Summary: The traditional “independent” sales organization is fading away…while a new level of leadership — from the CRO — is unifying functional silos to drive revenue optimization, customer life-cycle management, insight-led selling and dynamic segmentation.
The Situation: In today’s hyper-competitive marketplace, companies need to provide more tangible value to stand out. In many industries, this now means integrating and improving the customer’s entire experience with your company versus just touching them through uncoordinated silos. Recognizing this, companies are deploying Chief Revenue Officers (CROs, or similar titles like EVP Sales and Marketing, Chief Customer Officer, etc.). These roles typically own Marketing, Sales, Customer Service, and sometimes Product Development, and manage these functions to create a compelling, high-value and well-coordinated “customer journey” in their company.
The Challenge: In taking on this mission, the CRO faces a series of leadership and management challenges. For example, at each phase of a customer’s interaction with the company there are multiple elements the CRO must coordinate. First, prospects need to learn about the company through messaging that is consistent across multiple channels and media forms including ads, references, website, whitepapers, events, outbound, and sales reps. Second, the actual sales process often requires coordination across multiple sales, support and marketing roles. Third, touches/messages need to be coordinated to ensure a smooth ramp-up, and to drive cross-selling and upselling. And, fourth, the CRO will want to turn that customer into a reference case, co-solutioning partner or new business generator.
The CRO Checklist: Based on Alexander Group’s (AGI) consulting experience working with CRO-type leaders, we recommend CROs apply the following four best practices to maximize their success.
1. Communicate a Compelling Sales Vision to the C-Suite
Today’s sales models are more complex, are focused on customer value and life cycle, and require greater investment in sales support, analytics and enablement. To invest at that level, the C-suite (and often the Board) has to buy in. However, they may wonder if Sales will really make the necessary strategic changes to secure the ROI on those investments. For the CEO to simply hand Sales a blank check is neither wise nor likely. Therefore, “job-one” for the CRO is to articulate a compelling C-suite vision for Sales investment, while also signing up to deliver the required Sales changes.
2. Map and Manage the “Buyer’s Journey”
This is the heart of the CRO’s mission. Allowing different ways for customers to engage and grow with your company is good. But leaving these journeys in the hands of separate organizational silos and employee judgment is not. Today’s customers want a high-value, ongoing relationship and solution. For example, many software and product companies are now realizing that they need to actually drive the “usage” of their product to maximize revenue and loyalty. This would be a new challenge for a more product-oriented sales organization that might give the customer more of a “hit and run” experience.
To optimize the buyer’s journey, CROs must start by changing the culture to bring an ”outside-in” perspective, so employees see the company through the customer’s eyes and feel their pain. At a deeper level, building buyer personas is key to helping employees understand the different influencers and objectives within the typical customer. With greater customer insight, the company can now target those specific prospects for which it has a uniquely strong value proposition. This means leveraging a creative new mix of outreach, including “show me that you know me” social media channels, to build real rapport.
But, getting prospects engaged is just the start of their journey. The CRO must then define and manage the customer’s buying and on-boarding experience, and make sure their expectations are exceeded. To make this work, winning CROs have learned to map and enforce rules of engagement across the touches deployed by Marketing, Sales and Partners. For example, many cloud company CROs are now deploying Customer Success Managers (CSMs) to drive “value-realization,” i.e., to make sure customers are using the products correctly, often, and with maximum satisfaction.
As a next step, the rules of engagement or “playbooks” help the CSMs work closely with Account Managers to increase revenue within an account, either by adding users or selling additional products. At this stage, CROs need to coordinate specialized resources such as product specialists, solution experts, customer advisory boards, CSMs, and account management teams to increase customer engagement. By ensuring a high-quality customer experience, the CRO can ultimately transform the customer base into an annuity portfolio.
3. Demand and Manage Cross-Functional Leadership
The above description of a successfully managed customer journey is clearly impossible without strong cross-functional coordination. As many have learned, just linking three silos under one leader is not a “win.” In fact, it’s not enough that the CRO create a compelling vision for the C-suite or map the new customer experience; he or she must also instill a new level of cross-functional communication, coordination and culture to pull it off. In this, the CRO must message aggressively — externally to prospects and customers, and internally across the organization (i.e., downward, upward and sideways) to build momentum around the new vision.
Specifically, winning CROs hold their leadership team collectively responsible for the desired culture change and customer experience. That means conducting regular team meetings to review progress metrics, identifying lessons learned, and holding each other accountable. For example, the CRO may get Marketing to commit to investing more in higher-caliber leads, and get Sales to commit to more thorough lead follow-up and feedback. Moreover, the CRO has tremendous leverage because they own all the sides of the internal debates that distract most organizations (e.g., profitability vs. discounting, new vs. old product focus, hunting vs. farming investments, etc.). So, good CROs will be able to find better answers today, often using customer lifetime value (CLV) as criteria because that measures both a higher-value and a more profitable customer experience.
4. Challenge the “Sacred Cows” in the Sales Strategy
While winning CROs work to transform their entire customer-facing organization, tackling the “sacred cows” in Sales is one of their toughest challenges. This is because sales personnel tend to have strong preferences about how to manage customers, as well as high pay-at-risk tied to getting it done. As a result, they may resist new approaches, fearing longer sales cycles and more entangling customer commitments. A related challenge is that some CROs repurpose the wrong DNA for their new model. For example, they may try to turn customer service personnel into Customer Success Managers, pure hunters into solution sellers, or “super-seller” first-line sales managers into true coaches and resource orchestrators. This disrupts the other roles of the model and delays the success needed to build momentum.
For example, CROs must be creative — and often courageous — in moving the Sales function from:
We hope you have found this overview of the emerging CRO best practice steps a useful starting point for thinking through your approach. What are you doing to align functions around a high-value customer experience and to drive sales transformation?
Read more about CRO Best Practices.
Learn more about our Sales Operations Practice.
Read Part II of this blog series.