the knowledge and skills to succeed. Setting an appropriate salary and benefits package is not easy for most companies.
While traditional, less senior marketing roles often have their pay tied to salaries for similar positions in the area, a CMO’s salary can vary greatly. Location does have an impact, but other factors often play a more significant part in deciding on compensation for a CMO.
This article, from the nation’s top CMO recruiters, discusses a chief marketing officer’s typical responsibilities and various aspects of their compensation package.
The CMO has direct responsibility for the overall marketing strategy of an organization. This includes the administration, planning, development, and implementation of the company’s marketing and advertising efforts. A CMO is expected to drive increased revenues and sales using effective marketing methods.
When designing a marketing strategy, the CMO uses research, pricing, and marketing communications to reach new customers who may be interested in a company’s products and services. Their role may sometimes blend with that of a CRO, as they may oversee the sales team and customer retention.
CMOs must have significant experience in marketing practices, online and social media advertising, new business development, and customer service. If they oversee sales, a CMO functions as the sales lead and guides customer account managers.
In today’s tech-driven world, CMOs must also have mastered the metrics that enable them to track the effectiveness of their marketing campaigns and sales strategies.
As a member of the C-suite, a CMO should have specific soft skills that enable them to communicate well with their team, other members of the executive leadership committee, and the board of directors. Common traits that a CMO possesses include:
A CMO can’t be influential if they don’t enjoy marketing and advertising. Effective marketing strategies involve telling a story that resonates with a company’s customers. Developing a compelling story takes effort and creativity. Molding the story into a marketing campaign that works can be challenging.
CMOs must have a strong knowledge of advertising methods and must know how to apply the product’s story in a way that potential customers can relate to.
The performance of a CMO isn’t rated internally but externally by the company’s customers. Therefore, a CMO should consider with each decision what the customers will think. Every day should be devoted to retaining customers or reaching new ones.
A CMO must anticipate customer needs and expectations and design an appropriate customer service strategy.
Metrics allow CMOs to measure the effectiveness of their advertising, sales, and customer service strategies. Applying metrics to the marketing team helps a CMO determine what works and what doesn’t.
A strong understanding of the technology and processes that will develop an efficient set of metrics assists the CMO in making good decisions to drive the company’s success.
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A CMO’s compensation typically includes a combination of base salary, bonuses, and equity options.
The base salary consists of the regular paycheck received by a CMO regardless of performance. The amount is established based on certain factors, including location, company size, and the extent of responsibilities that fall on the CMO’s shoulders.
Public companies and those with revenues over $100M typically pay their CMOs the most. According to Payscale, the average CMO base salary is $174,603.
When hiring a CMO, the board of directors or executive leadership team often sets specific goals they want to achieve over the next few quarters or years. If the goals are met, the CMO obtains a bonus.
Not all companies choose to provide their CMOs with potential bonuses, but those looking for specific performance from their marketing executive will.
Bonuses can vary significantly. Smaller companies may only be able to afford small bonus incentives for their CMOs, while larger companies with encompassing goals will reward their CMOs handsomely for achieving them. According to Payscale, bonuses and commissions vary from $13K to $150K.
Public companies, or those planning to go public in the future, often grant their CMOs stock options or equity incentives. Stock and equity options have certain conditions that must be met before the CMO can redeem them.
Standard stock options given to a CMO include a certain percentage of ownership in the company or restricted stock units. Payscale found that the average value of equity options awarded to a CMO varies from $2K to $70K.
When defining the appropriate compensation package for a new CMO, a company should consider a variety of factors, including:
If there are specific goals that the company wants the CMO to work toward, a combination of a higher salary and bonus should be used. A lofty bonus encourages a new CMO to strive toward the company’s goals with every action. Once a goal is achieved, new ones should be established to promote continued growth.
The size of the company, its revenues, and the number of products it offers play a significant role in CMO compensation. Newer startups likely don’t have the cash flow available to bring on highly paid CMOs. A public Fortune 500 company will.
Companies with a wide variety of products should establish a higher salary for CMOs because they’ll have to design effective marketing pipelines for each product.
The location of the company can dictate the base salary. A CMO based in rural West Virginia won’t be able to command as much salary as someone in San Francisco or New York. CMOs outside a central metropolitan area may earn half as much as those in large cities.
The CMO plays a vital role in the success of a company. Their efforts often dictate whether revenues grow or decline and whether customers stay or go.
Choosing a CMO should not be a short process. Care should be taken to find someone who has the skills and experience necessary to bring the right tools to the marketing department.
When the appropriate match is found, a fair compensation package will encourage the CMO to stay on for the long term and drive them to meet specific company goals.
The experienced marketing executive recruiters at Cowen Partners have a long-standing reputation for excellence when it comes to connecting companies with the brightest marketing minds in their industry. We are up to date on the latest marketing trends, strategies, best practices, and technologies, and we take exceptional care while applying deep expertise to identify the best candidates for our clients’ needs.
That is why the marketing executive headhunters at Cowen Partners are the partners who leaders trust and rely on for their marketing and demand generation recruitment needs. It is also why Cowen Partners is one of the top marketing recruitment agencies in the U.S.
Clients, spanning every industry, are typically $10 million+ in revenue. Successful placements include the entire C-Suite, as well as director-level positions, including (but not exclusive to):
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