Fractional vs. Full-Time CMO For SMEs: Why Your Full-Time CMO Is A Liability

We are a second-generation SME based in the Batu Kawan industrial zone in Penang, Malaysia. Although my father built this company as a manufacturing entity, we are now pivoting ourselves into a direct-to-consumer brand to stay relevant. We’ve been advised to focus on marketing more as our refreshed brand and products are now stabilised. The plan is to hire a full-time Marketing Director or CMO. However, after doing some digging, we understood the high salary of this role is just too expensive. Although we can pay, I personally feel it is unwise to proceed. I feel a little bit of gambling here, as we won’t know for sure the ROI part of it. In short, the numbers just aren't adding up. Furthermore, our industry peers are also experiencing difficulties with growth despite having a full-time CMO. Should we proceed with this, or perhaps are there better options out there?

Having a full-time Marketing Director or CMO is good if you are a large corporation or a large SME. It is natural for a company of those sizes to hire one, pay good money to him or her, build a department, hand them the responsibility and demand growth. But it is unwise to do the same if your company is still growing, whose growth has yet to stabilise. We call this type of SME an emerging company. In your case, it is obvious that you don’t feel good about hiring one on a full-time basis, as it will expose the company to high-risk overhead.

Here’s why.

The high cost of a C-Suite middleman. Did you know that when it comes to marketing tasks, the actual "heavy lifting", as in the media buying, performance marketing part of it, creative production and content distribution, is most likely outsourced to agencies. This leaves your full-time CMO in a redundant, purely administrative position. You are paying a C-suite premium for someone to sit in meetings and "oversee" the vendors who are actually doing the work. It’s rare for them to produce insightful content or to architect integrated marketing systems. In short, they are just highly paid middlemen between those agencies and your boardroom.

If you don’t believe us, simply look out there in the market. When these CMOs leave to start their own firms, they often fail. They have spent so long hiding behind big budgets and external teams that they’ve lost the ground-level strategic instincts required to build a brand from the ground up. In the end, those ROIs you are after won’t be coming your way after all.

Unjustifiable salary vs. actual responsibility. The total cost of ownership for a seasoned Marketing Director or CMO in Malaysia, factoring in basic pay, 11% EPF contributions and other statutory deductions, and performance bonuses, is a staggering line item on any P&L. Yet, when the "work" is executed by an external agency, the internal responsibility shrinks to mere reporting and coordination.

Let us ask you this. Does it make financial sense to pay RM25,000 a month for a marketing leadership with just a minimal task? In a lean company like yours, every Ringgit counts and must be productive. Paying a premium for "leadership" that never truly understands the marketing strategy, its ecosystem of crafts and narrative, is indeed unjustified. In other words, you are paying for the title, not a result.

Buying operations when you actually need the momentum of results. A full-time CMO’s primary instinct is survival, not disruption. This leads to safe, "operational-mode" marketing designed to do two things. One is to market to the CEO and not the customer. And two, to protect their marketing department and justify their headcount. This is where scale goes to die. By not having a full-time CMO, you will be switched from fixed overhead to growth fuel. This is where you will pay for outcomes. Every single Ringgit trapped in an executive’s benefits package is a Ringgit you don’t have to fund growth. We are in the Internet era, in the AI era. Each Ringgit spent on "management" is money wasted.

Big marketing teams are so 90s. Today, with tools and information just clicks away, tasks become super manageable. The big team is no longer a sign of prestige. Right now, all you need is efficiency. With AI, selected marketing tools available out there, templates and checklists, you can get them so cheaply, they will allow a lean team to stay optimised when delivering tasks daily.

Our recommendation is this. Instead of getting your company a full-time CMO, consider hiring a part-time one. It is called Fractional CMO. They can deliver things either at par or far better than their full-time counterpart, only at a fraction of the investment per month. The rate of between RM4,000 to RM6,000 per month is within your reach simply because it is a shared resource. The person might be engaged by a handful of companies for their expertise.

As the Fractional CMO understands the fund limitations versus the ROI intended and timeline given, they will work with the existing marketing team members you have. Usually, the momentum is pretty much faster as the Fractional CMO will have templates and checklists in hand and ready to go.