The role of the Chief Revenue Officer emerged together with the rise of SaaS (Software-as-a-Service) companies, with the intent to build a more structured way of driving revenue and growth to the company.
I was recently interviewed about the role of the CRO at Elementor. In it I some insights on how to frame this role in a company at its growth phase. You can read the interview here.
Here, I'm taking a more elaborated approach, diving more into the details of the fundamentals of the role as I see it.
The Roles and Responsibilities of a CRO
The Chief Revenue Officer serves two key roles. The first is to set the company’s revenue strategy, execute it, and oversee all aspects of revenue operations. These usually include sales, a subset of marketing, customer success, and pricing and packaging.
The second role (and too often ignored) is to serve as an executive officer, influencing all strategic matters of the company from culture to product and development, finance, and more.
Usually, the CRO will not be handling logistics operations, a domain usually reserved for a G&A position.
Companies can and should adjust the CRO R&R based on their unique needs, characteristics, life stage, and skillset. For example, for us at Elementor it meant also including Product Marketing and Community underwing.
When Should a Company Hire a CRO?
Companies in different stages of their life have different needs.
In early to product-market-fit stage ventures, usually the founders, together with domain-expert managers (i.e. VP Marketing/Sales/Biz-Dev) cover the bases and there is no real need for a CRO at these stages. In some cases, CRO hiring would be advisable if there are critical knowledge/know-how gaps, usually with a skillset/experience focused on the gap-closing domain.
As the company gets into its scaling and velocity phases, i.e. the ‘Village’, ‘City’ and onwards as depicted in Reid Hofmnas’ Blitzscaling methodology, the need of a CRO becomes essential.
At Elementor I joined as it was at the final leg of its ‘Tribe’ stage and phasing into the ‘Village’ stage.
Why Should a Company Adopt a CRO role?
Hiring a CRO, before anything else, is a cultural statement. It usually means for startup companies, a change in focus from a product-focused company to a commercial and growth one.
For more mature companies it usually means the need to break siloes within the company, having the various groups "sing from the same hymn sheet".
The CRO Pillars of Success
Revenue Generation
This is the CROs’ main accountability: building a robust MRR by creating new and upsell revenue streams while avoiding a recurring revenue loss thereof, due to downgrades and churn.
Once a company achieves a product-market fit, it needs to scale and expand its revenue operation and figure out all the other three fits.
From tightening the business model, experimenting on pricing & packaging, penetrating new markets, developing new acquisition channels, product configurations, to creating complementary revenue streams through partnerships, these all require a CRO with a laser focus on monetization across the customer life cycle.
Building The Machine
In early-stage companies, it's about specific people who can do the job. Everything is relatively simpler: communication, reacting fast to opportunities and crises, with little processes and usually a single focus thread - the machine works.
As the company scales, it stretches all key capabilities defining a business. The CRO is tasked with building a scalable, individual-agnostic, data-driven, exploratory organization, capable of growing. The revenue organization needs to be able to course-correct according to strategic priorities by utilizing efficiently its resources, developing effective processes and forming a strong, capable, communicative mid-management.
Delivering Growth
Delivering growth is where the secret sauce is. Hiring a CRO means the company is ready to make bigger business bets in order to achieve growth, recognizing some of them will end with failure.
It means testing with fairly big budgets on acquisition channels, developing a complementary mix of in-house talent with outsourced domain-expert agencies, expanding into new markets while localizing and building more product-personas fits by moving up/down the market.
No less important is to set up the right internal business platforms and automation, to support fast decision-making, so MRR growth won’t translate into correlated growth in headcount, COGS and other operating fixed costs.
Utilizing these principles, we have been able to deliver in Elementor +283% growth in revenues, +179% growth in active user base while keeping disciplined CAC and churn rates, all in less than 11 months.
A Tail Of Three
As a company grows things tend to get easily out of sync.
Hiring new managers and employees, establishing new departments, expanding into new activities, and driving more customers mean the potential for internal havoc. And when it’s messy within, it’s messy for the user.
The 3 things to look for and get the growth right: breaking silos, synced storytelling, and seamless user experience.
The Ideal Approach to Take About a CRO Role
There are different reasons for why companies adopting the CRO role, not all of them are say, optimal. Companies shouldn’t hire for the sole purpose of “just generate revenues”.
Revenue making is an aspect for sure. But instead of asking myself every morning, “how can I generate more revenues as a CRO?” I ask myself: “what job did our customers hire me to do?” Figuring this and the revenue will follow.
Summary
In conclusion, the role of a Chief Revenue Officer (CRO) is crucial for companies that are looking to drive sustainable growth and profitability. The CRO sets the company's revenue strategy, oversees all aspects of revenue operations and serves as an executive officer.
The right time to hire a CRO will vary depending on the company, its industry, and its stage of growth. Companies should also keep in mind that the role can be adjusted based on their unique needs.
Hiring a CRO is a cultural statement and a sign that the company is ready to make big investments in growth and revenue.