CRO 1.0 vs. 2.0

The role of the Chief Revenue Officer (CRO) has undergone a significant evolution in recent years, shifting from a focus on driving new business and acquisition growth (CRO 1.0) to a broader focus on customer lifetime value, retention, and recurring revenue (CRO 2.0). This shift has been driven by changing market conditions and underscores the need for CROs to align themselves with overall company goals and adapt their skills accordingly.

CRO 1.0: The Old Model

In strong economic climates and bull markets, the predominant model for CROs was centered around new business acquisition and pipeline generation. CRO 1.0 profiles tended to have backgrounds concentrated in:

• Sales Development

• Account Executives

• Sales Operations

• Sales Engineering

Their core responsibilities aligned with driving new sales and expanding market share. Much of their time was spent overseeing teams tasked with prospecting, converting leads, and closing net new business.

While important, this narrow focus often failed to account for longer-term revenue potential through customer retention and maximization of customer lifetime value. It prioritized new customer acquisition over working with existing customers to expand usage, prevent churn, and identify upsell opportunities.

CRO 2.0: The New Model

As markets shifted and the global economic landscape changed, weaknesses in the CRO 1.0 approach became apparent. Growth at all costs was no longer viable or rewarded by investors. Markets began demanding efficient, profitable growth oriented around recurring revenue streams and customer lifetime value (CLTV).

This necessitated a change in the CRO profile towards executives who took a more holistic view of the customer lifecycle and revenue generation across the entire customer journey. Leading CROs today (CRO 2.0) have backgrounds spanning:

• Product Marketing

• Demand Generation

• Customer Success

• Digital/Online Sales

• Training/Customer Experience

• Support

• Implementation/Onboarding

• Revenue Operations

• Account Management

• Renewals/Retention

• Channel Partnerships

With oversight frequently extending into professional services, post-sales, and customer marketing. The focus has moved from purely acquisition to:

• Customer Outcomes

• Value Delivery

• Net Revenue Retention

• Gross Revenue Retention

• Expansion/Upsell Revenue

• Renewal Revenue

• Cost Efficient Revenue Growth

This realignment reflects the importance of customer experience, satisfaction, and loyalty in driving recurring long-term revenue. Leading CROs are also now bridging gaps with marketing to develop strong product marketing competencies. They understand effective demand generation, how to build robust pipelines by creating top-funnel awareness and engagement, and leveraging areas like ABM. While their focus remains on the broader customer journey, CRO 2.0s recognize that marketing plays an integral role within that and requires cross-functional collaboration. Developing expertise in concepts around segmenting audiences, crafting targeted messaging, executing multi-touch campaigns across channels, and measuring ROI are becoming increasingly vital.

Bull Market CROs vs. Bear Market CROs

In boom times, CRO 1.0 profiles focusing purely on hypergrowth and new business acquisitions could find major success. But in downturn markets, their skills become less adapted.

CROs who can analyze and maximize end-to-end customer journeys, improve retention and loyalty, identify expansion opportunities, and drive efficiencies have become invaluable. With expertise in areas like gross retention and net revenue retention, they are best positioned to help companies thrive in bear markets.

Adapting Skills and Mindsets

The takeaway for CROs and aspiring revenue executives is to recognize that markets create and change roles. Mindsets and abilities that led to success previously may need to adapt based on new conditions.

Developing expertise across the entire customer lifecycle is becoming critically important. This means building skills in customer-centric areas that may have been under-prioritized previously, like retention, expansion, and renewal management.

Companies also need revenue leaders who can strike the right balance between acquisition growth and maximizing lifetime value. This starts with embracing a truly customer-first mentality.

By adapting their skillsets and strategic outlook, forward-thinking CROs can drive revenue resilience and continue creating value during turbulent times. The market rewards executives who can evolve.