In our work as Sales Outsourcers, one C-Level Title that we work with is the Chief Revenue Officer. Why does this title exist? Shouldn’t the SVP of Sales, the CEO or a business GM be ensuring that the company is making money?
Businesses of all sizes are driven by the impetus to achieve and maintain a steady revenue stream. And while it may seem counterintuitive, most businesses are not structured in a way that ensures a predictable revenue stream. There are many revenue generating processes that need be monitored: for example, billing processes, customer fulfillment success, timely revenue recognition. But one main source of revenue processes that can work against a predictable revenue stream is the makeup of sales and marketing departments that generally work in isolated bubbles, interacting only when absolutely necessary. Such a territorial approach in both sales and marketing often fosters unproductivity, and most importantly a loss in the line of sight of the main goal: revenue growth.
Enter the Chief Revenue Officer (CRO). The CRO has been, until recently, a role seen mostly in start-ups and smaller businesses to keep an eye on the bottom line while the rest of the C-Level team grew key partnerships, looked for growth opportunities or sourced funding. But now bigger businesses that are past the initial growth hurdle are viewing the CRO role as an essential, longer-term role, the key to aligning departments company-wide in a concerted effort to raise revenue. Consider the following companies that have recently added the CRO to bolster revenue performance: SolarCity, L.A. Times, Altisource, and Marin Software.
The CRO role boasts many responsibilities that have potential to directly and positively impact a business’s revenue stream for all activities that generate revenue:
- Pricing Strategies: product prices should reflect perceived market value to the extent that they generate the highest return.
- Sales Performance: sales strategies and tactics strive to sell product to the most valuable segment of the market with a goal to generate the most revenue possible.
- Advertising/Marketing Effectiveness: expenses for marketing and promotion activities are revisited and refined consistently to generate the highest ROI.
- Distribution Efficiency: all channels of distribution are consistently evaluated and refined to identify and develop channels that offer the most profitable means of distribution.
While the above highlight the primary responsibilities of a CRO, there are certain qualities that indicate how successful a CRO might be in their role. Consider the following traits as benchmarks for an effective CRO:
- Constant communicator: the CRO communicates the revenue strategy company-wide, with a special focus on marketing and sales efforts, to ensure all teams are aligned in strategy and execution for the greatest revenue attainment.
- Reliant on data and metrics: a numbers guy (or gal), the CRO holds teams accountable by exhibiting fluency in data and tying performance to established metrics that determine sales and marketing success.
- Seasoned mediator: the model CRO is an objective go-between for marketing and sales teams, understanding both differences and similarities inherent in the two roles. The CRO bridges the gap between the two functionalities, ensuring they serve their unique purpose while coordinating with each other to ensure the company realizes a full revenue cycle.
- Results orientated: the CRO focuses on both long and short term results. Here the CRO ties in the short term perspective that many sales departments work in (driving quarterly results, prospecting, closing deals), as well as the long term programs through which marketing often operates.
The CRO is a role that draws from attributes that are already prevalent in the various departments found within most companies. However, it is only when these key elements are extracted from the likes of sales and marketing folk and amalgamated into one supreme role, does a company realize the full extent of revenue generation and overall growth. In our world, the function the CRO holds is to mostly optimize the sales revenue chain. Perhaps it’s time your company considered getting the most out of its business by bringing on a Chief Revenue Officer, not just for sales optimization but to govern and optimize all revenue generating processes.
We’d love to hear your opinions on the role of the CRO. Feel free to connect with us on Social Media.
If you are interested in learning more about our work with CROs, please contact us.
Photo Credit: Tony J Case