Unlocking Sales Success: The Crucial Role of a Chief Revenue Officer

Companies of all sizes, from small IT service providers to midsize commercial real estate brokerages, are seeking efficient solutions to spur revenue growth in today’s brutally competitive business environment. 

Businesses require a committed leader who can focus their sales efforts in the proper direction if they are to successfully traverse these choppy waters. Enter the Chief Revenue Officer (CRO), a key position that has the power to make or break a company’s sales trajectory. 

Having a CRO on your side can create new options and help your business succeed, whether you decide to hire a homegrown CRO or utilize the skills of an outside partner.

Businesses may optimize their potential for revenue growth and retention, promote sustainable growth, and outperform their rivals by leveraging the strategic insights and revenue-focused attitude of a Chief Revenue Officer.

Any company’s revenue formula is simple: Existing Customer Revenues – Customer Lost Revenues (Churn) + New Customer Revenues = Total Revenues. 

By having a C-Suite executive in charge of ALL revenues, the C-Suite is now focused on driving revenue growth through all its resources and mechanisms.

The Rise of the Chief Revenue Officer

Today’s rapidly evolving business landscape demands a holistic approach to revenue generation. As the traditional silos of sales, marketing, customer success merge, the need for a unifying force becomes paramount. 

This is where the Chief Revenue Officer steps in. By owning the entire prospective and existing customer journey, the CRO creates alignment between marketing, new business acquisition (sales, partnerships, business development) and existing business service (account management, customer success or service). By breaking down departmental barriers, improving communication and creating shared resources, the CRO fosters a cohesive revenue strategy that drives tangible results.

The Benefits of Having a CRO

With a deep understanding of the customer journey, a CRO can align sales and service tactics with customer needs, resulting in improved conversion rates and higher customer satisfaction.

Revenue Growth Acceleration

A CRO focuses on revenue generation from all aspects of the business, including sales, marketing, and customer success.  Accordingly, the CRO ensures that each group has the resources they need to be successful in their functional roles and ensures that the corporate strategic vision is translated into each of these teams.

As a result, marketing is able to build market brand equity that assists the new business acquisition team to find revenues and the customer success team is able to ensure that churn is minimized and recurring customer revenues are stabilized.

Enhanced Sales Performance

As the Chief Architect of the prospect and customer experience, your CRO can bring a data-driven approach to sales, services and marketing.  As a result, they leverage analytics and market insights to identify new opportunities and optimize revenue processes.

And it’s not just pretty CRM or BI Dashboards. The right CRO gathers human intelligence from the team, customers and the market to provide context for the numbers found in the reports.

As a result, your CRO understands most, if not all of the levers, that drive revenue performance of the organization and thus can quickly make course corrections so that the paths to revenue are aligned.

Streamlined Sales and Marketing Alignment

One of the core responsibilities of a CRO is to bridge the gap between sales and marketing teams.

By fostering collaboration and communication, a CRO ensures that sales and marketing efforts are aligned, leading to a cohesive customer experience and more efficient lead generation.

As a result, marketing campaigns are aligned with the needs of new business acquisition and improved brand equity and conversely, market intelligence is fed back to the marketing team to enhance messaging.

Improved Forecasting and Predictability

A CRO’s expertise in data analysis enables accurate sales forecasting, helping the organization set realistic revenue targets and make informed business decisions.

With a clear understanding of market trends and customer behavior, your CRO can guide the company towards predictable revenue growth.

Decreased Customer Churn and Increased Account Expansion

The best customer revenues are those from your existing customer.  So reducing existing customer cancellations and/or obtaining increased revenue are essential for revenue growth. As the owner of the customer journey, your CRO will work with your account management leadership to create offerings to existing customers that will entice them to stay longer or increase the services they’ll use.

To be successful in this area, your CRO will require close coordination between the product, marketing, customer success and account management teams.  But as the ultimate leader of these teams, your CRO will ensure that these objectives will be attained.

Strategic Growth Expansion

Not everyone reporting to the CRO will have a direct impact on revenue growth in the near term.  The Partnership, Enterprise Account (specialized or not) and Business Development teams that create longer term revenues streams (think OEM partnerships) that are force multipliers to revenues.  

Without clear leadership and coordination with other revenue-facing teams, these Strategic teams will flounder and even likely implode under the C-Suite’s desire for immediate results.  Your CRO can not only set strategy and direction for these teams, they can act as the coordinator with other organization functions to drive improved performance.

Is a Homegrown or External CRO the Right Choice?

Homegrown CRO

Most boards and C-Suite executives feel that hiring an in-house CRO (hired from someone internally) gives you direct control over the revenue strategy and customer journey  and allows for seamless integration with the existing team.

With prior market experience or broad business understanding, a homegrown CRO can develop deep knowledge of the company’s products, industry, and customer base, leading to tailored strategies or has the time to do so.

On the Downside,  your homegrown CRO will likely be missing some of the key learnings, best practices, skills or tools that have been developed in the market because they’ve been expending their time on internal matters. 

A full time CRO is a member of your executive team and as such requires an executive level compensation program that can be outside the scope of your current budget.  Lastly, as an executive  leader, the recruiting process can be time-consuming, requiring a robust recruitment process and ongoing training and development. 

The salary of a Chief Revenue Officer (CRO) can vary based on factors like company size, industry, and location. 

In the US, the average base salary for a CRO is $283,983, with a median salary of $250,000. The top 10% of earners make over $400,000. 

Here are some industry examples of On-Target Earnings (OTE) for CROs: 

  • Technology ($500,000)
  • Financial Services ($450,000)
  • Healthcare ($400,000)
  • Retail ($350,000)
  • Manufacturing ($300,000).

Sources: Glassdoor, Payscale

External CRO

Engaging an external or fractional CRO brings fresh perspectives and industry expertise to the table.

An external CRO can provide immediate impact, leveraging their experience and best practices from working with diverse clients.

Outsourcing the CRO role allows companies to tap into specialized knowledge without the overhead costs of a full-time executive.

However, external CROs may require a period of familiarization with the company’s operations and culture.

To stay ahead in today’s hyper-competitive market, it’s imperative for companies, regardless of their size or industry, to embrace the role of a Chief Revenue Officer. Whether you opt for a Homegrown or external CRO, the CRO represents the modern-day currency of success. The CRO’s implementation and continuous optimization can be the differentiating factor that sets your business apart.

The Reason Your Sales Pipeline Sucks – Do the Math!!

If you’re suffering from Pipeline Deficiency Syndrome (or PDS as I like to call it) then you most likely haven’t been calculating your Math of Sales correctly . If you don’t know what this is, read on.

For sales experts, analyzing metrics is the key to improving sales performance. By understanding the data behind the numbers, you can identify areas of improvement, increase efficiency, and ultimately boost revenue. 

If you’re like most small business owners or pre-A founders we work with, you likely do not have the luxury of a large sales team to generate new business opportunities and sales revenues. Accordingly, it’s even more crucial that these business owners and founders understand the factors that drive these revenues despite their limited resources.

Sales metrics are essential for any organization to track the performance of their sales team and to identify areas that need improvement. However, as described by John Doerr in his book “Measure What Matters”, analyzing sales metrics is not just about collecting data; it requires a thorough understanding of the numbers and their relationship to each other.

So, let’s  explore how analyzing sales metrics can help you achieve better results.

Let’s begin: What are sales metrics?

Sales metrics are measurements of key performance that help sales teams track progress, identify trends, and make data-driven decisions. They comprise  both leading and lagging indicators of performance and describe the specifics on each part of the sales journey.  In addition, these metrics can comprise combinations of data from various business functions like finance, customer success and marketing.

Examples of these metrics include:

  • Number of booked or held meetings
  • Number of unique transactions
  • Activity and pipeline conversion rates
  • Customer acquisition cost
  • Average deal size
  • Dollars per Dial

Sales metrics can be found at the top, middle and bottom of your sales journey (usually called a funnel, but I use both) and are the responsibility for every individual in your marketing, sales, onboarding and account management teams.

Why analyzing sales metrics is important

As we’ve already described, sales metrics are key performance indicators (KPIs) that provide valuable insights into the performance of a sales team. These metrics allow you to measure the effectiveness of your sales process, track the progress of individual sales reps, and identify areas for improvement. 

By tracking sales metrics, you can measure progress and make data-driven decisions.

When you perform initial and in depth analysis of your sales motions, you can gain a deeper understanding of your team’s strengths and weaknesses. 

When using combined function metrics like customer acquisition cost (sales and finance), campaign conversion rates (sales and marketing), average deal size (sales and finance), sales cycle length (sales and marketing), and sales pipeline velocity via time series or comparative analysis, you can identify trends and make informed decisions to optimize your sales process, improve your team’s effectiveness in that process, and ultimately drive revenue growth.

How to build your sales metrics matrix

When starting out on your data-focused management journey you should start to build and track those metrics that seem to make the most sense for your actual prospect’s journey and interactions with your sales team.

There are five stages to the typical prospect journey:

  1. Prospecting – usually lead by marketing or sales/business development teams

  2. Top of Funnel – activities which attempt to directly engage with prospects and move them into further conversations with the sales teams are usually driven by the sales/business development or sales teams

  3. Mid Funnel – activities which outline the outcomes and results of conversations with new individuals and accounts managed by the sales team

  4. Bottom of Funnel – activities which outline the outcomes of conversations with personified and potential purchases of your offerings managed by the sales, legal and executive teams

  5. Post-agreement cylinder – activities which outline the outcomes with new and existing clients managed by the customer service, finance and executive teams

Developing Metrics

Now that you know when to measure in the new client acquisition process, you should develop metrics that help you understand what’s going on in each of these stages.  What to measure can be comprised of data from a variety of business functions, here’s a few to consider:

  1. Prospecting – total addressable market, unqualified prospects, Ideal client profile

  2. Top of Funnel – Interested prospects curated by marketing or direct outreach, connected conversation rates with markets, Dollar Value Per Dial or Outreach, typical deflections

  3. Middle of Funnel – Connected conversations to discovery meeting bookings, sales meeting that are held, sales funnel (or cylinder) stage journey for each prospect, estimated revenues per transaction, size of buying committee
  1. Bottom of Funnel – Deal Win rates, deal size changes, reasons for win/loss, deal duration completion rates, sales pipeline velocity

  2. Post-agreement cylinder -duration of onboarding process, size of customer implementation team, cost of new business acquisition, churn rates.

When we combine these metrics into a series of dashboards we build what I call the sales metric matrix.  Once your matrix is started, you’ll start being able to connect the relationships between various locations in your sales process as well as financial and customer impacts.

When we layer additional data from other parts of your business, you can then start to determine correlations between website and logistics performance data as they relate to your new customers’ firmographics and the individual personas that are the most effective.

When using graphics, charts and images, you can then build visual dashboards that literally “connect the dots” between different business units, functions and outcomes in your sales, marketing and customer success functions.

With both the matrix and imaging from your key metrics, you’ve now got the insight (vs data) that will assist in decision making for each of these core business processes.

And that is how you become a data-driven revenue and sales leader.

Don’t be intimidated by the math behind sales metrics. With the right tools and guidance, even non-technical Founders and CEOs can learn to analyze sales data and make data-driven decisions (we have a great free tool that we’d be happy to share) So, if you’re not already tracking sales metrics, it’s time to start.

Identify the key performance indicators that matter most to your organization and start collecting data. Analyze the data regularly to identify areas of improvement and make data-driven decisions about your sales strategy. With the right approach to sales metrics, you can improve sales performance and achieve better results.

Unlocking Growth Potential through Sales Metrics Analysis

In conclusion, sales metrics are a crucial component of any organization’s sales strategy. By analyzing these metrics, you can gain valuable insights into your sales team’s performance, identify areas for improvement, and capitalize on growth opportunities. 

Understanding the math behind the numbers is essential, but with the right tools and guidance, anyone can learn to analyze sales data and make data-driven decisions. 

The Costly Consequences of Bad Data for Small Sales Teams

Stop Burning Money on Bad Sales Data 

If you’re a sales or business development leader at a small company with a small or nonexistent sales team, you appreciate how crucial every lead is for your bottom line. 

But what if the data you’re relying on to generate those leads is bad? After all, the List IS the Strategy, right?

Bad data can not only waste time and resources, but it can also bottom out your bottom line if not tended to promptly.

Why is Prospect Contact Data So bad?

According to a 2021 Bureau of Labor Statistics (US) survey the average employee turnover is 57.3%.  This staggering number is segmented into two main groups: voluntary turnover (25%) and involuntary turnover (29%) and high performers (loosely defined) comprise 3% of the total turnover (so 54.3% are mid or low performers).

In a world of quiet-quitting, remote work and bastardized hybrid work schemes, the workforce is more volatile than ever.

The implication is that the likelihood of you being able to reach your Ideal Prospect using your CRM contact data from the year before or even last year is likely incorrect or wrong. Relying on such Sales data is like relying on a bridge to nowhere.

Where your money is likely to go when investing in bad sales data….

The Importance of Quality Data in Sales

As a sales expert specializing in B2B sales at expanding small businesses and  having made hundreds of thousands of outbound call attempts, I’ve seen firsthand my share of poor sales data. So, I understand the importance of having high-quality contact data in both outbound and inbound sales motions.  

Here are some primary benefits of good sales contact data:

  • High-quality contact data allows sales teams to be more efficient with their time and resources. With accurate contact information, sales representatives can focus on reaching out to the right people and avoid wasting time on dead-end leads. This can help to streamline the sales process and increase overall productivity.

  • Good contact data can also improve targeting efforts. By having a detailed understanding of their target audience, businesses can create more targeted and effective sales and marketing strategies. This can lead to better engagement with potential customers, ultimately resulting in higher conversion rates.

  • Having good contact data can also help businesses build stronger relationships with their customers. By maintaining accurate and up-to-date information on their customers, businesses can tailor their sales and marketing efforts to meet their specific needs and preferences. This can help to foster a deeper sense of trust and loyalty between the business and its customers, leading to increased retention rates and long-term success.

The Persona Non Grata Syndrome

In our work with small businesses and pre-series A startups, we’ve found that most owners and founders have a general idea of the psychographics of their Ideal clients but do not have enough reference clients to affirm these personas, hence much of the time making them Non Grata (Not Welcome – At least as a customer). Accordingly, their marketing and sales teams fail in their outreach attempts, through no fault of their own:

  • Expend a significant amount of time and resources attempting to connect to the wrong people.  If they had accurate contact details of their hypothetical ideal prospects then they could quickly test for goodness of fit.  Instead they spend hours and weeks building contacts lists from a variety of sources that end up being the wrong people, the wrong data or both!

  • Even when conversations take place, the owners and sales team discover that they’re not speaking with someone in the buying committee or have the problem they’re trying to solve.  With accurate contact data and account mapping you can virtually eliminate this issue.

When using accurate and validated sales data, your sales and marketing teams are targeting the right individuals which can create prospect journeys and messaging that resonates with them, thereby improving brand value and awareness.

The Consequences of Bad Data

I can say with certainty that having the wrong sales data can be incredibly detrimental to your sales efforts. Without accurate and relevant data:

  • Your sales team may be wasting their time and resources on leads that will never convert. This is because they may be pursuing leads that do not fit your ideal customer profile, or they may be using outdated or incorrect information to try to make a sale. This can result in a lot of wasted effort, as well as frustration and disappointment when deals do not close.

  • Without this data, sales and marketing people can’t  personalize their approach to each individual lead, tailoring your messaging and tactics to their specific needs and pain points.

  • Businesses need this data so they can increase their chances of success and help build stronger relationships with your customers over time. Ultimately, having the right sales data can make all the difference when it comes to closing deals and growing your business.

Damaged brand reputation 

The Sales and Marketing teams are the leading edge of your company’s brand in the market.  By using incorrect sales contact data these teams can do significant damage to your brand’s reputation.

Inaccurate or outdated information can lead to mistakes and misunderstandings that can negatively impact the prospect and customer experience. For example, if your sales team is using incorrect corporate revenue information (a firmographic data point), this can lead to pricing discrepancies and frustrated customers. Similarly, if your team is pursuing leads that are not a good fit for your product or service, this can lead to negative reviews and a damaged reputation.

Furthermore, in today’s digital age, word of mouth spreads quickly (especially in small highly targeted groups like municipalities or healthcare professionals), and negative reviews can have a significant impact on a brand’s reputation. With social media and online review platforms, customers have more power than ever before to share their experiences and opinions. 

If your brand is associated with inaccurate or outdated information, this can quickly spread, leading to a loss of trust and credibility among your target audience. Ultimately, having the right sales data is essential not only for closing deals but also for building a strong brand reputation and ensuring customer satisfaction.

Wasted Time

I’ve spoken to so many sales leaders over the years and have heard quite a few stories (enough to write a book)  on how wrong sales data can lead to wasted time and effort on conversations with non-buyers. 

This can be particularly frustrating for sales teams who may be excited about what they believe to be new sales opportunities, only to find out that the leads they are pursuing are not a good fit for their product or service. This can be a significant distraction for the sales team, as they may spend valuable time and resources pursuing leads that are unlikely to convert.

Moreover, the false sense of opportunity that comes from having the wrong sales data can be detrimental to a sales team’s morale and motivation. When sales reps are misled into thinking that they have a pipeline full of potential buyers, only to find out that those opportunities are not real, it can be demotivating and even demoralizing. 

This can lead to a decrease in productivity, a loss of enthusiasm for the job and staff turnover, which can ultimately impact the bottom line. Therefore, it is essential to ensure that your sales team has access to accurate and up-to-date sales data, so they can focus their efforts on pursuing real sales opportunities and avoid wasting time on conversations with non-buyers.

Investing in Data is Investing in your Success

Investing in high-quality data may seem like an added expense, but it’s crucial for the success and growth of your small business. By improving your outbound sales development and generating more revenue, you’ll see a significant return on investment.