The CRO: A New Member of the C-suite

Alexander Group continues to explore enduring leadership

How more informed and sophisticated customers are demanding ever more value from their vendors…and what sales organizations are doing about it.

One recurring action is the creation of a chief revenue officer (CRO) position to unify leadership of marketing, sales and service. Alexander Group has conducted some research with CROs from various industries to explore how this position actually works and what benefits it delivers.

What is the CRO Role? 

While it is becoming more prominent, he CRO is still a relatively new role in the C-suite position dedicated to processes that contribute to revenue generation. 

Some of the most critical areas the CRO controls are marketing, sales and services. The CRO works individually with Sales and Marketing to optimize each sector. As the CRO works within each department using a role-specific approach, they also prioritize common themes, practices and tools to align the sales and marketing departments. 

The CRO’s efforts extend beyond Sales and Marketing. A CRO will synchronize all departments that contribute to revenue generation, including customer support, account management, product development and finance. 

What Does a Chief Revenue Officer Do?

The CRO’s precise role varies between organizations. Revenue generation and growth involve nebulous tasks with abstract definitions and metrics compared to the quota-driven responsibilities of sales leaders. Consequently, the CRO touches various departments and develops ideas that will improve the organization’s revenue. Here are a few of the CRO’s duties: 

• Establish revenue goals: The CRO understands the organization’s needs. They will establish goals that allow the company to thrive in the present and strive toward a more profitable future. 
• Assign departmental responsibilities: Each department plays a role in the organization’s success. Achieving a revenue goal requires each department to understand its responsibilities. The CRO will set micro goals for each department that contribute to the overall revenue goal. 
• Develop customer segments: The CRO has a hand in breaking the organization’s customer base into smaller segments. Customer segmentation optimizes sales strategies for efficiency and revenue growth. 
• Ideate new products: Improving products or developing new ones helps sales organizations satisfy demand and build revenue. The CRO may directly develop or influence the formation of new offerings. 
• Establish go-to-market models: Go-to-market (sometimes referred to as go-to-customer) modeling covers everything from the value proposition through pricing. The CRO is involved in planning product launches to increase each offering’s revenue potential. 

The Evolution of the CRO Role

The CRO role has grown in prominence over the past decade. Various factors have contributed to the position’s rise. New technology has created a digital sales landscape where companies must re-imagine their sales approaches. Companies implement the CRO role to oversee sales process changes that appeal to the modern market. The digital shift has also increased the need for marketing, sales and service channels to align. The CRO can oversee both and establish synchronicity. 

What is the Rationale for Adding the CRO Role to the C-suite?

It boils down to a need for better vision. Sales, marketing and service executives focus on solving today’s problems and making today’s numbers. But the role of the CRO is to also step back and ask, “Is there a better way?” This makes the CRO a catalyst for change—one who finds ways to grow revenue faster by serving customers better.

The role of the CRO is to find out where new approaches are needed and to leverage the talents of the whole team (marketing, sales and service) to build a new and more value-laden playbook.

How Does the CRO Enable Such a Playbook?

Alexander Group has identified seven factors that, by virtue of cross-functional influence across Marketing, Sales and Service, the CRO can use to steepen the growth trajectory of the company.

1. CROs help create more compelling value propositions. The CRO collects and harnesses customer-centric insights in a way that siloed, functional executives cannot easily do.
2. CROs make every customer-touching function responsible for results. Marketing, Service and Sales can all contribute to pre- and post-sale customer success. The CRO can ensure that there are measurable goals for all functions that add up to potential revenue growth.
3. CROs help make customer-touching resources more productive. By more effectively connecting the right resources with the right customers, the CRO makes all customer-touching resources more impactful, more efficient…and more productive.
4. CROs enable a more collaborative, communicative culture. When organizations design programs from a broader perspective, to serve the customer instead of protecting turf, collaboration comes naturally. And so does growth.
5. CROs enable more innovation through the “democratization of ideas.” The CRO can unleash the power of the individual contributor through collaboration. The CRO actively assimilates the best ideas and turns them into action.
6. CROs improve the sense of partnership between Marketing, Sales, Service and other key functions—especially Finance. Others view the CRO as a peer, enabling a dialog and some give-and-take with finance. This takes the CFO out of the role of simply saying “no,” and enables a thoughtful discussion with the CRO about the business case and its merits. This produces a healthier, more productive relationship.

CROs enable both speed and learning. When CROs enable a collaborative sales, marketing and service ecosystem, companies are able to get products to market faster, learn what works faster and deliver real value more consistently.

Existing Problems Handled by the CRO

The CRO ushers the organization through the issues that make or break revenue growth by determining the following:

Customer Problems 

Customers have problems they count on businesses to solve. The companies that develop the most effective solutions the fastest often win the customer’s business. The CRO helps the company put a solution on the market faster by determining the need, developing a product and equipping sellers to communicate the product’s value to customers. 

Value Propositions 

A unique value proposition contributes to a customer’s decision to choose your business over another. The CRO assesses the organization’s products and services to determine a unique sales angle. The CRO will also form relationships with customers, evaluate their needs and communicate the value the product or service delivers. 

Customers That Require the Most Sales Team Attention

There are common traits between the customers that demand greater value from the sales team. The CRO assists in determining where each customer segment falls. Many are solution seekers who want lasting relationships and conversations that go beyond price. Solution seekers require the most attention from experienced sales representatives.

Necessary Marketing, Sales and Service Resources

The CRO ensures efficient utilization of all marketing, sales and service assets. Each department will have a unique focus that contributes to a greater goal. Different products and customers require different levels of contribution from each department. The CRO finds the right balance to generate revenue and control expenses. 

The Path Toward Profitable Revenue Growth 

Revenue growth is the CRO’s primary concern. The tactics that the CRO implements seek to increase revenue growth. The process takes time and dedication. Drawing the map is one aspect, but the CRO must also make sure the organization stays on the correct route and keeps up with its schedule. 

Closing Thoughts

The CRO understands the challenges in each organizational function…and how the various functions can address these challenges by working together more closely:

• Marketing produces better leads when it shares revenue responsibility with Sales
• Sales moves leads through the pipeline more effectively with better insight and tools from Marketing
• Sales develops better customer loyalty and more renewal sales when it engages with Services to engage customers before a problem occurs