Do you know what a Chief Revenue Officer is, and what her or his major responsibilities are?
Just like the name sounds, a Chief Revenue Officer is responsible for all revenue generation processes in an organization. In this role, a CRO is responsible for creating integration and alignment between all revenue-related functions, including marketing, sales, customer support, pricing, and revenue management.
In VentureBeat, Jim Herbold, CRO of Infer, described what his job is: “As a CRO, no matter how broad or limited your reach may be in a company, you still need to close deals and build lasting and profitable customer relationships… You’ll lose your job if targets are not met. Hustling deals is job #1.”
Herbold explained: “Some CROs act more like a COO. For example, while I spend a lot of my time on 1) sales deals and issues, 2) marketing and the demand funnel, and 3) customer success and renewals, I also spend fluctuating amounts of time with product, business operations, finance, sales operations, business development, and people ops. Many of us are operators with a strong deck of experience scaling revenue ops.”
Why Do You Need to Hire a CRO?
One of the main reasons you should hire a CRO is to align all the revenue-generating departments. You want to improve lead quality for sales, customer retention, and close ratios by aligning your departments to work in sync. Why?
“A series of radical changes in marketing and sales has been underway for the last decade. While most of these changes empowered buyers as the internet increased competition and transparency, we are now in a period when savvy businesses have new, technology-enabled opportunities to capture buyer interest and out-perform competitors,” stated Jeff Letson of Revenue Refinery.
“The marketing and sales tools and methods which enable this new competitive advantage require businesses to become more sophisticated, internally-aligned, and customer-centric than ever before. Organizations that are ready to adopt these methods will benefit from a period of arbitrage while competitors scale the learning curve,” Letson reported.
Revenue Operations is the name given to the approach to align technology, data, and teams to enhance business growth.
You are no doubt familiar with sales operations and marketing operations roles. In the early days of SaaS, these roles evolved to leverage new technology and data sources for improvements in sales and marketing.
For these roles to function correctly, there needs to be an alignment between sales and marketing, such as a supply of fresh and good leads for sales from the marketing team. The communication between the teams need to be excellent, and an impartial coach can also be useful to make sure both departments are “singing from the same hymn book.”
Letson said, “Revenue Operations’ objective is to drive improved customer experience and company growth by aligning sales, marketing, and customer success around the buyer, rather than around departments. While sales operations and marketing operations roles may still exist in companies with revenue operations teams, RevOps sits above these roles to assure they are fully aligned and leveraged.”
Alignment Leads to Collaborative Growth
When sales and marketing are working hand in glove, they will both grow at the same pace. If sales and marketing are operating in separate silos, this division will diminish their growth, limit the communication in the company, and impair collaboration.
Snapapp.com reported that companies that have adapted to aligning sales and marketing are seeing real bottom line benefits:
- Aligned organizations achieved an average of 32% annual revenue growth while less aligned companies reported an average 7% decline in revenue – Forrester Research
- Organizations with tightly-aligned sales and marketing had 36% higher customer retention rates and achieved 38% higher sales win rates – MarketingProfs
- B2B organizations with tightly aligned sales and marketing operations achieved 24% faster growth and 27% faster profit growth over a three- year period – Sirius Decisions
How does this alignment happen? In companies that have reported improved alignment, the two departments communicate well, share information, and marketing involves sales in content creation so that all messages fit their target customers.
CRO is Critical to Keep Teams on Target
Overseeing these activities is the Chief Revenue Officer, who not only is attending to the details of a smooth alignment but is paying attention to customer retention and success. The company, in turn, becomes more customer-centric. Sometimes the CRO will need to deal with business operations, as Herbold of Infer explained earlier. If you are producing a software product and the competitor has introduced new features that are winning more customers, how long will it take for your product to be upgraded? The CRO needs to know this and needs to be prepared to have answers for his sales force.
Not only is a CRO essential to your business to align sales and marketing, but a good CRO can look at the way your organization sells, and decide to provide faster quotes, for example, or flexible bundles and packages. The CRO can also analyze data to determine how sales can prioritize regions or territories, and what marketing messages need to convey your business’s value.
Salesforce.com emphasized that the role of a good CRO involves building alliances and collaborations. Perhaps your software company can partner with third-parties, such as the company’s vendors or suppliers. Has that been explored? What other partnerships could be created to enhance your company’s success?
Salesforce.com stated, “Creating strong collaboration with other leaders, employees, and stakeholders in the outside world can bring in information that ultimately contributes to stronger, more sustainable revenue. That’s why a chief revenue officer not only takes an interest in what’s going on outside of sales but ensures all the possible valuable dots are connected.”
If you want to grow your business, and make sure that all key departments are functioning well together, then the next step is to hire a Chief Revenue Officer. A CRO who can lead your firm in becoming customer-centric, who communicates well, and who builds a good team environment, will ultimately help to guide your firm to higher profitability and success.
- Check out our Chief Revenue Officer Executive Search Services.
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