Fractional Head of Growth vs Agency vs In-House

How a $2M–$20M ecommerce brand should choose between fractional leadership, an agency, and building in-house, based on the real constraint, not the revenue number.

Updated on: 2026-09-15

Most brands in this range ask the wrong first question. They ask "should we hire someone, keep the agency, or bring it in-house?" when the useful question is "what is actually stopping growth right now?" If you answer that first, the model chooses itself.

Here is the short version. For a $2M–$20M ecommerce brand, the strongest default is rarely one model exclusively. At $2M–$5M, fractional leadership or a short advisory engagement plus agency execution usually wins. At $5M–$10M, a hybrid works best: an internal owner, senior fractional leadership, and agencies for specialist channels. At $10M–$20M, building internal leadership starts to make sense while you keep agencies for specialist and technical work. The revenue band is a hint, not a decision.

What each option actually is

These three things are not the same kind of purchase, and treating them as interchangeable is where a lot of money gets wasted.

A fractional Head of Growth is a part-time senior operator who directs the growth function without becoming a permanent employee. You are buying commercial priorities, target-setting, budget allocation, agency and team direction, a decision cadence, and accountability. You are not buying a media buyer or a creative department.

An agency is an external team providing execution, strategy, or both, usually on a retainer. You are buying specialist capacity, tools, and access to multiple channel experts quickly. You are not automatically buying a company-wide growth owner who answers for contribution margin and cash.

In-house means employees who work only for your brand. You are buying dedicated attention, institutional knowledge, and long-term capability. What you are not buying is broad expertise from a single hire. One person cannot cover paid media, lifecycle, creative, CRO, analytics, and strategy at an expert level, and pretending they can is one of the more expensive mistakes I see at this stage.

The important part: fractional leadership and agency execution are complementary, not substitutes. A fractional Head of Growth might manage your agency, replace a weak one, or decide the agency was never the real constraint.

The one diagnosis that decides everything

Before comparing costs, work out whether you have a strategy gap or an execution gap.

You have a leadership and integration gap when:

• revenue is climbing but contribution profit or cash is not
• several agencies and specialists are busy, and nobody owns the whole plan
• channel dashboards say one thing and finance says another
• budget changes are reactive instead of rule-based
• the founder is still the default escalation point for every decision
• acquisition and retention teams optimise separate, unconnected targets
• you genuinely do not know whether to fire the agency, hire internally, or change strategy

That is where a fractional Head of Growth earns its fee. The value is connecting economics, measurement, channels, conversion, retention, and execution under one accountable person.

You have an execution gap when the strategy and targets are already clear and you simply need hands: paid media operators, email builds, creative production, technical SEO, CRO work. That is an agency or specialist decision, and adding senior leadership on top of a clear plan is overpaying for direction you already have.

If you cannot tell which gap you have, that uncertainty is itself the answer. A short diagnostic engagement before you commit budget usually pays for itself by stopping you from hiring the wrong thing.

Side-by-side comparison

One row deserves emphasis. The in-house ramp is real. A vendor-published ecommerce estimate puts senior hiring at one to three months, onboarding at another one to two, and full productivity at four to six (Gosh Digital's agency vs in-house comparison). Treat that as directional rather than a benchmark, but plan for months, not weeks.

The cost comparison people get wrong

The comparison is almost never "fractional fee versus one salary." That framing makes in-house look cheap because it quietly assumes one hire covers everything. It does not.

The honest comparison is: fractional leadership plus execution resources, versus agency fees, versus the fully loaded cost of the internal capability you actually need. That internal capability, for a growing brand, usually means senior direction, paid acquisition, creative production, lifecycle, analytics, CRO, and promotional coordination. Hiring one marketer is cheaper than hiring all of those, and it also leaves you a single point of failure.

Public pricing is inconsistent and mostly published by people selling one of these models, so use it for budgeting, not as a market rate.

• Fractional leadership: commonly cited around $5,000–$20,000 per month, with broader estimates from roughly $3,000 to $50,000 depending on scope and seniority (GTM8020's fractional growth guide). The range is wide because "fractional" covers everything from light advising to active leadership with execution attached.
• Agency: one ecommerce comparison estimates typical retainers at $3,000–$10,000 per month, or roughly $36,000–$120,000 a year, before creative volume, extra channels, or international markets push it up.
• In-house: the same source estimates a three-to-four-person internal team at $200,000–$500,000 a year in salary alone, before benefits, tools, and management time.

Then run the fee against your revenue. At a $2M brand, a $10,000 monthly engagement is about 6% of annual revenue before you spend a cent on media. At a $20M brand, that same fee is 0.6%. The identical engagement can be reckless for one company and immaterial for another, which is exactly why revenue band alone should never make this call. Your available gross profit and contribution margin should.

What fits each revenue stage

$2M–$5M

Fractional leadership or a time-boxed advisory engagement, plus agency or contractor execution, is usually the right shape here. You often have meaningful spend and a few vendors, but no reliable contribution-margin targets, no clear definition of profitable acquisition, and nobody senior who can push back on an agency.

A full in-house department is usually premature. The agency-only risk is that the agency optimises its assigned channel while nobody owns the commercial outcome. The fractional risk is the mirror image: you buy strategy and then starve it of execution or authority. Give the leader access, decision rights, and at least one execution partner.

$5M–$10M

Hybrid is the honest answer. You can usually justify an internal growth manager, senior fractional leadership during a transition, internal ownership of customer knowledge and merchandising, and agencies for channels that are not yet economical to staff. Margins, geography, and channel mix matter more than the exact revenue figure, so treat the $5M line as a signal, not a switch.

$10M–$20M

The case for permanent internal leadership gets stronger, especially when growth decisions require daily coordination with inventory, pricing, product, and finance. You might build internal lifecycle, creative, and analytics, and keep agencies for specialist projects, international expansion, or technical SEO. A fractional leader still fits when you are between executives or entering a new phase and want a senior operator before committing to a permanent hire.

How to actually choose

Run this in order.

1. Find the economic ceiling. Contribution margin, cash requirements, payback, and the new-customer CAC you can genuinely afford. If you do not know these numbers, that is your first project regardless of model.
2. Name the constraint. Leadership, execution, measurement, conversion, retention, creative, channel, or capacity. Be specific.
3. Pick the lightest model that solves it. Execution gap goes to an agency or specialist. Integration and accountability gap goes to a fractional Head of Growth. Durable daily capability gap goes in-house. Uncertain diagnosis gets a short advisory engagement first.
4. Default to hybrid when you are between stages, which most $5M–$15M brands are.
5. Write down ownership. Goals, budgets, decision rights, reporting metrics, account access, handover, and termination terms. Every model fails without an internal owner. Fractional leaders need authority and a responsive team. Agencies need a capable client-side decision-maker. In-house teams need management and prioritisation.

If you are evaluating an agency specifically, test whether they can work against your real economics, not just platform ROAS. Ask about account team seniority, who owns creative testing, their attribution method, how they treat new versus returning customers, whether they report on contribution margin or payback, cancellation terms, data ownership, and examples from brands with comparable economics rather than comparable revenue.

Where Miguel website fits in this decision

The Miguel website offer is built for exactly the $2M–$20M brand described above, and it sits deliberately in the integration-and-accountability slot rather than the execution slot. Miguel Casteleiro's model centres on contribution margin, new-customer CAC or cost per purchase, payback, LTV, MER, channel ROAS, and cash, instead of a bigger dashboard. Seven years leading a performance agency, work across roughly 130 brands, and management of meaningful annual media spend sit behind that.

Two formats map onto the diagnosis above. The three-month Growth Advisory keeps your existing leader, team, and agencies in place while it diagnoses constraints, sets targets and priorities, evaluates capability, builds a practical growth plan, and installs a review rhythm. That is the right call when you suspect a strategy gap but want to confirm it before restructuring anything. The Fractional Head of Growth format takes direct responsibility for the whole growth function, directing agencies and internal specialists, owning goals and budgets, running weekly reviews, and training the team.

The approach page is explicit that agencies and specialists are not replaced by default, and that Miguel does not position himself as the routine operator of every ad account. That is the tell that this is senior orchestration, not another execution vendor stacked on top of the ones you already have. For a brand whose numbers are messy and whose teams are pulling in different directions, that is the layer that has been missing. For a brand that already has clear targets and just needs more hands, an agency is the cheaper honest answer, and a good advisor will tell you that in the discovery call rather than sell you leadership you do not need.

One practical constraint worth knowing: the engagement is capped at five companies at a time, which supports the hands-on positioning but also means availability is limited. Pricing is set per engagement rather than published.

FAQ

Is a fractional Head of Growth cheaper than an agency?

Sometimes, but that is the wrong comparison. A fractional leader and an agency solve different problems. The leader owns commercial decisions and direction; the agency executes. Many brands end up paying for both, with the fractional leader managing the agency. Compare each against the constraint it solves, not against each other on price alone.

At what revenue should we hire an in-house Head of Growth?

There is no clean threshold. The signal is not revenue, it is whether growth decisions need daily coordination with inventory, pricing, product, and operations, and whether you can fund and manage a real team rather than one overloaded generalist. Plenty of $15M brands still run better with fractional leadership plus agencies, and some $6M brands with unusual complexity justify an internal head early.

Can a fractional Head of Growth replace our agency?

They can, but that is not the point of the role. A good fractional leader first works out whether the agency is the constraint at all. Often it is not. The problem is more commonly the absence of clear targets, an operating rhythm, and someone accountable for the whole plan, and fixing that makes a competent agency perform far better without replacing it.

What if we do not know whether our problem is strategy or execution?

Then buy diagnosis before you buy a model. A short advisory engagement that identifies the real constraint costs far less than hiring the wrong team, and it stops you spending twelve months optimising channels while the underlying business problem sits untouched.

Further reading

• Agency vs In-House Marketing Team for eCommerce
• Fractional growth marketers for ecommerce brands
• Miguel website: engagement models and approach