The CRO owns Marketing

The schism between sales and marketing has long been a running joke within the start-up community. When numbers are missed, sales blames marketing for not generating enough leads and marketing blames sales for not following up on the leads they supply; it’s a trope that's been around since VPs of Marketing and VPs of Sales reported to the CEO.

The Chief Revenue Officer, or CRO, position is a relatively new one. It started as a way to elevate the VP of Sales to the C-level, perhaps as a way for the CEO to elevate the importance of sales to the future of the organization. In the past, there was little difference in responsibilities between the CRO and VP Sales positions. Most of these orgs had CMOs, too.

But as the CRO position has matured, it typically differs from a VP of Sales in a number of ways:

• First, it is typically a position created after a company has found product market fit, usually after a Series B or C.
• They are tasked with coming into the organization, analyzing each part of the sales funnel and putting systems and processes in place to make all revenue generating activity more efficient to successfully scale the company.
• They tend to be more data-driven and operationally focused, rather than deal-making experts.
• VPs of Sales are usually great at managing a team of individual contributors with a variety of personalities, to help them effectively navigate deals to close.

Typically, Sales VPs are early employees responsible for acquiring the majority of the customer base to that point. Naturally, as the pipeline scaled beyond their bandwidth and the company started generating healthy cash flow, they could be promoted and hire a team to take on existing pipeline while generating more opportunities.

Generating new opportunities, and developing a repeatable sales motion (i.e. packaging and pricing) tends to be the most difficult part of scaling a company. Will these early Sales VPs are truly great at being creative with the resources at their disposable to bring on new customers in the company’s early days, they tend to operate less well once the business needs to manage their unit economics in order to successfully scale.

Additionally, filling the top-of-the funnel with enough qualified opportunities to sustain the business long-term tends to become the most difficult part of the equation.

In a lot of cases, the early VP relied on his rolodex and relationships for the business they brought in, which is not sustainable.

As the CRO takes on analyzing and improving efficiencies at all stages of the funnel, expertise in building a lead generation program has proven to be the most important piece of the puzzle. And with cold outreach becoming less effective (though not INeffective) over the past few years, it is imperative that CROs become experts in all lead-generation models; including marketing and product-led growth.

As CRO’s own all things lead-gen, and as scaling demand becomes imperative for long-term revenue growth, marketing will (and do) own a revenue KPI, not just a lead KPI. With this shift, that function will no longer report directly to the CEO, but instead will report to the CRO.

Structurally, the CRO will oversee marketing, sales and customer success. Though it might be tempting to think that product will report into the CRO over time with the proliferation of PLG, a VP of Product or CPO with a unique blend of technology and business acumen, should remain as the bridge between tech and revenue acting as a partner and not a subordinate.

With the increased emphasis on a product’s ease-of-use as an important growth lever, and a reduced emphasis on the complexity of the code on the back-end since most of those practices are fairly uniform, the next org structure evolution may see a CTO reporting to a CPO.

Some articles will be first-person, and some will be just general thoughts on industry trends. Feel free to reach out with feedback, thoughts, etc… nate@bluebirdanalytics.co