The Evolving Role of the Chief Revenue Officer

The position of Chief Revenue Officer (CRO) has been gaining popularity in recent years as companies seek to drive growth and coordinate go-to-market strategies across business units.

According to McKinsey, the number of CROs has quadrupled over the past five years. This rapid rise reflects the strategic value CROs can provide in today's complex and fast-changing business environment.

In the past, CROs were often tasked with specific revenue-related functions like sales, marketing, or customer success. But the scope of the CRO role has expanded significantly. Today's CROs are taking on a much broader, enterprise-wide mandate focused on improving commercial performance across the entire customer lifecycle.

They aim to connect the dots of the customer experience, strengthen alignment between sales and marketing, build high-performing revenue engines, and foster a growth culture.

Four Key Responsibilities of the Modern CRO

The key responsibilities of CROs that set them apart from traditional sales or marketing executives:

1. Architecting end-to-end customer journeys: CROs design seamless experiences that drive engagement across touchpoints like marketing, sales, and service. They bring a system-level perspective to mapping journeys and identifying friction points.

2. Implementing commercial-model transformations: CROs are assessing and evolving business and pricing models to meet changing customer needs. This includes transitioning from one-time transactions to recurring revenue models.

3. Establishing governance and cross-functional ways of working: CROs break down silos between departments to improve commercial performance. They facilitate collaboration through joint KPIs, integrated planning, and shared data systems.

4. Building a commercial capability engine: CROs focus on upskilling talent in sales, marketing, analytics and operations to drive greater revenue productivity. They bring a talent development mindset across these key functions.

CROs are well positioned to tackle these responsibilities because they oversee diverse revenue-driving areas and can coordinate multifunctional efforts to improve end-to-end value delivery.

CROs offer five key differentiating capabilities:

1. Revenue strategy acumen

2. Customer insights orientation

3. Team leadership and inspiration

4. Technology, analytics and data literacy

5. Enterprise and C-suite relationship building

For CROs to maximize impact, they should be empowered to make cross-functional decisions related to resourcing, investment, and KPI setting. Companies that limit CRO authority to an advisory role undermine their ability to achieve change.

Key Stats on High-Impact CROs

The McKinsey article provides insightful data points underscoring the results effective CROs are able to achieve:

• CROs have increased deal sizes by 15-30% by improving sales productivity and pricing strategies.

• Top CROs have lifted annual recurring revenue growth from low double digits to over 30%.

• Leading CROs have boosted customer satisfaction scores by 30-50% through customer journey orchestration.

• CROs have increased marketing ROI by 25-50% by optimizing spending and campaigns.

• CROs have lifted customer lifetime value by 20-40% through subscription models and retention programs.

These numbers highlight that a strong CRO can be instrumental in catalyzing growth. According to McKinsey, the earnings contribution from companies appointing a dedicated CRO grew 2-3X faster compared to companies without a CRO.

Key Steps for Maximizing CRO Impact

Based on their experience, McKinsey identified five steps organizations can take to ensure CROs deliver their full potential:

1. Clearly define CRO responsibilities and decision rights. Avoid ambiguity.

2. Incentivize cross-functional collaboration through shared KPIs and planning processes.

3. Invest in revenue operations capabilities in analytics, systems and tools.

4. Build an empowered CRO office with resources and skill diversity.

5. Ensure strong C-suite support for CRO initiatives and culture change.

Additionally, the article emphasizes that CROs themselves must focus on change management and influence skills to mobilize the organization.

The Evolving CRO Role in Driving Growth

CROs are taking on an increasingly prominent role, with a mandate extending far beyond traditional sales leadership. Leading CROs are emerging as enterprise-wide growth leaders, harnessing customer insights, orchestrating revenue engines, and building high-performance cultures.

While the CRO role is still evolving, its growing popularity and results speak to its potential impact. As companies look to reboot growth and adapt to changing customer needs post-pandemic, they may benefit from appointing – and empowering – a Chief Revenue Officer with a broad commercial mandate. Those who leverage CROs effectively can gain an invaluable advantage in today's dynamic business landscape.