In 2012, Forbes labelled the Chief Revenue Officer (CRO) the ‘CEO’s new weapon for growth and success’. A decade later, CROs are no longer ‘new’, but there is still much uncertainty about the role.
Although CRO hires are surging in popularity among b2b SaaS scale-ups and enterprise-level companies, they’re not right for everyone. In this guide, we will explain everything you need to know about Chief Revenue Officers, whether your company needs a CRO and how to hire the right CRO if required.
What does a Chief Revenue Officer (CRO) actually do?
According to Zorian Rotenberg, Chair of Pavilion’s CRO Group, a CRO is “the CEO of all global $ Sales & $ Revenue”. They lead a company’s revenue function, overseeing all revenue-generating activities, teams and processes, and provide commercial alignment across sales, marketing, RevOps and customer success.
“the CEO of all global $ Sales & $ Revenue”
In particular, CROs have three core responsibilities:
- Revenue accountability – CROs take full responsibility for driving revenue growth. They lead global revenue operations and own all initiatives that impact the revenue line, including P&L, commercial productivity and headcount. Sitting on the executive team, CROs report directly to the CEO and the board as the true voice of company revenue.
- Commercial apex – CROs are responsible for the company’s entire commercial function. They align the processes, targets and KPIs of all the commercial departments, ensuring a consistent focus and approach. They devise the commercial strategy, control the end-to-end customer journey and manage each commercial leader (i.e. VPs of Marketing, Sales or Customer Success), but not the individual contributors in those teams.
- GTM guru – CROs own the global go-to-market strategy. They use data and market intelligence to optimise the existing GTM approach (i.e. product marketing, pricing and ICP targeting) and expand the company’s total addressable market (TAM). They devise, manage and execute plans to acquire and retain new global customers, and also lead new market expansion and product launches.
Sitting above commercial leaders in the company hierarchy, CROs have considerably more responsibility than an individual commercial VP and command a salary package to match.
Why do companies hire CROs?
Given revenue is the lifeblood of b2b SaaS growth, it’s no surprise Chief Revenue Officers are in high demand, but what are the core benefits of hiring a CRO?
- Alignment – Instead of having multiple commercial VPs, all working in silos and focusing on their own KPIs, a CRO sits above them ensuring each team is working in tandem. This not only ensures the customer journey – from acquisition to loyal customer – is much smoother, but also makes revenue more predictable. In fact, research by Forrester found that aligning people, processes and technology can boost revenue growth by 36% and profitability by up to 28%.
- Optimisation – With a bird’s eye view over the commercial function, CROs are in a unique position to optimise performance and results across the revenue lifecycle. From analysing data and dashboards to choosing appropriate metrics and KPIs, CROs can improve operational efficiency, streamline commercial systems and create impactful strategies to drive future growth.
- Accountability – CROs are the single point of revenue truth and accountability. Like a modern day Managing Director without finance and ops, a CRO centralises revenue decision-making and reporting. This reduces the CEO’s workload – who no longer has to oversee multiple commercial VPs – and streamlines revenue reporting to the board or potential investors.
When should companies hire a CRO?
While CROs can deliver a range of benefits, they’re not suited to every company and hiring a CRO at the wrong stage can have far-reaching consequences. For example, if you hire a CRO too early, they may be unable or unwilling to do the scrappy work with individual contributors that needs to be done in the early stages of growth. As a result, most companies that hire a CRO will either be post Series B with a repeatable engine or a well-funded Series A with higher-than-average expectations.
Here are some core signs you’re ready for a CRO:
- Commercial VPs in place – CROs manage commercial leaders, not individual contributors in commercial teams. As you scale, you should build from the bottom up, starting with commercial managers, then VPs and finally C-level. For a CRO to make sense, you need to have the structure in place with VPs of Sales, Marketing, Customer Success and perhaps even RevOps, already overseeing individual contributors.
- Sustainable revenue generation – Charging a base salary of £150,000-300,000 depending on scaling stage and experience, a full-time CRO is an expensive outlay. As such, you need to have sufficient revenue generation and sound unit economics to sustain a CRO hire (and not cause the company to collapse).
- Complex commercial problems – If you have a simple transactional SaaS product or operate in a single market, you don’t really need a CRO. But, as soon as you start selling multiple products in multiple markets, a CRO can alleviate the added sales and marketing complexity (and take the reins if an expansion isn’t going well).
- Sales & marketing misalignment – Do you have a disjointed customer journey or leaky revenue funnel? Struggling to find accurate data on the customer lifecycle and understand customer bottlenecks? Are your sales and marketing leaders pointing fingers at each other? When sales and marketing are misaligned, it’s often time for a CRO.
- Lack of board experience – Often the most senior person in the commercial team is the sales leader, so you bring them to the board meeting. But, if your VP of Sales is out of their depth in the boardroom, being exposed by investors or tasked with doing something new (i.e. write a GTM strategy or compile an investor deck), it may be time for a CRO.
- Too much C-Suite – If there are several C-level positions already (CPO, CFO, CTO etc.) and you need a leader with gravitas to represent the revenue organisation, you may need to hire a CRO as a political move to ensure parity. If the CRO does not have the authority or gravitas to drive change, then there’s no reason for the outlay.
As some signs are more weighted than others, companies need a combination of them before hiring a CRO. For example, if your US expansion isn’t going well, but you have a small commercial team with no Head of Marketing, you don’t need a CRO.
What to look for in a CRO?
What to look for in a CRO?
CROs do not grow on trees. It’s a highly-specialised role, incorporating elements of a CEO, CFO and Head of People as well as the wide-ranging responsibilities of the commercial team. To ensure the right CRO fit, there are some key attributes, skills, experience and behaviours to look for.
- Data-obsessed – Revenue is a numbers game and CROs should be spreadsheet maestros with deep knowledge of data analysis and interpretation. Be it understanding CAC and the levers that impact this, analysing data points across throughout the funnel or listening to customer feedback and value indicators, a great CRO should be data-driven using a range of metrics and CRM insights to make expansion decisions and improve performance.
- Finance understanding – CFOs don’t tend to understand the revenue side: if they tried to build a commercial plan, the budgets would likely be too small to reach the desired goals. The plan would likely be focused on the outputs and be ‘top-down’ rather than the inputs (‘bottom-up’). As such, you need a CRO who can not only devise a commercial strategy, but also use historical data and benchmarks to ‘sell’ it to the CFO. That means owning the commercial P&L, taking responsibility for resource planning and liaising with the CFO over budget trade-offs.
- Global commercial experience – CROs are responsible for all revenue growth, so it’s worth looking for a candidate that’s increased global Annual recurring Revenue (ARR) before. For example, have they created, led and executed a successful GTM strategy? Have they restructured global sales teams, improved unit economics and increased Net Revenue Retention (NRR)? Can they back up all their experience with proven metrics and results?
- Investor/board experience – CROs are the commercial voice of the company and will represent ‘company revenue’ at board meetings and fundraising rounds. A great CRO should therefore have a strong track record of raising investment over the rounds you’re approaching. (i.e. Series B-C rounds) and the ability to sell a convincing growth story to investors.
- Effective change managers – From sales processes to marketing KPIs, comms plans to territory definitions, CROs drive fundamental change. As such, they need to be able to clearly articulate their plans, get universal buy-in from commercial leaders (and other C-level positions) and build strong relationships with key stakeholders internally (i.e. finance, HR and product) and externally (i.e. supply chain and partnerships).
- Visionaries – While commercial teams focus on short-term quarterly results, a CRO should also be looking to the company’s long-term future. Their decisions should balance short-term revenue needs (i.e. cash flow and customer acquisition) with long-term strategic direction (i.e. future revenue forecasting for expansion plans).
How to hire the right CRO?
Thanks to the unique cross-cutting role of a CRO, hiring a Chief Revenue Officer requires specific internal and external input at various stages of the 3-step hiring and onboarding process.
1. Align on requirements
In line with a CRO’s role, hiring a CRO starts with alignment. By getting the senior management team to agree on the priority areas to address and the core objectives to reach, it is much easier to define what type of CRO is required (if at all).
You should:
Engage with your executive team and other key stakeholders to define the job description, package, ideal candidate profile and interview process.
Create a comprehensive candidate brief, which highlights the current commercial challenges, defines the role accountabilities and sets clear objectives for the role.
Agree search channels i.e. which locations, industries and companies to focus on.
2. Search strategically
‘Trawl the network’ is the first port of call for most senior hires. While you may get lucky with this approach, a CRO is a much more nuanced role than hiring a VP of Sales. To ensure a highly qualified shortlist of exceptional candidates, you should first find out what ‘good’ looks and sounds like and then focus your search on specific channels.
You should:
- Speak to experienced CROs that aren’t trying to join your company, as well as CEOs and board chairs who’ve hired CROs at similar stages, to find out what works well and what doesn’t.
- Consult with an executive search firm that either has a wide community of CROs or a strong track record of placing CROs.
- Create a list of interview questions and an interview scorecard that probes the candidate’s suitability for the CRO role at your company. Ideally, questions should be competency based (also known as behavioural questions) that enable you to probe into specific examples rather than hypothetical situations. For example:
- Financial planning-related – What steps did they take to build the revenue plan in their previous company?
- Data-related – How have they used metrics most impactfully to make decisions that have improved unit economics?
- Strategy-related – How did they devise, manage and execute the go-to-market strategy for entering a new market in their last role?
- Culture-related – What concrete examples can they provide that demonstrate alignment with your company culture and values?
- Collaboration-related – What disagreements have they had with their CEO in the past and how did they handle these?
For more interview questions, check out Pavilion CEO Sam Jacobs’ 13 questions all CROs should be able to answer.
3. Set up onboarding success
To ensure the ideal candidate converts and has an immediate impact on the business, you should devise an onboarding process that sets up the revenue leader for success.
You should:
- Give them the authority to challenge assumptions, scrutinise the revenue plan, make changes and push back to the board, so they are not limited by pre-existing beliefs about the business.
- Set aside time for regular CEO-CRO and CRO-exec team catch-ups, so both sides can feedback on progress, discuss support needs and re-evaluate priorities (if required).
- Get an experienced CRO coach to support them for the first three months of their onboarding, so they have an external expert guiding them through the initial major decisions.
Benefits of ScaleWise
ScaleWise has an intimate understanding of CRO talent. We’re experts at candidate assessment (interviewed 750+ revenue leaders at VP level and above) and have access to ‘off-market’ candidates (i.e those considering their next move but not yet actively looking). After placing the right candidate, we provide free CRO coaching for the first three months to help successful candidates have an immediate impact, as well as ongoing support to your executive team.
“I was very impressed by how quickly the process moved, especially given the detailed requirements of the role. ScaleWise did an awesome job of getting a complete understanding of our needs, translating that into a comprehensive job spec and curating a shortlist of excellent CRO candidates.”
Jonny Day,
COO, Learnably
Should I hire a full-time CRO or fractional?
Do you need a CRO five days per week? With the growing popularity of interim and fractional commercial leadership, a fractional CRO working 1-3 days per week on a rolling basis may be better suited to your needs. Like their full-time equivalent, a fractional CRO sits on the management team and will lead the revenue organisation, but tends to focus on pre-defined goals, such as entering new markets or product expansion, instead of the wider full-time brief.
When hiring a CRO for the first time, it might be hard to know what model works best for you. Here’s three signs to help you decide.
Clarity – If you’re not 100% clear on what you need, it’s worth trying a fractional first. They can steady the ship and put out immediate fires, while also evaluating your requirements to create a detailed role brief for their full-time replacement. A fractional CRO can even lead the hiring process for the full-time CRO or may even join full-time themselves (35% of fractional/interim leaders placed by ScaleWise join full-time).
Change – If you think your needs might change soon (i.e. you have a Series B raise looming on the horizon), it may be worth plugging the gap with a fractional CRO until you know the lay of the land, as the level of investment and subsequent growth goals post-raise will determine what CRO you need. On the flip side, if you have a stable commercial team with leaders of sales and marketing that need support, it’s better to go full-time.
Budget – If you need strategic CRO support, but hiring a full-time CRO on a basic salary of £160-200k + benefits will cause drawbacks elsewhere, then fractional is the way to go (fractional CROs usually charge £1250-1500 per day for Series A to Series B). However, if you’ve recently received funding or have a strong cash flow, then full-time might be a better solution.
Case studies
Full-time - Learnably
With Heads of Marketing, Sales, Customer Success and RevOps already in place, Learnerbly sought a full-time CRO to manage their commercial leaders and oversee commercial priorities post Series A. This included owning the entire SaaS revenue line, expanding Learnerbly’s TAM (through US expansion) and driving sales velocity to double the platform’s user base.
Fractional - Mosaic Smart Data
Working initially 1.5 days per week (then two days), Mosaic took on fractional CRO Sophie Carter to build out their commercial function as they scaled post Series B. Sophie devised and implemented a clear commercial strategy, which redefined Mosaic’s ICP (leading to new qualified opportunities) and restructured the sales pipeline (cutting the sales cycle in half), and also ramped up the sales team (helping AEs and SDRs consistently surpass monthly targets).
Still unsure? Check out our
To CRO or not to CRO
CROs can seem like a silver bullet: the all-in-one solution for all your commercial and revenue problems. But, CROs need the right conditions in order to thrive. If you’re considering hiring a CRO, then reach out to ScaleWise first. We’ll provide a free consultation, evaluate your talent needs and help you decide what type of CRO (if at all) is required.