Today the customer has the power. It used to be face-to-face meetings with salespeople that informed buying decisions; for example, going into an automotive dealership and learning about a car before making a purchase. Now, your customer is researching and making informed decisions on her own, via the Web, well in advance of talking to, or meeting with, any of your company's salespeople.
This customer-centric, Web-based approach has proliferated over the past decade. Buyers are much more educated and much more web savvy; they expect to have immediate access to data about your products, your services, and your support via the Web. You had better be ready to respond in a way that matches how your prospects are deciding whether or not they want to buy your products. The fact that this approach has gone mainstream over the past five years and is not limited to the technology-savvy means it's an unavoidable fact of doing business today.
That's where today's Chief Revenue Officer comes in. The CRO is in charge of dealing with that shift in business reality-the new transparent relationship between customers and sellers.
The CRO title was initially discussed in the 1990s as the Internet began to change the way buyers (primarily related to B2C companies) identified products they wanted to purchase. As consumers and business customers have become more savvy, the CRO has come roaring back and is becoming an imperative, especially across Silicon Valley software companies.
However, there are a variety of takes on what the CRO role actually means-and what the job entails. But the CRO can help any type of company focus on increasing customer value, while putting the company on an accelerated growth path.
First, a CRO should not simply be a glorified chief marketing officer (CMO). The job of a Chief Revenue Officer is to be accountable for the strategy and success of the company's overall revenue performance. That requires an extensive operational and strategic understanding of marketing and sales. The cycle of money invested in marketing, capitalized on by sales, and then reinvested into marketing is called the revenue cycle. The performance, and continual improvement, of that business process should be the responsibility of the Chief Revenue Officer-and the CRO's area of expertise must be revenue performance management.
Question: How fast have sales and marketing, and your overall business processes, changed in order to adapt to your buyers becoming more savvy and fast to act over the web and be influenced by social media?
In most companies, I don't think it's changed as much as needed. In fact, I believe that less than 5 percent of mature companies are operating in a way that effectively responds to the reality that more than 50 percent of their buyers are deciding to buy their products (or their competitors') via the Web.
Here are three questions to determine how your company is keeping up:
- Are more than 50 percent of sales coming from inbound interest via your websites?
- Do you have a mature lead nurturing program in place that scores leads prior to delivering them to the right sales channel/person?
- Does sales believe that marketing gives them more than 70 percent of their deals?
The answer should be yes to all three questions.
The CRO makes sure that the marketing and sales teams are perfectly aligned so that prospective customers are nurtured and have a "wow" experience every step along the waywell before they are passed along to sales. If you have a CMO and a VP of Sales, chances are your company has an ineffective hand-off of information between these two critical functions.
The CRO holds marketing accountable for making sure time and energy is not wasted on ineffective, or poorly targeted, programs and campaigns. The CRO then ensures that the sales team takes full advantage of the opportunities created by the marketing team, rather than squandering time and energy in ineffective prospecting. The CRO must also work to transform historic cost centers, like customer service, into revenue generating machines that feed sales.
Ultimately, the Chief Revenue Officer is charged with the continual improvement of the company's revenue performance and increasing customer value.
I believe a CRO could accelerate the transformation of your organization.
+ + + + +
About the author: Paul Albright is Chief Revenue Officer of Marketo