Thoughts on the Chief Revenue Officer?

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Jeremy Mulder
Jeremy Mulder Member Posts: 26 Expert
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edited August 2023 in CS Conversations

Hi GGR community - 

How do CS leaders feel about the Chief Revenue Officer role?

Rather than leading with my own thoughts and experiences, I'm interested in yours.  

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  • Ed Braunbeck
    Ed Braunbeck Member Posts: 7 Contributor
    edited March 2021
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    Good Morning Jeremy, 

    I've had positive experiences reporting to CEO, COO and CRO in my career. Regardless, it's important to be aligned with the organizations overall goals and understand each departments as well. Otherwise, it can be a constant conflict which isn't good for anyone. It's okay to not agree on everything but discuss those one-on-one and present a unified front.

    Hope this helps with your question.
  • Zeeshan Gauba
    Zeeshan Gauba Member Posts: 5 Seeker
    edited March 2021
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    Morning!

    I agree with @Ed Braunbeck -- you have to be aligned with the overall goals. I report up to the CRO and it has been a great partnership as we can streamline the transition between sales and post-sale processes. Also, there is better understanding and alignment from an upsell perspective. 

    Thanks,

    Zee
  • Andreas Knoefel
    Andreas Knoefel Member Posts: 73 Expert
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    edited March 2021
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    I assume that the CRO is the Head of new and recurring revenues and I am absolutely against it. Here is why:

    10 years ago, with the rise of subscription/cloud/SaaS, we had Sales, ProServ, Support, Account Mgmt.  That model fell flat on its face. Hence the emergence of Customer Success to carry the torch after the Sales to EOL. Now with CS popular and responsible for the recurring revenue, the old Sales Empire strikes back. It's a power grab by a function that failed before.

    Stealing the thunder of my two minutes of "fame" on the upcoming Strikedeck Radio episode 100, I looked at the results of my 2020 CSPI benchmark survey. CRO's are on the rise as the exec responsible for CS. 2019 we had 25% CRO's, in 2020 we had 1/3.

    However, in the best-in-class Champion segment there was only ONE CRO, the rest all crowded the large Cruiser and Laggards segments with a 20% lower NRR.

    My call to action for CS leaders: Own the recurring revenue: renewals, upsell, cross-sell, and get comfortable tracking profits (and losses), LTV, NRR, … from first contact to EOL.
  • David Ellin
    David Ellin Member Posts: 170 Expert
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    edited March 2021
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    @Jeremy Mulder, while I agree with the comments to date, I'm going to go in a different direction. I've reported to CEO's, CRO's and CCO's (Chief Commercial Officers). My experience is that many CEOs are dipping their feet into CS and therefore, don't want to create a C-suite role (Chief Customer Officer) until they have more experience and understand the roles.

    My issues with the CRO or CCO (Commercial, not Customer) is that they have to represent the customer perspective during c-suite meetings. The last CRO I reported to only talked about prospects and pipeline in c-suite meetings and the existing customer perspective, issues, sentiment, recommendations, etc. were never represented. It just wasn't his focus.

    When I discussed this with the CEO, he said, "I never really thought about it that way but you raise a good point."
  • Jeremy Mulder
    Jeremy Mulder Member Posts: 26 Expert
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    edited March 2021
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    Enjoying the conversation. Thanks for the great perspectives here @David Ellin, @Andreas Knoefel, @Zeeshan Gauba, and @Ed Braunbeck.  

    My take on the CRO:
    We recognize the need to address the creative conflict between the focuses of Sales and Customer Success: short term vs long term. 

    But short term versus long term in what respect? 

    If the answer is $. Then we get the CRO. If the answer is relationship, the CRO is a bad-fit because revenue is a subset of relationship.

    If $ is the focus, then how should the company organize to optimize for this focus? Who should report to whom – CS into Sales or Sales into CS? What if we created a new role that both Sales and CS reported into and we called it: Chief Revenue Officer?

    This is a sufficient approach if $ is the focus. Can't get along? Here is your new boss to define the graph of revenue optimization given the relative strengths and weaknesses of Sales and CS.

    But this approach only thinks of $.  There are other answers to our question: short term versus long term in what respect?  

    And one of those is relationship: short term relationship (i.e. transactional) vs long term relationship. From this lens, $ is still a factor (closed-won, NDR, LTV) but not the sole focus.

    The role of the CRO makes less sense here as it under-addresses the relationship. By name, the Chief Revenue Officer is concerned with revenue first. The focus is internal: the company's need. The title CRO telegraphs to the world that the company feels its own need is so important that it will create a role at the highest level – the c-suite – whose mission is to ... keep an eye on revenue and make sure sales and customer success work together … to the benefit of … the company and its needs: revenue! 

    What does it say to the customer about what your company values? 

    • "We hear you, customer, and we think we can better serve your needs in the relationship if ... we solve our internal role clarity to achieve our plan to maximize revenue." 
    • "We hear you, customer, your problem has been escalated to the highest customer-centric person in our company: please hold while we connect you to the Chief Revenue Officer."
    With the CRO, companies are solving for our own needs, not those needs of the customers, or the mutual needs of both parties. We might as well change our mission to be first in every market by 2022. Customer's do not care about this … at all.  Customers do not care about your resources, they care about their transactions and outcomes and whether they can trust you to help them accomplish these now ... and in the long term. That's the reason to be in a long term relationship together.

    So, how might we telegraph to our customers our intent to prioritize and put in the work required to maintain and grow long term relationships? It going to be a long road, but these titles would be a start: Chief Customer Officer, Chief Success Officer, or the Chief Relationship Officer?

    Hi GGR community - 

    How do CS leaders feel about the Chief Revenue Officer role?

    Rather than leading with my own thoughts and experiences, I'm interested in yours.  

  • Zeeshan Gauba
    Zeeshan Gauba Member Posts: 5 Seeker
    edited March 2021
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    I have a different perspective on the role of the CRO and how they represent the clients' interests.

    At the end of the day, all companies need to make revenue to stay in business -- that is no secret. The CRO has a vested interest in the well being of clients because happy clients continue to bring in recurring revenue. So on one hand the CRO has to oversee new business revenue, but they are also responsible for preserving existing revenue.

    To say that they would not represent the clients' perspective in executive meeting is more to do with not having the right CRO vs the responsibility they have to preserving revenue. If you have the right personalities working together from head of CS and the CRO, it can work great! We are an example of that. I know from my own experience, we try and do right by clients truly because we want happy clients. And happy clients = continuation of recurring revenue.

    You are right @Jeremy Mulder, clients care about their interactions and outcomes with you. So as long as we continue to deliver on that, they definitely will not care who the head of CS reports to. Regardless of the title that makes the intent to prioritize the client known, the important thing is that the message does go out to clients, and that its the right messaging that resonates with your clients.
  • Jeremy Mulder
    Jeremy Mulder Member Posts: 26 Expert
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    edited March 2021
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    @Zeeshan Gauba Just wanted to say thanks for your contributions on this thread. Really appreciate your experiences and thoughts here. It's a tough topic and one that I both feel passionate about and think it will play a part in the future of Customer Success. I'm trying to lean into it and learn. Thank you for pushing me to consider multiple perspectives.
  • Zeeshan Gauba
    Zeeshan Gauba Member Posts: 5 Seeker
    edited March 2021
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    Thank you for hearing me out! Diverse opinions is what makes us better.