How Fractional CMOs Are Reshaping Business Strategy

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0:37Check it out at dtm.world slash certification. That's dtm.world slash certification.

0:54Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Chance. My guest today is Mike Volkan. He is a serial entrepreneur, speaker, marketing consultant, fractional chief marketing officer, Army veteran, and author of seven books. In addition, he has built and sold six of his own companies. And as a marketing leader, he specializes in helping businesses scale, particularly ones that help people, animals, and or the environment. So lots to unpack there. Welcome to the show, Mike. Yeah, thanks very much. It sounds like I have a productive life, but it's not that exciting sometimes.

1:30But yeah. So let's talk a little bit about, I'm going to ask you about the chief marketing officer role because the fractional CMO role is something I want to focus on. But tell me a little bit about the experience of building and selling six companies. I'm sure there's a whole lot of people that you consult with that would like to do that as well. Yeah. I think that what makes me a more complete marketer is being able to do something like that. But I've always been that kind of guy that's had ideas in my head. and I'm never short of execution. So, you know, I give things a try. I see what they stick.

2:01Some of them don't. I said I built and sold six companies. Doesn't mean I've only started six companies. A lot of them, like, I get to the finish line. I spent, one time I spent over 60 ,000 bringing a company to the starting lines where I was going to launch it. And I didn't like the looks of it. I never launched it. You know, sometimes that happens, but sometimes it works out and you get to build a value, which is really fun. And you get to find buyers and then sell them off for a good chunk of money. So tell me also a little bit about other than it's a nice way to kind of have a niche? People, animals, and the environment.

2:32Yeah. You list as a specific focus. Yeah. I've listed, I've worked with a lot of companies, put it that way, over, I'd say at least 600 by now over my 20 plus year career, either doing strategy work from a marketing perspective or doing marketing leadership work. But, you know, I've, over all that experience, I've learned that the companies that I'm most passionate about working with are companies that help people, animals, or the environment. It's not to say I don't like working with other companies. I like a lot of different types of industries and business models, but the ones that I most enjoy working with are ones that actually help people, animals, or the environment.

3:06So that's kind of my niche that I've developed. Yeah. So, so I guess that's another way of saying you won't work with companies that hurt people, animals, and the environment, right? That's right. You know, I was contacted the other day about, you know, from a company that does beef jerky and I'm, you know what, I'm a vegetarian. I don't want to help you sell beef jerky. So I kind of turned them down, but I told them the reason why. So yeah. Yeah. Over a long time ago, I had a cigarette company actually contact me. I was kind of the same way. Yeah. It was a big company too. It was tempting, but yeah.

3:35Yeah. As a marketer, you can put your foot down because you're going to help these companies grow and develop the culture. And you kind of got to be passionate a little bit about the service or the product that they're offering, you know? Yeah, absolutely. So I started in your intro, I talked about the idea that you're a fractional chief marketing officer, a CMO. So if somebody comes to you, like they've read your bio and they say, Mike, what is that fractional chief marketing officer thing? How do you kind of neatly define that? Yeah, it's a tough one. The way I usually say it is that I work with companies that can't afford or don't have the ability to obtain a full-time chief marketing officer, which is often sometimes 300 ,000 plus a year.

4:13So I'm able to segment my day into six parts, so to speak. And one company gets one of those parts. and I can work with four to six companies at any given time. Yeah. And to your point too, I think there's a lot of companies that just don't need a full-time. That's true. Right. I mean, they need strategic input. They need somebody that's guiding them, but that person doesn't have to sit at a desk all day. I know. Yeah. I know a lot of times I talk myself out of a job because a company will just need me when they go to market to create the strategy, get some marketing processes going, and then they fire me or have me train a mid-level marketer to do what I executed and set up.

4:49Yeah. You've been doing this for a while as have I. Have you seen a change in the marketplace for accepting that idea? We have leaned into the positioning a lot harder the last few years, even though we've always been doing it because it seems like small, mid-sized businesses not only get the need for strategy, but I think the whole fractional employee, if you will, has really caught on. Yeah. It's been steadily growing ever since I've been doing it for the last 10 years. In fact, when I was first doing it, I was calling it a part-time CMO because the word fractional isn't even around. And then COVID hit and then everybody got used to doing remote work and freelance work started getting really popular, even though it was popular beforehand.

5:29And now kind of fractional CMO is just kind of a name, name stake. I mean, it's not just CMO work, it's fractional executive work, C levels of all types. So it's just, yeah, yeah. Yeah. The fractional CFO, I think has probably been around longer than any other role because a lot of organizations, they need somebody to do their taxes, do their bookkeeping, but they also need a little strategic advice on that, but rarely need a CFO. What I've seen a lot in the last couple of years also is a lot of organizations, I think, let's keep blaming stuff on the pandemic, why don't we, kind of got caught without a strategy.

6:07The market was good, they rose with the market, and they realized, we don't have any way to stand out in the market or a way to differentiate ourselves with our customers. So it seems like there's hunger for this thing that we call strategy now. Have you seen that as well? Yeah, absolutely. In fact, a lot of people, obviously, companies went under or had struggled with the pandemic. But my business was great. As a fractional CMO, companies came to me saying, hey, either one, we never paid attention to marketing before. And now is our chance to kind of retool and start to strategize. And the other part is, let's get creative.

6:41Let's hire you to help me get creative. And let's do something out of the box here. So I had some fun projects during COVID and worked with companies I probably never would have normally. So actually, I don't want to say I enjoyed the pandemic because that's not good to say. But from a fractional CMO standpoint, it was pretty beneficial for me. Yeah. And I think that will continue. You also had a lot of CMOs jump out of companies and decide they didn't want to work for them anymore. And so I think there's more people hanging the fractional shingle out there, if you will. Yeah. Yeah. Would you say there's a I don't know if it's size or industry, but would you say that there are companies that get to a certain point that need this role maybe more than others?

7:21I would say every size company needs a fractional CMO, but there's certainly companies that are pre-revenue or probably the ones that most needed are the ones that didn't think they needed a marketing senior marketing leader. They got the market and like, wait, our sales aren't really what is expected. And are there the product market fit really isn't there. Let's hire somebody senior to figure out what's going on. Because a lot of entrepreneurs, as you know, have big goals. They'll come to me time and time again saying we got a billion dollar idea and this is going to be massive and take equity in the company and this and that.

7:54But it rarely works out like that. Right. Not everybody's a unicorn or they wouldn't be called unicorns. But, you know, even larger companies, I've worked with larger companies. It's not common, but they might say, you know, our marketing director needs a fresh look at things or we need you to keep tabs on our managers or something. So from a larger company perspective, I'm more into the project management and consulting from an advice standpoint. From a smaller to midsize company, I come in as a fractional CMO with a strategy perspective to develop something and some strategy and some processes in the company.

8:27So my roles are varied depending on the size of the company. Yeah. You know, another type of company that I've seen over the years quite often is that company that is very founder sales driven. They grew nicely, 10, 15,$20 million company, but they plateaued because they don't have that senior team at all or senior marketing person. And I think this fractional CMO is very attractive to them as well, because they may be ready for a CMO. But typically the founder has no idea what to tell the CMO to do or if they're doing a good job. So I think that doesn't that hold them back sometimes? It's like, I'm not going to hire that senior marketing person because I don't know what I don't get marketing.

9:10That's the typical way a company grows, right? So they go to market. They have a very tight budget. it. You know, they do the lean business model thing and they hire the minimum that they need to get a lot done. People wear a lot of hats. They might even have a marketing department with nobody actually specifically dedicated to marketing with any specific marketing skills. And then they realize they need a strategy. So that's my sweet spot. When I have a company that has data coming in, they have customers, they have, you know, things that I can look at and grab onto to create a strategy. And then that's when things really start to take off.

9:38When they have processes, they know who they need to hire or need to upskill and they really need my services at that point. So generally my sweet spot is somewhere around 250 ,000 in revenue to 3 million in revenue is when companies decide I want to scale, but I don't have the team to do it or the strategy. Yeah. Yeah. And even in that range that you mentioned, I mean, you have different problems at$2 million than you did at 250 ,000 probably as well. And so if you've never dealt with those problems, even having an outside perspective is pretty important, isn't it? It's always important. One of the key freelancers that I hire for a lot of my projects or my clients that I work with are the marketers because marketing is so fast.

10:17It's not back in the 60s. It was like, here's the yellow pages and let's get listed. And that was marketing. Now it's like, and even lately, it's like you got to be on top of these AI programs and what they're doing and their capabilities. It's all these different specialties in marketing. I mean, there's hundreds of them. You can niche down to anything now. Hey, marketing agency owners, you know, I can teach you the keys to doubling your business in just 90 days or your money back. Sound interesting? All you have to do is license our three-step process that's going to allow you to make your competitors irrelevant, charge a premium for your services and scale, perhaps without adding overhead.

10:54And here's the best part. You can license this entire system for your agency by simply participating in an upcoming agency certification intensive. Look, why create the wheel? Use a set of tools that took us over 20 years to create, and you can have them today. Check it out at dtm.world slash certification. That's dtm.world slash certification. So if somebody asks you to come in and, you know, it's like a typical thing, we need marketing or we need marketing help. We're not really sure, like our website's not I mean, it's always like some little tactic thing, right? Yeah. And, you know, you've been doing this for 10 minutes.

11:35You realize, no, that they have a whole strategic problem. Where do you focus or how do you get them to realize? Because nobody ever wakes up and says, I need strategy. Better go buy some strategy, right? So how do you get them to realize that all their problems link back to being a strategic problem? Yeah, that's a really good question. So probably the most popular thing that I do when I first come into a company is I give them an audit. I just go through not just marketing, but every piece of data I can get a hold of. You know, even if they give me financial statements, P &Ls, whatever, I'll look at everything I can to get an overall glimpse of how data is coming into the company, how it comes out of the company.

12:09And then I'll look at the resources and especially the staff. You know, I wrote a book called The Business Success Formula, and it's literally a formula on how to create business success. And the most heavily weighted element of that formula is the staff. it's 50 % more valuable or heavily weighted than any other formula. It's part of the formula. But typically what happens is I'll give an audit. And then the thing about clients is they come to you and they don't know what they need. They don't know what they don't know. So they might come to you with a problem and say, Hey, we need strategy. And I'll say, wait, you're not ready to scale yet.

12:42You don't need a strategy. You need to fix some stuff first. So I go in and I tell them, usually there's a clear communication problem with the way they're portraying their products or their service on their website. It's not hitting right. It's not resonating. Conversion rates are low. Bounce rates are high. All those key performance indicators that indicate that you're just not ready yet to scale. You need to refine some things. So typically what I do is I start with their website and their marketing materials and I refine the messaging. That usually alone gives them a good 15, 20 % boost in revenue and conversions right off the bat because a lot of companies don't really think too hard about that kind of stuff until they realize there's a plateau.

13:18Yeah. Their message is here's what we do. Here's what we sell. Right. And then also the testing is really big too. I mean, that's how Uber and these companies that just exploded to a billion dollar valuation, they just tested every little minutia of their company. So AB testing is big too. I'll ask them, you know, what have you tried for your calls to action? What have you tried for your different menu options on your pricing plans? And they just don't, they just threw stuff up. They never really did any research on their pricing and they just thought, you know, that's the price. It's going to be a hundred dollars a month, but they never really did any research or surveys or anything.

13:47So there's that element. Yeah. Or worse yet, we find a lot of people just like, well, this is what everybody charges in, you know, in our market. So we'll just be on it. Yeah, exactly. Yeah. So, all right. You mentioned, you know, here's when I talk to people that that decide to be fractional CMOs, one of the real challenges to the business model is you're really just selling your time. I mean, or that can be one of the challenges is, you know, Now, you've mentioned there are six companies that get a six to me. I mean, you may be highly paid for your time, but how do you scale a business like that?

14:23Or is it in your mind not really possible? Well, to a certain point, the way I scale it is I have I'm not an agency, but I have a close knit group of freelancers, depending on the skill set that I keep near and dear to my heart that I know do good work and deliver good value. And I don't need a quote unquote babysit them too much. Like I know if I give them a task with very little effort or instructions, they're going to complete it. So I have about 20 to 30 of those people in my pocket. So when I create a strategy, I tell the team, listen, if you don't have anybody on staff that can do this, I have people on staff.

14:53Now, I have my fee, my hourly fee. But if you want me to manage them and work with them to deliver the product, like I will charge more for that. So that's the way I scale it is I'll either upcharge the freelancers that I recommend just because I'm working with them and I'm managing them. So other than the hourly fee, I also charge that. And I also make a good amount of money from referrals, too. Like if I can't, I don't fit every client that wants me to work with them. So I'll say, listen, I know someone I used to work with. He's great. Give him a call. He's going to work with your company. And then I'll take a 10 % cut or whatever from that freelancer I refer to.

15:26Yeah. One of the things that we've been teaching for years is a repeatable system. As you mentioned, a lot of times people, they've had no strategic direction. So they don't really need a CMO. They need what a CMO would have developed for them. And then obviously somebody to orchestrate the implementation as you do. One of the things that I've found is, and a lot of people shoot me for this comment, but 80 % of the companies out there need about 80 % of the same thing. And so I believe that there is a way to actually build a repeatable system for strategy development and then teach it to account manager level folks rather than somebody that's got 25 years of experience.

16:04Does that sound like heresy to you? No, because you're actually speaking my language. This week, I'm actually launching a business where it's going to be the first ever AI generated marketing strategy. So I've been working on it for quite some time, but it's literally gives a company and it's just for marketing agencies. I'm not rolling it out to everybody. So a marketing agency would come. They answer 16 or so questions about their clients and it would spit out a three month marketing strategy for them based on the answers. So, you know, not to plug myself, but it's called your marketing expert dot AI and it's going to be launched this Friday.

16:35So I've been working on it for a long time. So yes, I do think that strategy is repeatable. However, even albeit my AI marketing strategy, it's not going to get you 100 % there. There's little nuances about every company and culture and the experience of the staff. AI can't do no matter how good AI is going to get. You need to be able to get in there that last 10 % and customize it. Yeah, yeah. I've been, obviously, all marketers are talking about AI today. And, you know, I tell people, I think the best that you can expect from it right now is it's just an informed assistant. It can do a lot of the legwork for you can do a lot of research for you can give you ideas to expand your thinking.

17:16But in the end, like you said, the first 10 % and the last 10 % are all you. Yeah, it's certainly not replacing anything, but it certainly does help in the potential there for something more, you know, more development. And obviously, ChatGPT 4 is awesome. But I think a lot of clients that come to me thinking that AI could solve their problems. And it's really just more of a helpful tool to save money. It does cut down some of my time. Like if I need to copyright a script or something real quick, I'll throw it in the ChatGPT before I hire a writer. And I'll hire the writer, look at it, and review it type of thing.

17:48So it has certainly built some important processes in some businesses. But it's certainly not replacing anything, at least just yet. But it certainly will in the near future. One of my favorite content uses is, you know, you write a really great, you know, piece of content and then just let AI turn it into 18 formats. That's right. So the writing's good. The writing is yours. It's original. It's on point, you know, but then it takes that and gives you all the uses cut up. Yeah. Talk a little bit about, you mentioned this early on, that you end up, because of your background, you're able to actually kind of put your spin on some areas that people would think, well, that's outside of marketing.

18:25I, you know, I tell people all the time, I think everything a business does is marketing, you know, how they send out their invoices, you know, they're hiring. I mean, their people obviously are, you know, are going to be a part of marketing or part of the brand, you know, like it or not. How aggressively do you just say, hey, we have to look at all these areas or is it really a, because it can be, you know, it can be a really big rabbit hole to go down to sometimes for folks. But how important for you is it to address kind of the whole, you know, ecosystem of the business and how it impacts marketing?

18:55Yeah, that's a good question. So typically, I mean, there's no less than three dozen different types of inbound marketing tactics and outbound, right? So you can't do them all at once or you're going to be spread too thin. So you have to look from a CMO standpoint, you have to look at the budget and also the resources. Like you can have a huge budget, but have no staff really to be able to execute it. So you have to balance that in with the strategy work you're doing. But typically what I like to do is I like to have two, maybe three different marketing channels that a company is going to perfect where they can say, I put in$10 ,000 in this marketing strategy and I got$40 ,000 ROI.

19:29Once you can do that repeatedly, then we move on to a different channel. And depending on your skills of your staff, it depends what channel we select. You know, I mean, if nobody likes to speak in front of a camera, I'm not going to be selecting a YouTube strategy for you, right? So, you know, that's the kind of artwork that I don't think AI is ever going to be able to pick up, but that I come in as a CMO and I have to look at from both size to say, okay, do we have the staff and resources? And then what channel do we pick based on that? So that's the way I usually approach that. And I don't usually have them do more than three different types of inbound marketing at once.

20:00So what about some of the areas that fall outside of that? So, I mean, we've all seen this, you know, you're generating leads, they're converting leads, and then, you know, service drops the ball and they're going out the back door. You know, it's like, oh, it's marketing's old. We're not growing. How do you stay disconnected, or do you, from that area that maybe isn't seen as marketing? Well, marketing, that's a good question. Marketing and sales is always almost presented as one in the same for a company, especially if it's a sales-led company. But honestly, before I ever launched a marketing campaign, I used to not, but now I do.

20:36I always look at the sales process. I'll look at the sales conversions, and this guy isn't cutting it, or this team isn't cutting it or they're doing the wrong thing on the calls to the clients. But ultimately, you have to be able to, your scope of work, when you outline what needs to be done with the client, it has to clearly outline what marketing is and what sales is. Like, I just had a client the other day who wants me to hop on some sales calls. And I'm like, I've never done that in my entire life. That's not what marketing is. You just have to explain to them, this is what marketing is. And this is what sales is.

21:06And it's different with every company. Sales isn't necessarily sales from one company to the next. So in my contract that I send out to my clients, I have a long bulleted list of things that I do. And then I also have a list of things I don't do in regards to sales, like taking phone calls from clients and customers. Yeah, yeah, yeah, yeah. Awesome. Well, Mike, you want to tell, again, I appreciate you taking a few moments to drop by the Duct Tape Marketing Podcast. You want to tell people where they might connect with you and find out more about your work? Yeah, thanks. Always available for speaking gigs, mikevolkin.com, M-I-K-E-V-O-L-K-I-N.com.

21:37And if you're a marketing agency and you want some marketing strategy, my new website, yourmarketingexpert.ai. Awesome. Again, appreciate you stopping by the show. And hopefully we'll run into you one of these days out there on the road, Mike. All right. Thanks so much, John. Talk to you soon. Hey, and one final thing before you go. You know how I talk about marketing strategy, strategy before tactics. Well, sometimes it can be hard to understand where you stand in that. What needs to be done with regard to creating a marketing strategy? So we created a free tool for you. It's called the Marketing Strategy Assessment.

22:09You can find it at marketingassessment.co, not.com,.co. Check out our free marketing assessment and learn where you are with your strategy today. That's just marketingassessment.co. I'd love to chat with you about the results that you get.