Fractional CMO, agency or full-time hire: what each one really costs

You've decided your marketing needs someone in charge. There are three ways to get that person, and the price on the proposal is the least useful number for comparing them. What matters is what you get for the money, what you still have to supply yourself and how long it takes before anything happens.

The full-time CMO

A full-time chief marketing officer gives you a senior person who thinks about your business every day. For a company with a marketing team to lead and the budget to feed it, that's the right hire.

The cost goes well beyond the salary:

• The package. A six-figure salary before benefits, bonus and equity.
• The search. Months of recruiting, during which nothing changes.
• The team. A CMO sets direction. Someone still has to write, design, build and run the campaigns, which means more hires or an agency on top.
• The risk. If the hire doesn't work out, you find out late and start again.

For a business doing a few million in revenue, this usually means paying executive rates for a job that doesn't yet need forty hours a week.

The agency

An agency gives you hands: people who make things. Websites, ads, content, social posts. If you already know exactly what you need made, a good agency will make it well.

The hidden cost is direction. Agencies sell what they produce, so the plan you're given tends to need the things they make. An SEO agency finds an SEO problem. A paid media agency finds a paid media problem. Nobody on the account is paid to ask whether you should be doing any of it.

• The retainer, plus project fees for anything outside it.
• Your time. Someone on your side has to brief them, review the work and decide what comes next. If that's you, add your hours to the bill.
• The reports. You'll get plenty. Whether they connect to revenue is another matter.

The fractional CMO

A fractional CMO is a senior marketing leader who works with you part-time. You get the thinking of the full-time hire for the hours you need it.

The catch with most fractional CMOs is the opposite of the agency's: they have the plan and no hands. You get a strategy and a list of people to go and hire.

Here's how we price it, so you have firm numbers for at least one of the three:

• Strategy First, a fixed-fee strategy engagement: $7,500 to $10,000, delivered in 30 to 45 days.
• The retainer: $2,500 to $10,000 a month, depending on how much of the work your own team takes on.

At the top tier our team does the production too, which is how we get around the no-hands problem. See the three tiers.

How to choose

• If you already have a marketing team to lead and the budget to match, hire the full-time CMO.
• If you have a strategy you trust and need things made, hire an agency and manage it closely.
• If you have neither a plan nor a leader, and can't justify an executive salary, a fractional CMO fits. Ask any you talk to two questions: what method do you follow, and who does the work once the plan is written?

Whichever way you go, settle the strategy before anyone starts producing. The most expensive option of all is paying any of the three to execute a plan that was never written down.

Not sure where you stand? The free assessment takes a couple of minutes and shows you which parts of your marketing are holding up.

Frequently asked questions

Stephen Conley

Founder of The fCMO Agency and Gisteo, and a Certified Duct Tape Marketing advisor.

More about Stephen