What is a CRO? What does a CRO do? As the name implies, the Chief Revenue Officer is responsible for everything related to revenue. This role usually requires them to transcend department boundaries, ensuring that all employees are working towards the same goal.
The CRO is responsible for ensuring that all departments are working together to maximize the company’s revenue growth.
Therefore, a CRO will be heavily involved with the sales and marketing teams as these groups are in charge of generating revenue growth.
Let’s break down what does a CRO do exactly and if the position is necessary for SaaS businesses.
The Chief Revenue Officer
Research suggests that companies with strong alignment between their marketing and sales departments CRO must ensure critical for the CRO to ensure tight collaboration between them.
The importance of having an executive sponsor for sales enablement cannot be overstated.
According to a study, 78% of companies that experience revenue growth year over year have executives who encourage marketing and sales to work together. And 55% of those that experienced a decrease in revenue reported executive support.
As the importance of customer success in generating revenue becomes more widely recognized, it is increasingly likely that it will be included among the responsibilities of the Chief Revenue Officer.
On a typical org chart, the CRO sits right below the CEO. The VP of Sales, Chief Marketing Officer, Chief Financial Officer, and other department heads report directly to them.
As senior executives, they are responsible for the oversight and articulation of the company’s revenue strategy, go-to-market strategy, and execution.
In tough times, companies need to prioritize their sales efforts. Revenue growth has become more important than ever.
The drive for revenue has made the CRO role increasingly popular in recent years.
What exactly does a CRO do and do you need one?
Why Companies Should Consider Hiring a Chief Revenue Officer
As new technology emerges, so do new methods of managing revenue and engaging with clients. Both have become more and more complicated.
A chief revenue officer is an executive who oversees and optimizes the sales and marketing departments.
Why is it important for companies to have a CRO? Because having a CRO ensures that an organization aligns its revenue operations teams, which can lead to faster growth and increased profitability.
Companies with well-aligned sales, marketing, and customer success teams grow 12-15 times faster and are 34% more profitable than those without.
Let’s examine a few common reasons why companies hire CROs.
Technology has changed the way businesses operate. From sales and marketing to customer service and management, there are software systems available for every department.
These platforms are separate, but common pitfalls are that they operate as siloed systems.
CROs try to accomplish two main goals:
- Integrate and align tech tools and systems so that they all work towards the same goal.
- Strategically implement each marketing tool to maximize its potential and return on investment.
The experience your customers have with your brand has never been more important. The brands that provide the best, most positive, and customized experience for their customers are the ones that will succeed in the years to come.
People consider customer experience to be as important as price or product quality. A recent survey found that 86% of people would pay more for a better service.
Companies are putting more emphasis on improving the overall experience customers have with their brand.
To optimize the customer experience, CROs need to manage with a focus on the customer. This will then lead to more new sales, improved customer retention, and increased revenue for the organization.
Aligning marketing and sales efforts is crucial to the success of a business. This is especially the case when it comes to marketing to potential customers.
The benefits of having these two teams work together are numerous.
It’s easy to see how these benefits have a direct impact on company revenue. When you have a dedicated CRO, you have a strong executive who has an objective view of every team.
The CRO’s job is to align everyone in the organization towards the same goals, not to focus on one area.
Creating a culture of collaboration, addressing issues transparently, and keeping the larger organization’s goals in focus are ways managers can get the most out of their teams. This creates a more cohesive organization that is better able to achieve its objectives and drive revenue growth.
To successfully transform your business, optimize your customers’ experience, and align your organization, you need a CRO who can build relationships internally and externally.
As the CRO, it is important to have an extensive amount of experience in multiple areas of a business. This allows you to understand how each function operates and how you can align them in a way that promotes growth.
Additionally, having a strong understanding of revenue operations will allow you to effectively manage any outside partners.
The CRO is the person in charge of keeping all departments in your company on the same page. They do this by working closely with your marketing team, sales team, and customer service team.
As a relationship manager, you can feel confident that your reps are working towards one main goal: increasing revenue.
What Does a Chief Revenue Officer Actually Do?
The ultimate goal of maximizing revenue covers a wide range of tasks, covering everything from customer acquisition to customer retention.
According to Revenue Architects, a typical CRO job description may include:
- Defining ideal buyers and market segments
- Setting revenue-related goals and metrics
- Working with product teams to define offerings
- Optimizing value props and positioning
- Establishing go-to-market models, pricing strategies, and more
Anyone filling the role of Chief Revenue Officer needs strong experience in sales, marketing, and finance.
A CRO needs to be constantly learning, as they’re responsible for the growth of the company. Staying on top of trends, strategies and new products will help a CRO to succeed.
CRO vs. VP of Sales
Many companies have thrived without hiring a CRO. Revenue generation is often a shared responsibility of the Chief Marketing Officer and VP of Sales.
However, having a full-time CRO on the senior team has its advantages.
First, the CRO will typically look at revenue generation with a long-term perspective and is less likely to be side-tracked by going for quick wins.
Sales departments are usually focused on the quarter in front of them and making sure there is enough pipeline to keep the sales rolling in. In contrast, the CRO is focused on understanding how customers interact with a company and its products, and then using that data to improve the customer experience.
The CRO is responsible for revenue generation across the business, not just an individual department. If each of your departments is doing its best to generate revenue, then the company as a whole would be maximizing its ability to generate it.
However, with a CRO, the whole is greater than the sum of the parts.
When departments are working together efficiently, it results in the best revenue outcomes. Having all teams aligned with the same purpose and strategy creates a cohesive unit that is greater than the sum of its parts.
Sales, marketing, and customer success teams traditionally operate in their own silos, with their department heads reporting directly to the CEO.
The Chief Revenue Officer’s role is to provide visibility into every part of the organization and ensure that departments are working together in harmony. This allows the company to take advantage of opportunities and optimize revenue growth.
And companies are starting to realize these many advantages. The Chief Revenue Officer position is no longer just a niche job title in Silicon Valley but is now considered a valuable and essential C-Suite role.
What Makes a Successful CRO?
If you’ve decided it’s time to hire a CRO, you’ll want to make sure you hire the right candidate.
Let’s take a look at a few people who have had success filling a VP of CRO role at different companies. Looking at how they overcame numerous challenges, you can see the type of person you’re looking for.
Before Jim Herbold became CRO at Infer, he was the VP of Sales at Box. He believes that CROs should not be merely one-trick ponies”.
Instead, they must seek out and take the initiative on projects to increase revenue, in whatever industry they may be in.
In the era of big data, it’s imperative to have a deep understanding of analytics, statistics, and benchmark comparisons.
The CRO’s purpose is to align and optimize the entire customer experience to increase revenue.
To do this, always look for friction in the existing system. Ask customers how you can deliver more value next time.
Ask your employees what they would change if they were CEO. This gives me a list of tasks to accomplish, some of which I can complete right away and some of which I can implement later. Over time, you start to see patterns emerge.
At Sprinklr, Luca Lazzaron is the Chief Revenue Officer. Previously, he held sales management positions.
For him, only having people in the right positions can lead to increased revenue.
Build the best possible team by focusing on hiring, developing, retaining, and promoting people. Make sure your playbook is implemented consistently.
By spending a lot of time talking to customers and employees, you can prioritize whatever will have the biggest impact on your revenue goals.
What does a CRO do? The primary role of a Chief Revenue Officer is to align sales, marketing, and other income-generating departments to better identify and capitalize on revenue streams. By working closely together, they can come up with new ways for their business to grow.
Whether you need to add a Chief Revenue Officer or implement new revenue marketing strategies, having a clear goal of improving your revenue will help your business grow and thrive.
The 2022 revenue marketing report shows how sales and marketing teams can better align to drive more sales.
A CRO is a vital part of any business that wants to increase its conversion rate. If you’re considering becoming one, make sure you know what the job entails and what it takes to be successful at it.