Guide
Nov 03, 2020
The Chief Revenue Officer position is on the rise. But what exactly is a CRO, and why do you need one? Here’s what you need to know.
The role of Chief Revenue Officer (CRO) has been on the rise for more than a decade. But the past two years have truly shown us why the position is so important. Organizations today must be agile, innovative, and strategic in order to drive revenue.
CROs accomplish this by taking a holistic approach to revenue growth. They break down silos, create a collaborative culture, and make smart, data-informed decisions.
This is a critical step for companies that want to stay competitive in today’s modern business environment. Gartner reports that by 2025, 75% of the world’s highest-growth companies will employ a centralized revenue operations (RevOps) model.
Read on to learn what you need to know about the Chief Revenue Officer role, including:
- What exactly a CRO is and does
- Why companies need a CRO
- What to look for in your future CRO
Let’s get started!
Quick Takeaways
- A Chief Revenue Officer oversees all teams and processes related to a company's revenue generation and growth.
- CROs need extensive cross-functional experience and RevOps knowledge.
- Benefits of having a good CRO include better alignment, an optimized customer experience, and strong business relationships.
- Transformative CROs are innovative, data-driven leaders.
What is a Chief Revenue Officer?
Chief Revenue Officer is an executive (C-level) position responsible for a company’s overarching revenue strategy. CROs oversee how various teams drive revenue for the organization. They also ensure alignment across all departments that impact revenue generation. This includes: sales, marketing, operations, business development, and customer support/success.
Because a CRO’s responsibilities encompass multiple functions, the role requires strong revenue operations (RevOps) knowledge in order to succeed. RevOps is a newer business function powered by a collaborative culture and modern technology tools. It helps companies maximize their revenue potential through total organizational alignment.
Chief Revenue Officers with a true RevOps mindset prioritize key KPIs across functions for organization-wide success.
It’s important to note the difference between a CRO and VP of sales. As the role of CRO has become more necessary and common, it has often been confused with the more traditional VP of Sales role. While the two roles both focus on revenue, they’re quite different in function. A VP of Sales focuses on sales oversight and strategy. CROs, on the other hand, must take a holistic approach to revenue management and growth.
Below is a good summation of how the two roles differ:
Because sales is the primary driver of revenue in most organizations, CROs and VPs of Sales often work closely together. That said, the CRO role is positioned in an organizational structure alongside other C-suite executives like the COO and CFO, who all report up to the CEO. CROs work with these other executives to ensure revenues strategies align with the company’s larger business objectives.
Why do companies need a CRO?
As technology has advanced, so have the ways companies manage revenue and engage with customers. Both have become more complex. Chief Revenue Officers prioritize, align, and optimize the customer-facing departments of an organization to ensure they are effective.
Why is this important? Because aligned organizations experience higher growth and earn more revenue. In fact, Forrester reports that companies with aligned revenue operations teams grow 12-15 times faster and are 34% more profitable than those without them.
Let’s look at a few specific reasons smart companies are hiring CROs:
Technology transformation
Today’s business landscape requires the use of technology tools to enhance operations and strategy. Businesses have software platforms for everything from sales to customer relationship management to marketing automation and more. They use more than one platform to function, but a common pitfall is that these systems operate in silos.
Chief Revenue Officers work to accomplish two main goals around the use of technology:
- Integrate and align technology tools as much as possible so that they work toward larger objectives.
- Maximize the potential and ROI for each tool through strategic implementation and strong internal processes.
Customer experience
The customer experience is a growing priority for both businesses and customers themselves. Customers today expect seamless, personalized, and positive experiences with brands. Most even consider it more important than prince and product. Recent research found that 86% of consumers would pay more money for a better experience.
In response, companies are making customer experience a higher internal priority. CROs can put this priority into practice by managing with a focus on the customer experience. This optimized customer experience then drives more new sales, better customer retention, and higher revenue earned for the organization.
Organizational alignment
Organizational alignment is key to business success and drives higher revenue for companies. Marketing and sales alignment is a commonly cited example, and is often a challenge for organizations despite their best efforts. Many settle for a fragmented relationship between the two departments, even though the benefits of aligning them well are manifold:
It’s easy to see how these benefits have a direct impact on revenue growth. When you have a CRO on board, you have a strong leader with an objective view of every team. Their priority is alignment across the board, not the success of a single department. They can work from the top down to create a collaborative culture, address challenges fairly, and keep larger organizational goals top-of-mind.
Relationship management
To accomplish any of the aforementioned priorities — technology transformation, an optimized customer experience, and strong organizational alignment — you need someone who can build and manage internal and external relationships. That person is your CRO.
There is a reason Chief Revenue Officers need extensive business experience across a range of functions and strong RevOps knowledge to boot. It’s because they work across departments and with external partners to promote revenue growth.
Your CRO is the person who works with the leaders of your marketing, sales, and customer support teams to keep them aligned. They work with service providers to vet technology tools, contracts, and partnership success.
As they manage relationships, you can be confident they’re working toward a single, high-level goal: revenue growth.
Hiring a transformative CRO
When you make the decision to hire a CRO, you’re making an investment in the future of your company. You don’t want someone who will maintain the status quo. You want someone who can be transformative for your organization.
So how can you be sure you attract the right CRO candidates and hire the right person for the job?
Here are some specific traits to look for in your future Chief Revenue Officer:
- Cross-functional experience - We’ve covered this one already, but it’s important to say again. Your CRO needs to have firsthand experience in the functional areas they’ll oversee, including marketing, sales, customer support, and RevOps.
- Strong leadership skills - Your CRO will be a leader in your organization. While there are many successful leadership styles, you want your CRO to have one that fits well with your company’s culture.
- Data-driven - Data-driven insights drive modern business success. Your CRO needs to know how to use your technology tools to access and leverage data to make smart decisions.
- Innovative mindset - The world is changing faster than ever. Companies must be agile and innovative in order to stay relevant. Your CRO should have an innovative mindset that identifies opportunities and adapts well to change.
CROs create forward-thinking organizations
The impact of a Chief Revenue Officer goes beyond revenue strategy. For many organizations, a CRO represents a commitment to positive change — to being aligned, collaborative, agile, and RevOps-driven for the future.
An investment in hiring a CRO is an investment in your company’s long-term success.
Xactly provides a unified platform that integrates customer data and serves as the foundation for future innovation by supporting salespeople with precise plans, better incentives, and data-informed insights to give them more confidence in their pipeline. Learn more about how we can help you transform your revenue strategy.
