Should CEOs Hire a Chief Revenue Officer Who Executes or Builds?
According to Salary.com, Glassdoor.com and Indeed.com, the average salary for a Chief Revenue Officer hovers around $235,000 - $250,000 per year, with an average total annual compensation between $400,000 - $500,000.
So, what does an emerging growth firm get for their initial half a million dollar investment? It depends.
According to Linkedin.com, the standard definition of the Chief Revenue Officer role is a leader who ensures that sales and marketing communicate well, share information, and collaborate in content creation, to hit key targets, and convert leads. The CRO has ultimate accountability in aligning all revenue-generating departments and building strategic partnerships, to help drive a company’s profitability and success.
And the standard responsibilities for a CRO are:
Monitor the marketplace and analyze opportunities, providing competitive strategies and tactics
Remain well-connected with customers to ensure that their needs are being factored into the product development and enhancement cycles
Collaborate with the finance, product management, and marketing teams on messaging, pricing strategies, and business models for achieving revenue goals
Identify and resolve issues across the marketing, sales, and account management teams
Participate in contract negotiations
The CRO is a specialist across the entire arc of the opportunity development and sales cycle.
But what happens when the CEO also expects the CRO to be a builder of the sales system AND execute the responsibilities above?
Research shows that executive leadership teams (and the Boards who approved the salary expense) expect a newly placed Chief Revenue Officer to deliver impact within 90 days. Research also shows that CRO's turnover on average every 1.8 years. CRO impact is often measured by accelerating opportunities and winning more deals.
As CEO, don't hire a CRO before your revenue engine foundation is in place. Finding a high performing, experienced operator who is also a sales system builder is like searching for the Loch Ness Monster or Bigfoot. Its a needle in a haystack.
So what should a CEO do in advance of hiring a CRO? Establish a formal sales talent strategy and sales process.
Why are these two so important?
Any CRO who's hired to run a sales team that's been built on subjective, ad-hoc hiring practices is set up to fail. Jim Collin's talent strategy in "Good to Great", directs leaders to focus on First Who, Then What—to get the right people on the bus. Why? 'Those who build great organizations make sure they have the right people on the bus and the right people in the key seats before they figure out where to drive the bus.'
Without the right sellers, a CRO doesn't have a sales team. And this team will not consistently generate opportunities, understand client needs, develop relationships, deliver value messaging, educate clients with perspective and insights, overcome buyer objections or close deals. A CRO cannot deliver impact in 90 days with a makeshift sales team.
So what about the sales process? The sales process is a series of repeatable steps a sales team takes to move a prospect from an early-stage lead to a closed customer. These steps align with "stages" in CRM. A strong sales process is designed in a framework, and help reps consistently close deals. Ad hoc selling practices typically lead to data integrity issues due to poor CRM hygiene standards, overstated opportunity health, and pipeline forecast issues from shifting opportunity values and closing dates. A CRO cannot deliver an accurate forecast or pipeline updates within the first 90 days by using an ad-hoc sales process.
A CEO cannot afford to get the CRO hiring wrong, and certainly cannot afford to lose the right CRO who couldn't be successful in their first 90 days.
To learn more about building foundational maturity of your hiring process or sales process, reach out to us at info@LucrumPartners.co . We can help.