Get to know your Chief Revenue Officer

Get to know your Chief Revenue Officer

This blog series explores the roles and responsibilities of every member of the C-suite to help leaders understand their executive peers.

Today’s post will focus on your Chief Revenue Officer (CRO), one of the most critical executive functions responsible for growth. While this sales leader is often portrayed to be brash, aggressive, and hard charging (think Alec Baldwin in the movie Glengarry Glen Ross), nothing could be further from the truth. Good CROs inspire sales teams and collaborate with the rest of the executive team to reach their goals.

Understanding your CRO

In my experience, successful CROs typically possess high emotional intelligence, are masterful in handling prospects, operate with integrity, inject a high sense of urgency into the organization, and ensure product-to-value fit with partners and customers. But, the exact profile of a good CRO largely depends on the maturity of your company. As Jason Levkin describes in his blog, The 48 Types of VP Sales. Make Deadly Sure You Hire the Right One, this isn’t a one-size-fits-most kind of hire. That said, whether you’re just starting out or a large public company, your CRO is responsible for three core things: leading people, managing processes, and growing revenue.

People

Great CROs are inspirational leaders and amazing coaches to their staff. They are not in it for their egos and don’t play the blame game, but rather work “the problem” with their teams to ensure growth milestones are accomplished. These attributes show up daily in the way he or she leads their sales team with the right incentives to drive desired behaviors. They also manage sales staff turnover, which is expected in a performance-driven environment, in a respectful way. It’s important that your CRO ensures that sales hires match your company’s stage of growth. The CRO will typically build the pro forma financial model with the CEO, CFO, and Head of People, make it visible to the CPO, CTO, and CMO, to ensure that all executives understand what will be required to meet growth targets.

Process

CROs are students of their craft who understand and practice various sales methodologies (check out a great video titled “Overview of Four Sales Methodologies” that covers sandler, spin, customer centric, and strategic selling approaches for more). They use any combination of these sales methodologies to build a revenue model, identify sales stages, and accurately measure the “health” of the revenue pipeline. Additionally, with their peers, they identify issues within the funnel that impede sales velocity. For instance, the handoff between a marketing qualified lead (MQL) to a sales accepted lead (SAL) is a common point of friction. Having a clear definition and process for handoff will ensure the acceleration of time to value (TTV) and eventually time to revenue (TTR). Your CRO should always be fine tuning the processes to ensure that everyone in the company has a sense of ownership over the sales model.

Revenue

Sales compensation models can be driven by revenue, bookings, annual recurring revenues (ARR), margin, or a mix of metrics that are applicable to the business (to learn more, check out this post from Xcatly on crafting sales commission models). It’s your CRO’s responsibility to drive alignment with your CFO and CEO on the key metrics that are material to enable the right sales and partner behavior that ultimately drives revenue growth. Then, your CRO must partner with your CPO and CMO to ensure appropriate messages and tools exist to empower the sales team to effectively accelerate revenue with key persons involved in the sales cycle (ex. buyer, user, champion, and blocker). It is common for CROs to be in the “front lines” and ensure that the company has the right tools, people, and process in place throughout every growth phase of the company.

Summary

CRO profiles vary by growth stages of $5M, $25M, $50M, $100M+ ARR. Some CROs are more suitable for certain ARR bands versus others, but the focus areas of CRO on leading people, managing processes, and growing revenues holds true, regardless of company stage.

Here are ten questions to help you better partner with your CRO.

1. What type of sales profiles do we need at our current stage?
2. How do we recruit the best available sales talent and what behaviors do we want to incentivize?
3. What are the top three things we must do to inject velocity in the sales process?
4. What are the top three variables we look at to ensure forecast accuracy?
5. What sales methodology works best for our product in today’s competitive environment?
6. How do we quickly demonstrate value to the prospect during the sales process?
7. What are we doing to showcase how our product is superior to that of our competitors?
8. What are the resources and budget we need to hit key growth milestones?
9. How do we manage sales staff turnover and when do we know if we have the right/wrong hire?
10. How many customer visits has the CRO had this month and how many more are scheduled?

Freddy Mangum has held various C-level roles in high-growth companies that have experienced successful exits. The intent of this blog is to help the fellow leaders better understand one another so that they can execute more effectively and build great businesses. Freddy currently advises C-suite staff on go-to-market and mentors founders through programs like the Stanford Incubator (StartX).

Want to read other blog posts in this series? See Freddy Mangum’s articles on Medium here.