Chief revenue officers (CROs) seem to be everywhere these days. Since Forbes dubbed the chief revenue officer a “CEO’s secret weapon” nearly a decade ago, the role has exploded in popularity.
According to industry analysts at Ventana, almost one-quarter of organisations will establish a chief revenue officer role by 2023. Businesses are realising that to stay agile, strategic, and most importantly, sustainable, they need a CRO who can fold marketing, sales, and customer success into one seamless revenue machine.
“In the last seven or eight years, we’ve seen a real emphasis on the chief revenue officer,” said Michael Maoz, Senior Vice President of Innovation Strategy at Salesforce. “They’re able to pinpoint how organisations can strategically move themselves into a very successful future.”
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What does a chief revenue officer do exactly?
Great question. It’s an evolving discussion that comes up with our customers every day. A CRO leads the revenue-generating processes across your entire organisation. They see how all departments can drive revenue for the company; those departments can include sales, marketing, customer success, and finance. The CRO leverages cross-functional knowledge to create a complete view of the customer lifecycle from bringing in new leads to closing deals to renewing customer contracts.
“What we learned from recent research is that ‘growth’ has a different definition than it did 10 years ago,” said Karen Semone, Vice President of Innovation Strategy at Salesforce. “Growth isn’t just describing the financial valuation of a business anymore. It’s a broader term, inclusive of growing talent, market share, brand relevance. The evolving role of the CRO considers this more holistic definition of growth.”
Alignment is the name of the game, as CROs break down silos to gain full visibility into every part of the business. With a birds-eye view of all revenue activities, they’re able to identify new sales channels, uncover untapped markets, and take advantage of other previously unknown revenue opportunities. They’re able to scale operations to maximise revenue.
Although the CRO often has a background in sales, the role should not be confused with the vice president of sales. It’s a big job with plenty of responsibility. Although the tasks may vary day to day, they might look something like this:
- Establishing a go-to-market strategy and defining revenue goals/metrics
- Recruiting, retaining, and training the best talent
- Diving deep into data analysis with revenue, pipelines, and forecasts
- Acquiring and deploying the right sales tools for efficiency and effectiveness
- Fostering senior-level client relationships and influencing deal structure
- Incorporating customer feedback into the product development cycle
Having one person who’s accountable for alignment among all the revenue-related departments pays off. According to Forrester, companies that aligned people, processes, and technology across their sales and marketing teams achieved 36% more revenue growth and up to 28% more profitability.
Why are chief revenue officers surging in popularity?
Short answer: the past two years.
In many ways, the pandemic showed the urgent need for organisations to possess agility, resilience, and an unshakeable long-term mindset. Silos evaporated as sales, marketing, and customer success had to come together as one to make decisions that would ensure survival.
Add to that, the C-level title is a great way to recruit talent in an escalating war for the best sellers. The Great Resignation is a real thing, and rewarding go-to-market vice presidents (VPs) with an expanded role is a great way to get people in the door and keep them there.
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Will chief revenue officers replace the head of sales?
So will CROs be coming for heads of sales’ jobs? Will heads of sales go the way of switchboard operators and become extinct? Not exactly.
“The VP of sales could still have a place in the revenue ecosystem. If we think of the CRO as being responsible for the entire go-to-market team and not just sales, it would make sense that your VP-level people from sales, marketing, and customer success would roll up to this CRO, who’s driving this overall strategy,” explains Asia Corbett, Head of Revenue and Community Operations at Revgenius, an online community for sales, marketing, rev-ops, and customer success professionals.
Sometimes the way heads of sales might be incentivised — quarterly sprints — can run counter to what’s best for the long-term health of the company. The CRO helps to maintain a marathon mindset without getting distracted by quick wins.
“The head of sales, their life is a hard life. They’ve got to make sure they’re on target for the quarter and then another quarter and another, so you might call their job more tactical,” Michael says. “But companies need to think across three years, five years, 10 years, a generation. So they bring in a chief revenue officer. This individual is freed up from what I’ll call ‘short termism.’ They can really get the big picture.”
Another differentiator between the two: their perspectives around recurring revenue. Renewals and retention are a CRO’s bread and butter. After all, closing new deals doesn’t matter if those customers churn out a year later.
To put it plainly, heads of sales win games, while CROs build a championship legacy. A mix of traditional and new, chief revenue officers are really chief “readiness” officers who prime your organisation for success at scale. By playing the long game, the CRO cements a seamless customer journey and a predictable future for sales organisations.