The Sales Leader’s Secret to Longevity: It’s Not Just About Hitting the Number
Communicating progress against plan assumptions for long-term success.
You’re driven, ambitious, and a great front-line sales manager. You’ve got your eye set on the c-suite, and know that the Chief Revenue Officer is a key, visible member of any company’s leadership team.
Yet data from Live Data Techologies paints a stark picture for executives in that role — average tenure is a quick 18 months, and has been on the decline for years. So, what skills can you build today that will help you beat those odds when you get there?
There’s a common conception that most CROs are fired because they weren’t able to hit their sales target. Yet if we give a new leader just a two month grace period in the role before we expect to see them have impact, and consider the length of time it takes to recruit their their eventual replacement, I’d argue that the Boards firing the CROs haven’t seen enough real performance in seat to be making such a costly change based on sales performance.
Indeed, with such short tenure, it’s likely that a lot of the performance window for these CROs is spent chasing a sales number they had no hand in setting — and which their short-tenured predecessor may have set inappropriately.
As a multi-time CRO myself and a Board advisor to sales leaders, I argue that decisions to change the sales leader are less about their inability to reach quota, and more about their inability to forecast the business. And — while front-line leaders may enjoy longer tenures than their CRO leaders, I beleive the same rules apply.
Your Secret Weapon: Communicating the Plan Assumptions
While CROs may have had a hand in building the sales target, front line managers are often just given a quota for the year. In either role, your first step should be to break it into smaller components and communicate those assumptions to everyone — the sellers, your peers, the c-team, and more.
For SaaS companies, the overall revenue target often involves a few core components:
- Renewals: You won’t retain 100% of your clients. Some will go out of business, some will be dissatisfied, some will be offered a price they can’t refuse from a competitor. Set an expectation of what your’e counting on for renewals — and the NPS scores and market intelligence data that underpin these assumptions.
- Price Increases: Your contracts may allow you to raise the price year over year. Communicate with your team about how much is allowed in all of your contracts, how much is reasonable, and set an appropriate expectation as a result.
- Upselling and Cross-selling: Expanding within your current customer base is a great way to book revenue — if the products work and are well-adopted. As you consider this number, communicate what else has to go right — on-time product launches, successful deployments, etc. to support your assumptions.
- New Logo Acquisition: Everyone loves winning new customers. But what is your average conversion rate from lead to win, how long does it take, and what sorts of marketing or other inputs do you ned to have to fill that funnel?.
- Salesforce Productivity: People will come and go from your organization for all sorts of reasons. Project how much turnover your sales team is likely to have, the length of time it will take to recruit replacements, the time it will take for them to onboard and get to 100% of expected sales contribution, and so on.
As they break down the revenue goal into these components, its crucial for the CRO to also have plan buy-in from the rest of the leadership team. If your plan hinges on hiring 10 new sellers, ensure HR is aligned and ready to deliver. Similarly, ennsuring that customer succes, product development, and others understand their role in contributing to your goal.
Similarly, front line managers rely on a lot more people than just their sellers to achieve their number. Making sure each of your colleagues understands what you expect of each other is a great way to start a tackling a new annual target — whether that be turnaround time on contract reviews, successful on-time onboarding of new customers, or availablity to provide custom demos to prospects.
Reporting Against the Plan
With these plan components communicated, you need to set up a cadence of open, honest communication with the all stakeholders on a weekly, monthly, and quarterly basis — sharing the good and the bad.
Imagine a missed monthly revenue target. Re-communicating the plan context lets you go beyond simply saying, “We missed,” to explaining, “Our new product launch faced unexpected delays, impacting our ability to deliver the first five adopers called for in our plan. Here’s how we’re adapting…”
By “showing your math,” you shift from blame to shared responsibility.
This builds trust and fosters a solution-oriented culture.
Chase The Number Anyway
Explaining why you are missing the plan, of course, doesn’t absolve you or your company from the effects of the shortfall. Bank loans still come due, employee paychecks need to be funded, and your company may still need to do some cost cutting (or dreaded layoffs) if the sales don’t come in.
As a leader, then, you still need to do everything you can to hit that number. You need to rally your team, collaborate on innovative solutions, and explore every avenue to overcome obstacles and exceed expectations.
Failing to engage in this type of collaborative problem-solving is a surefire way to find yourself on the outside looking in. On the other hand, embracing it establishes you as the kind of leader people want to weather any storm with — or at least someone they’re willing to bet a few more quarters on because of the culture of shared responsibility and collective success you’re cultivating — even if the revenue isn’t quite there yet.
I’ve been fortunate to outlive the “average tenure of a CRO” thoughout my career — not because I never missed the number, but because I established myself as the leader everyone can trust to say what’s happening, why, and what we’ll do about it — in good times and in bad.
But What if I’m Still A Front-Line Sales Leader?
Even if you’re “just” a front-line sales leader with a narrower scope of responsibility right now, adopting this approach within your own are of the business is a powerful way to showcase your leadership potential.
By meticulously breaking down your team’s targets, communicating the underlying assumptions, and proactively addressing any roadblocks with transparency and a collaborative spirit, you’ll not only drive better results but also demonstrate the strategic thinking and communication skills that are essential for C-suite success.
This proactive, transparent approach will get you noticed by your C-team and position you as a future leader within the organization. It’s a chance to prove you can not only hit numbers but also inspire and navigate your team through challenges — qualities every company values in a CRO.
Want more detail? I’ve devoted an entire chapter of my book — The CRO’s Guide to Winning In Private Equity: A Practical Roadmap for Sales Leaders — to communication about the annual plan. Grab your copy today at www.jdmillerphd.com.