Every company needs a CRO, a chief revenue officer
CEO, are you aware that thousands, if not millions of dollars, of your company’s dollars are being wasted?
Your business today experiences millions of dollars in waste stemming from a single, simple source: lack of integration between function groups such as product development, customer operations, marketing, sales, and corporate communications.
Most of the work or people involved in these five broad function groups interact with your prospects and customers every day. This is where the rubber of your investments and efforts meets the road of purchasing decisions.
To the extent that all of these interactions do not work together to form and amass a single, common value proposition that constantly develops and cements preference over competing products in the minds and hearts of your prospects and customers, in that measure there will be waste. . Systemic residues.
And to the extent that there isn’t someone in the company who is responsible for all functions of the company that can directly influence revenue, this systemic source of waste will remain.
You are thinking. I already do this. I am already that someone. No. That someone you cannot be you. You are responsible for much more than this. As CEO, you are primarily responsible for increasing the value of your company’s stock. The value of your company’s stock is primarily determined by market analysts who cover the product category your company is in. And while the likelihood that your company will continue to grow revenues in the future contributes to your assessment, there is another important factor that they consider in judging your company’s profitability in the future.
Market analysts’ recommendations regarding your company’s stock price are determined primarily by their judgment of the likelihood that your company can guarantee earnings growth on a sustainable basis. And earnings are not determined solely by income. Earnings are determined by both revenue and expenses, that is, the costs incurred by your business. Therefore, to do your job well, you must focus on costs as well as revenue.
Aside from costs, revenue is the single most important determinant of your company’s profits for years to come. But right now, no function in your company is responsible for revenue. Right now, there are at least five functions in your business that directly influence customers’ perceptions of the relative value of your offerings versus those of your competitors. And most of these functions aren’t even responsible for your company’s revenue.
Currently, Sales is responsible for revenue, while the other four functions are believed to be responsible for other deliverables, such as “making the best products,” solving customer problems, facilitating product access and competitiveness, and building the most favorable image for the company. Surely you can see that this is not enough to integrate all the functions that directly influence revenue, to work together optimally.
We recommend that you institute a new function in your company with a mandate to oversee and integrate all of these functions to work together and put an end to all of the perceived loss of value resulting from the inconsistent perception residue that each of those functions leaves behind in the mind. of customers. And we recommend calling this new role – Director of Revenue.
The Chief Revenue Officer, or CRO, being accountable to you for increasing your company’s revenue for years to come, will be forced to ensure that all the functions involved in revenue generation work together consistently and seamlessly. drawbacks, and this will at least minimally reduce the likelihood that functions that directly interact with customers, and thus influence revenue, may be working at cross purposes with one another.
To ensure that your new CRO can perform well from the start, it’s also helpful to consider that all functions that directly influence revenue have a second functional impact: namely, the inherent communication function that builds and accumulates to become the perceived value of your offerings in the minds of current and potential customers.
To perform this new integrated function well, your new CRO must understand two things:
1. The perceptual residue generated by all company functions that interact with existing or potential customers is the primary driver of their preference for your offerings and determines your revenue.
2. He or she has to reorganize his or her income maximizing efforts according to their sources, ie, as the income obtained through existing customers, and the income obtained by converting the customers of their competitors.
Such a reorganization of revenue streams will allow you to ensure that the brand communications impact of the above five business-facing functions are integrated in a customer-facing manner that optimizes customers’ perception of the value of your offerings. customers and prospects, and maximize your preference for them.
Go ahead, be an innovative pioneer. Get or develop a chief revenue officer for your company, if only so you can stop worrying about all that waste your existing structure is absorbing from your own performance as CEO.