As your company expands, growing your revenue becomes increasingly tricky.
First, you’ve probably already tapped into the most effortless revenue streams. But so did your competitors.
Then, there’s the sheer business complexity. A bigger business has to deal with more complex issues. As a result, the number of responsibilities falling on the CEO’s shoulders increases rapidly.
Soon, it’s no longer possible for one person to deal with it all. Business growth always creates the need for specialization.
And one of such “specialists” in the C-suite whose mission is to grow your business is a CRO – Chief Revenue Officer.
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Driving revenue is the #1 challenge of the CRO
As the name suggests, the Chief Revenue Officer handles business revenue. They’re the person overseeing revenue operations.
But while there are a few different things that fall under the revenue operations umbrella, CRO’s #1 aim is to drive revenue growth.
Owning revenue isn’t just about increasing the money flowing in. The key is to keep that increased revenue flow stable and predictable. Predictable revenue is the foundation that allows other executives to create plans that lead to business success.
But, what does driving predictable revenue growth mean? There are several things every Chief Revenue Officer has to take care of. Before we get to their key task, let’s look at the bigger picture — the three key CRO roles:
The 3 pillars of every CRO’s work
There are plenty of skills every CRO has to have, but they all fall under one of three key pillars that help CROs drive revenue:
1. Create a revenue strategy
CROs don’t focus on quick revenue wins; that’s the work they leave to the revenue team members. Instead, CROs look at the bigger picture and create a long-term revenue strategy. They then guide teams toward those wins
2. Work with other executives
Creating a strategy is one thing but implementing it is another story. To succeed, CROs must not just be able to find ways to expand revenue. They also need to know how to encourage other executives or board members to approve their plans.
Key executives they work with include the CEO, CMO, VP of Sales, and CFO.
Interestingly, in some ways, the work of a CFO is similar to that of a CRO. However, there are some key differences between a chief executive officer and a chief financial officer. For example, unlike a CFO, most CROs focus on maintaining revenue streams rather than profitability.
3. Connect revenue-driving teams
Lastly, CROs connect revenue-driving teams and help them work together towards mutual goals. That cooperation is critical to effective revenue generation. It’s also what allows the teams to align their goals.
Typically, the CRO, responsible for Revenue Operations, will be the person integrating Sales, Marketing, and (when separated from marketing) – Customer Success teams:
According to an Outfunnel report, nearly half of revenue professionals don’t feel their goals are aligned. The data differs depending on the size of the company. Employees at companies between 51 to 100 employees feel the least aligned. Yet, cooperation is critical to effective revenue marketing.
What does a chief revenue officer do to drive revenue
It’s hard to list all tasks of successful CROs, as they may differ from one company to another depending on the stage and size of the organization. However, some tasks are common across the board.
Because these tasks involve different teams, we split the CRO’s responsibilities into three categories.
These include tasks that are focused on sales, marketing, and management.
Chief revenue officer sales-oriented tasks
- Monitoring key revenue metrics. The most important metrics for a CRO are monthly/annual recurring revenue, CLV, and MRR/ARR. Usually, they watch them by channel or by segment.
- Price management. Keeping an eye on the average selling price. Enhancing/revamping pricing models based on market response.
- Analyzing sales data and buyer behavior to create new revenue streams or improve existing ones.
- Simplifying sales operations and creating a top-down approach to the sales process. This includes every step, from account planning to lead management and closing.
- Revenue forecasting. A good CRO must be able to provide other departments with reliable revenue forecasts, which they can later use to plan their costs and build growth strategies.
- Hiring and/or coaching new salespeople. This usually happens in cooperation with sales executives or managers. It’s worth noting that many CROs have a background in sales. So while they’re not responsible for the department, they often help with coaching or hiring.
- Creating necessary SOPs and structures to improve sales team results. This includes finding issues and obstacles in the sales process that could affect team efficiency.
Chief revenue officer marketing-oriented tasks
- Brainstorming new monetization strategies for existing revenue streams. These include bundling, cross-selling, up-sales, and down-sales. They also look for new services and products to offer and/or for ways to evolve the existing ones.
- Planning or approving short-term revenue-driving strategies, such as discounts or promotions. They are usually planned and implemented by marketing or sales teams. However, CROs often approve revenue-boosting campaigns that involve significant discounts. Similarly, they take part in the creation of campaigns that alter existing pricing strategies.
- Planning customer-retention strategy. To boost revenue, the CRO helps find initiatives that reduce customer churn. These are critical in SaaS companies where customer churn greatly impacts company revenue.
- Analyzing customer data. CROs look for untapped customer segments that they could introduce to existing revenue streams.
- Reviewing the latest technology and finding ways to improve customer experience.
Chief revenue officer management-oriented tasks
- Improve decision-making across the board. CROs unite teams and help them make decisions that bring the company closer to its revenue goals.
- Sharing feedback with teams responsible for revenue. CROs review revenue teams’ strategies and help adjust them to changing market conditions.
- Managing revenue teams. This includes setting revenue targets and OKRs, and evaluating team progress towards revenue goals.
- Analyzing existing processes involved in revenue generation. This step often involves cross-department cooperation. CROs crowd-source feedback and use it to decide on things to improve.
- Helping to pick key technology for revenue teams. This includes PM, CRM, or ERP software and infrastructure. Usually, they make those decisions in cooperation with a CTO. The role of a CRO is to ensure that selected technology helps the current revenue strategy.
Of course, most chief revenue officers won’t be involved in all tasks. Many of the above may not even apply to your business (especially if you don’t have a CRO on your team yet).
As your company grows and responsibilities pile up, it may be time to hire one. In the next section, we’ll go over key signs it’s time to pull the trigger.
When do you need a CRO?
As a member of the C-suite, a CRO is rarely found in small businesses or start-ups. In the early stages of business growth, most tasks of a CRO are taken care of by the CEO or the CMO.
This usually lasts for as long as the company is focused on its key revenue streams. If there aren’t many revenue channels (and there’s no need to expand), there’s no need to hire a CRO either.
However, this changes when the company starts to grow. As the growth accelerates, the CEO soon becomes overwhelmed by all the revenue-related work. That’s when they’ll start delegating that work to other executive team members.
Keep in mind, though, that unless the company is growing rapidly, it’s unlikely it’ll hire a CRO so early.
In the early stages, revenue generation will be picked up by VPs of either sales or marketing.
Of course, there will come a time when they have too much on their plates. As the revenue teams grow, their members will need someone to look up to — someone who could exclusively dedicate their time to overseeing revenue-generating processes.
If you’re at a point where you need someone to connect all the revenue-generating teams, it’s time to hire a CRO.
Of course, these are not the only signs when you should consider hiring a CRO. Other key signs that you need a chief revenue officer include:
The company is losing its revenue instead of growing it. This is often caused by problems with the basic stuff, such as lead generation or qualification.
Sales and marketing teams have become misaligned and don’t seem to be able to work together. That’s where having a CRO onboard can help. It’s estimated that sales and marketing alignment can boost the deal closure ratio by a staggering 67%.
You feel it’s time to hire someone with expert knowledge in handling revenue streams. Someone to create a synergetic effect and take your revenue to the next level.
You simply want your business to grow. Data suggests that a CRO has a positive impact on the growth of your company. That’s as long as they’re skilled and can centralize revenue operations:
- According to a report by Boston Consulting Group, centralizing RevOps operations can lead to an ROI increase of up to 200%.
- Data from the same report suggests that revenue ops can accelerate growth thanks to 10% – 20% growth in sales productivity.
- Aligning sales and marketing teams can help the latter generate 209% more revenue.
- Lastly, public companies that centralized revenue operations were valued 71% higher than their competitors (based on stock prices).
Keep in mind that the role of a CRO is one of the most important in your business. So you shouldn’t hurry with hiring one, nor should you hire just anyone.
After all, the CRO doesn’t just take some of the responsibilities off your shoulders. When they join your company, they take control over a critical area of your business. An area that’s responsible for its growth and success (or failure). A poor CRO won’t help you improve — if given too much freedom, they can even drive your business under!
Because of that huge level of responsibility, the true value of a CRO lies in their expertise and what it is that they can bring to the table.
Here’s how (and why) to pick a successful CRO for your business.
Key skills of a successful CRO
The CRO is one of the most important positions in the C-suite. So, professionalism, maturity, or being a self-starter are a no-brainer when choosing someone for the job. On top of these, every CRO needs:
Top-notch analytical skills. A huge chunk of every CRO’s work boils down to analyzing data. They need to be able to understand customer behavior just by looking at the data. They also need the expertise required to spot revenue patterns. They then need to take that data and come up with ideas on adjusting revenue strategy based on their findings.
A team mindset. CROs connect key revenue-driving employees across marketing, sales, and technology departments. Their role is to encourage new ideas, share feedback, and motivate team members to look for revenue boosts. That is, of course, if they are a true team player.
Strategic thinking. Creating a revenue strategy is one of the key roles of every CRO. But to come up with a solid one, they need to be able to see the big picture and create long-term plans. This can get tricky as they need to consider the work of a few different departments.
Ability to work under pressure. As a person responsible for one of the company’s key processes, CROs work under tremendous pressure. Moreover, good CROs have to deal with more than just their own pressure. As team leaders, they need to be able to help their sales and marketing teams manage said pressure.
Goal-setting skills. To hit the company’s revenue goals, CRO has to be able to set and hit both short and long-term targets. They then need to be able to share those goals with the team and help them move closer towards them.
In-depth knowledge of the company’s offer (or the ability to gain it quickly). A good CRO must understand how, why, and where customers purchase the product. This helps them identify new opportunities for generating revenue and get the most out of existing revenue streams.
Knowledge of business finances. A CRO doesn’t have to be the company’s second accountant. However, a solid understanding of business finances helps CROs make better business decisions.
Understanding of the product’s (or service) revenue cycle. This is key to coming up with ways of reducing customer churn. This, in turn, helps increase the lifespan of existing revenue streams.
Negotiation skills. No CRO will achieve much without cooperating with other executives. Solid negotiation skills and the ability to fight for one’s cause are necessary for the C-suite.
Technical skills:
Ability to tap into different data sources. Website, email autoresponders, automation platforms, eCommerce and marketing tools, analytics… today, data is everywhere. From sales to customer behavior, modern CROs must understand how to collect and read data.
Knowledge of different sales platforms. And, even more importantly, how they impact revenue goals and KPIs. This is key to picking tools that directly impact the company’s revenue.
Understanding of scalability in technology. Scalable revenue infrastructure allows you to react dynamically to changing market conditions. It also allows you to cut costs and scale up or down depending on forecasted revenue.
Understanding of the impact technology has on revenue. Today, technology, sales, and marketing are inseparable. Integrations, remarketing, marketing automation, and even AI can boost your revenue streams. Often, it’s impossible to tap into certain revenue streams without the use of modern technology.
An innovative mindset. The market in which every business operates changes rapidly. As new innovations hit the market faster than ever, revenue stream disruptions become more common.
The latter point is essential if you want to stay competitive. To survive and grow, businesses must identify technology-driven opportunities and threats. And they need to do it in time to act.
A great example of this is marketing automation. Without it, handling certain processes that the customer expects is almost impossible. It’s no surprise that in 2021, 3 out of 4 companies reported using marketing automation tools. So if you’re not using one, you’re losing out on untapped revenue.
How to become a successful CRO
Usually, the role of a CRO is reserved for people with significant experience in revenue-generating roles.
Often, CROs come from within the company, either from the marketing or sales department. In some companies, marketing or sales executives take on the role as the C-suite grows. In other cases, the company may choose a smart and bright employee and “groom” them to become a CRO.
Of course, that doesn’t mean you can’t become a CRO at a new company without holding an executive position first. But to do that, you’ll need to have the right education and experience. That’s on top of most of the skills we’ve already covered in this article.
Chief revenue officer education
In 99% of cases, a chief revenue officer needs formal education.
Usually, a bachelor’s degree is an absolute minimum. That’s unless they’ve got significant experience running their own business.
The most popular majors include accounting, finance, and business administration. Due to internal policies, many big companies will not consider a candidate without an MBA.
Chief revenue officer experience
As with any leadership position, the role of a CRO requires years of experience and extensive business acumen.
The requirements are comparable to those for top C-suite positions such as VP of sales, CFO, or CMO.
Most CROs have past experience in roles related to revenue operations. A perfect CRO comes from finances, sales, or marketing (and understands all three). Additionally, they need more than an understanding of what revenue operations are. Rather, they’re expected to have experience creating and executing long-term business strategies.
Of course, as business leaders, they will lead different teams. So experience managing people (ideally across different teams) is an absolute must.
Lastly, no matter whether they come from sales or marketing, the CRO you hire should have a solid (and easy to verify) track record. You want them to prove they’ve helped boost the company’s revenue in their previous positions.
Without that, all you have is their word that they possess the skills they claim to have. This may not be enough for a position that has such a big impact on your business’s operations and future.
Becoming a CRO – things that’ll help you work your way up
Everything in this section comes on top of all the skills, education, and experience mentioned earlier.
Yet, sometimes a candidate who’s best “on paper” may still lose to a candidate who was more “strategic” about getting the role. If you want to improve your chances, here are tips that should help you succeed.
First: Consider this if the CRO position does not exist at your company
Not all companies will have a CRO among their ranks. If that’s the case for yours, you typically have two choices:
- If you’re already in the C-suite (or have a good relationship with executives), you can “lobby” for it. Usually, this will involve getting it separated from marketing and sales. Of course, when doing that, ensure that you also work on positioning yourself as the ideal candidate.
- Leave the company and go look for a CRO position elsewhere.
If you pick #2, you don’t have to restrict yourself to looking for CRO openings, especially if you plan on looking at smaller companies.
As mentioned earlier, in small businesses and startups, the tasks of a CRO are often handled by the CEO. The upside is that if you’re currently working at a big company, it might be easier for you to get the desired position at a smaller one.
Plus, as the number of responsibilities at a startup goes up, so does the number of open positions.
Usually, the position of marketing and sales executives appears before that of a CRO. However, because they incorporate the tasks of a CRO, it may be worth considering going after one of these roles first.
It might be a good opportunity to gain experience you’ll be able to use as a CRO in another company. And second, they may need to find someone to lead the entire revenue team in the future. When this happens, there’s a big chance you’ll be the first one to get promoted.
Of course, if the position of a CRO exists (or there’s a plan for one), there’s a whole lot of other stuff you need to take care of…
Start polishing your CRO skills
The first step is looking at the list of required CRO skills and polishing yours. See what you’re good at and where you might be lacking experience.
Of course, it’s going to be super hard to get really good at all the things listed. But you might not even need most of them.
Instead of trying to nail it all, focus on the things valued most at your business. The role of a CRO is not set in stone. So, in some companies, certain tasks of a CRO might still be handled by a CMO or VP of sales.
To get the job, you want to focus especially on all the tasks that are critical for the CRO’s position at your company.
Find a balance between your individual metrics and being a team player
Your performance is, in part, evaluated based on your individual metrics. So to stand out, you want to ensure these are as good as possible. After all, one of the traits of influential leaders is that they lead by example.
But, don’t forget that there’s more to leadership than excelling at your performance.
Part of being a leader means helping others achieve similar results. This means you’ll have less time to focus on yourself.
The key is to learn to find a balance. You want to help your team succeed without neglecting things crucial for your own growth.
Network like crazy – inside and outside of your company
The harsh reality is that it’s often hard to get the role of a CRO (or any role in the C-suite) without connections. And there really isn’t anything wrong with that. The trust factor is huge, especially regarding an area as important as revenue.
That trust is the reason companies promote internally or listen to recommendations. They know what to expect. That’s why your relationship with VPs can hugely influence their decision on who gets the role.
The easiest way to a CRO role is to get to know the people you’ll be working with. The CEO, C-suite members, and VPs of sales or marketing are all people you should have good relationships with. And if you’re looking to switch companies, it’s worth adding recruiters into the mix.
Of course, if you’re planning to enter the startup world, don’t forget VC firms.
Let your expertise speak for itself
When networking, you don’t want to focus on building relationships for personal gain.
Sure, use them to showcase your skills and expertise. But strive to turn them into win-win scenarios as much as possible.
For example, try helping others solve problems in their departments. Or you could join strategy sessions and add value to the strategies other VPs are working on.
Create a goal – and break it down into actionable steps
Lastly, make sure you’ve got it all written down in the form of a plan – and adjust accordingly to your situation.
As discussed, you need to focus on different things when trying to land a position at a startup compared to going up the ranks at your own company. So make sure that you know where you’re going.
Getting the job may take months or even years. But if you’re passionate and have the skills – nothing is stopping you from getting it but you.
Keep networking, grow your knowledge, and always stay open to new opportunities.
Conclusion
Technology forever disrupted the way we do business. Today, market changes appear faster than ever, dealing with which requires specialized knowledge. To stay competitive and keep moving forward, companies need specialized leadership positions.
This is true, especially when it comes to revenue. Leaders who understand revenue operations are becoming more valuable than ever before.
However, today, chief revenue officers don’t just help oversee revenue operations. Rather, they’re the people who help modern companies centralize revenue operations and explore new revenue streams. They’re the driving force behind innovation and the introduction of new technologies.
It’s no surprise Gartner predicts that 75% of highest growth companies will deploy a RevOps model.
CROs’ expertise is also what protects existing revenue streams from competitors. In fact, with the right strategy, they can even help companies win part of that revenue from their competitors.
But, most importantly, they help build revenue streams that are stable and predictable. This helps other departments create more accurate strategies and make better business decisions.
And one of the keys to ensuring stability and predictability in your revenue stream is marketing automation.
Thankfully, it’s easier to introduce it to your business than ever before. Click here to schedule a quick call to see how a tool like Encharge can help you expand your revenue streams.
Read next: 5 Courses to Learn Everything About Revenue Operations in 2022
