Fractional CMOs vs. Agencies vs. Contractors: What’s the Difference? (+ Hiring Costs)
You're joining a new co; early stage startup. And you don't quite have your team or structure nailed yet.
Or... you're inheriting a team that may be a little junior and green around the ears. The CEO has set aggressive goals for the first 90 days and you want to make sure you hit the ground running.
Rubber meets the road. You need to deliver.
The bad news? It's going to be rough.
The good news is that you don't have to do it alone.
When it comes to fractional/part-time help for marketing, there are many options. And with the recent economic downturn, many marketers are striking out on their own & going down the self-employment route.
But...here's the kicker: many marketing leaders I talk to aren't sure where to start or what they can expect to pay.
The following are general ballparks based on my experience of being or working with folks across the spectrum. There are some similarities, but there are also some differences.
Let's start with the 'not-so-new' kid on the block.
The Fractional CMO/Advisor
First, I'd advise to be wary of anyone calling themselves a fractional CMO. I've come across too many people who were content marketing managers at a startup who now bill themselves as fractional CMOs.
It sounds better than calling yourself a freelancer. But a true 'fractional' CMO must actually be qualified enough to be a CMO (for the business you are trying to hire them for).
Fractional CMOS are the new 'trend'; buyers beware.
Ironically, most actually good CMOS who end up doing fractional work don't call themselves fractional CMOs; they bill themselves as advisors.
So what is an advisor / fCMO, and when do you need to hire one? In a nutshell, if you need more hands-off, 1 call a week plus high-level strategy and team structure help. Advisors are great at advising but typically won't be hands-on with keyboard execution.
Advisors can help answer questions like:
- What should my GTM strategy be?
- Who is my next hire?
- How can I build a marketing strategy to go upmarket?
- What is the right time to start a field marketing program?
- How can I expand into a new market?
- How can I launch this new product line without cannibalizing my existing product line?
- What's the best structure for my team?
- How can I measure marketing performance & team?
Advisors also help with unblocking founders and marketing leaders. They act like sounding boards and help you think through more challenging high-level problems foundational to your org. Like Amazon likes to call them, these are one-way doors. Typically, these are strategic decisions involving a lot of investment and are difficult to reverse (or, sometimes, quite impossible).
Typical cost/investment in a fractional CMO: It varies since there's such a variety of folks billing themselves as advisors or fractional CMOS. But ~ $300/hr for advisory work is the average. If this sounds high - it's because these are highly experienced folks who can probably help more in an hour (if you ask the right questions) than you fumbling your way through the dark.
Typically, engagements with advisors only last for a short term. They come and solve your problems in theory, and it is up to you and your team to deliver. If you want someone who's a bit more hands-on, then you need a consultant.
The Consultant
Unlike fractional CMOs who come with a breadth of experience, consultants are more hands-on but also focused on specific areas of marketing. While consultants are less strategic, broadly speaking, they can help you with specialized areas like revenue operations, demand generation, content, or product marketing.
A great consultant is a mix of strategic & hands-on. As a demand generation consultant, you'd find me advising companies on their GTM strategy or marketing mix while also working with the team to build marketing programs, align with business goals & help shape the strategy and execution.
Hiring the right type of consultants is important because consultants can be specific to a specific business area. And hiring someone who doesn't have the domain expertise to fix your problem is an expensive mistake. Let's not consider the damage they might wreck on your marketing program by the time they are done.
If you have a content marketing problem, hire a content marketing consultant (as opposed to a 'marketing consultant').
Typical cost/investment in a consultant: Consultants' rates can vary widely depending on their expertise and the complexity of their tasks. You should expect to pay anywhere from $150 to $250 per hour.
A consultant is ideal if you have a team in-house but need help improving efficiency or expertise in a particular business area. Unlike fCMOs or advisors, consultants aren't entirely hands-off; they balance execution and strategy.
The Full-Service Marketing Agency
((good)) Agencies combine the strategic input of consultants with a wide variety of skills and operational talent. Agencies are ideal when you need to solve complex problems with minimal oversight.
Agencies excel at bringing together different expertise and orchestrating them for effective solutions. They...
- Figure out the problem (why is my revenue down this Q compared to last)
- Come up with a solution (because we didn't invest enough in top of the funnel three months ago)
- Deliver against the solution (we should diversify our marketing mix & measure our average sales cycle so we can invest before we need revenue to mature) with minimal oversight.
They help your organization do more.
Self Plug: 42 Agency helps B2B companies with RevOps / Demand Generation and Creative. We help our clients across the spectrum of these services because Demand Gen. needs Creative + Content (Paid / SEO / Affiliate / Organic / Field), a robust measurement infrastructure (RevOps) and Full Funnel Marketing to work.
Typical cost/investment in a full-service marketing agency: Good agencies start at 10K+ (monthly retainer), but I've also seen many terrible agencies charge 15-20K without delivering meaningful work or results. Many agencies will charge % of spend (on the paid side), but I prefer charging a flat retainer and a variable cost for creatives on top.
The Contractor
Contractors are similar to freelancers but often work on a longer-term basis. They can fill specific roles within your marketing team, bringing specialized skills for the duration of a project or a set period.
Contractors more closely work with your team, typically not working across multiple clients (like freelancers) but being "in-house' without being on payroll (which can have tax benefits).
Typical cost/Investment in a contractor: Contractor rates are typically hourly (billed at longer-term contracts) or fixed-term contract-based. Rates can range from $80 to $130 per hour. All this depends on the gap you are looking to fill and the skill level of the contractor.
Now, what if you want someone for the short-term or to work on projects/tasks every now and then. Enter the freelancer.
The Freelancer
Freelancers are a flexible option for businesses looking for support in specific areas without the need to sign a contract. You hire them to work on a task, once they are done with that task, they are off.
You can always hire them again. But they aren't like contractors who are in-house staff without the benefits.
A common task most companies hire freelancer help for is to support their SEO team with writing or any content marketing tasks. This happens because, for the most part, it's very easy to scope out a chunk of work, i.e., write about topic X vs. trying to provide them context on the whole business.
Freelancers are ideal for short-term projects or augmenting your team's capabilities without the commitment of an FT hire when you need less strategic insights and more manpower to execute against a specific scope.
Freelancers typically need more hand-holding to get into a working rhythm. Finally, also remember that freelancers will stick closely to the scope of work, so you must be clear about your expectations for them to meet them.
Typical cost/investment in a freelancer: Freelancer rates are generally project-based or hourly. I've seen rates ranging from $50 to $200 per hour.
Which One Should You Choose?
As with most things in marketing, there isn't a one-size-fits-all type of answer to building your dream team and meeting your goals. An excellent place to start is to consider how much runway and velocity you need to deliver.
And from there, plan accordingly.
Agencies typically are the ones who deliver faster for strategic + executive type of work; freelancers are the best for very specialized and defined tasks; fractional CMOs and consultants are typically the best at helping you even understand the challenge you're facing.
And contractors are like having an in-house employee and may take some time to ramp up but are a lot more helpful when it comes to long-term execution.
What you may need also changes according to how mature your org is, the type of product you sell, the existing talent on your team, etc.
Earlier-stage companies may do better with a mix of contractors and freelancers, while more mature companies may do best with an agency.
Whatever it is, we hope this piece brings a bit more clarity.
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