When it comes to marketing, there are three things that you always have to pay for.
- You pay for strategy – Someone has ideas of what your company should do and why.
- You pay for the labor of creative work – That means design, managing ads, all the reporting and “stuff” that goes into marketing.
- You pay for your platform – If you want to run Google ads, you need people to run the tech. If you want to be on social media, you have to have someone who understands it.
The biggest of these three, though, is strategy. How do I know? Because it’s hard to figure out how to get from point A to point B. You probably know this if you’re a firm owner and are in charge of your own strategy. Where do you even start? Are you going to go out and find individual freelancers? Are you assigning marketing tasks to your team?
The most common solution in this case is to go with a third party. There are two places to go for that strategy component if you’re not handling it in-house.
Hire an agency.
An agency has a team of people. They have an approach for their marketing. Typically, they have a strategist already on their team. That means they can help you determine what you should do with your marketing. The strategy piece is already taken care of.
Hire a fractional CMO.
This is an option that’s mostly used by larger firms. For a range, let’s say that 5 million annual revenue is the minimum number if you’re going to go hire a fractional CMO. These folks come in from the outside. They’re going to give you strategy, but what they WILL NOT do is any execution. As always, there are pros and cons of both. Let’s see what we mean.
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The pros and cons of using a marketing agency
We’ve talked about this a little, but with an agency, you get strategy PLUS execution. They can tell you what to do, and they’ll also do that stuff for you. The downside is that as an agency owner, and we speak from experience here, part of what they’re hoping you do is that you hire them to do ALL the things. It’s how they stay profitable.
That means that some of the strategy or advice they might tell you is directly correlated to the services they offer. If you’re depending on an agency that specializes in SEO, well, guess what? They’re likely going to recommend SEO strategies. If you work with someone who is stronger in social media, they’ll probably have a robust strategy for your socials. If you have someone who loves email… you get the idea. That means it’ll sort of always come back to the question of who owns the strategy in terms of figuring out what is the best ROI for what you could be doing.
The pros and cons of a fractional CMO
Well, a fractional CMO doesn’t sell services, so they’re probably going to have an unbiased perspective on where you should spend your money. That’s invaluable, especially if they seem to have a firm grasp on many different areas of marketing. Now, the downside to that is that you’re now tasked with going out and finding people who can fulfill that work.
A CMO will help you manage your budget from a more unbiased point of view because they get paid whether it works or not. Their role is purely strategic, with maybe a bit of leadership and oversight thrown in. In general, this cost adds up. It tends to be more expensive to pay a fractional CMO on top of the other things you’re doing.
That said, if you have a big budget, you’re probably spending a lot of money in different areas and it might be really beneficial to have a person like that. If you DO NOT have a big budget, which for just a fractional cmo is probably going to be around 200k in salary, you can do it for a lot less.
In conclusion, agencies are great one-stop shops. Fractional CMOs offer a bespoke experience at a bespoke price
If we have to sum it up…
Going the agency route gets you strategy plus implementation. The downside is that it’s possible you’re being sold things you don’t need because of their specialty.
In a fractional CMO you get pure strategy without implementation. You get an unbiased opinion, but you’re payin for it. PLUS, you’ll still have to pay people to implement their ideas.
Which is right for your firm? It depends on what you need! If you feel like you’ve always wasted money on marketing, or you feel like you’re easily sold on a great idea that never seems to pan out, you might be better off investing more time and money into working with someone who’s more of a pure strategist and isn’t going to be as focused on the implementation.