I was talking to a friend of mine the other day about an emerging opportunity he has within his company. Already a senior executive, he has been asked to take on a role that is totally revenue focused and will logically evolve into this thing called a Chief Revenue Officer. You are starting to see more and more roles emerge that have the letter C on the front end and O on the back end. Insert Strategy, Marketing, Revenue, Risk, Compliance, Customer, People or many other words in the middle. Often the title does not really describe the accountability. CMO and Chief Revenue Officer are examples where the CMO may only have one of the P’s [Marcom] and the Chief Revenue Officer really runs Sales. After our conversation, my brain got to spinning about the coolness of a true Chief Revenue Officer opportunity.
Common challenges we see, whether in the Fortune 500 or Fortune 5 Million, is that organic revenue growth is required. Not a nice to have, but required. Solid balance sheets have allowed many companies to buy growth, but have negative organic growth. The acquisition market is also getting very expensive again, with multipiers ticking up into the crazy range in some sectors. The need for growth always puts a lot of pressure on Sales Leaders and is one of the reasons the average enterprise Sales Leader has a shelf life of less than 2 years. The starting point or foundation for revenue growth [in my opinion] actually starts with your existing client base. The stronger or higher the recurring revenue base, the easier it is drive organic growth. Think of the cell phone or wireless industry. Phone companies used to have churn rates of the 20-25%. How hard is 10% growth when the leak in the boat is that big? A strong base of satisfied customers leads to retention, volume/price growth, cross sales, and referrals. One of our clients and one of the best run companies I have ever seen, has executed this playbook in their core business to perfection. 99% retention, 98% customer satisfaction, 3-4% annual volume growth, 3-4% annual cross sales growth and their customers are their biggest fans. Now, as you increase the volume of new business acquisition, organic growth happens. All easier said than done.
Put yourself in the position, where you don’t own a silo, but you have accountability for maximizing revenue across the organization. It forces alignment with marketing as you think about the Segmentation, Targeting and Value Based Positioning that will attract new customers to your unique value story. The same can be said for Product Strategy and Channel Strategy. It also forces both alignment with and enablement of the Sales organization. The Account Management organizations that drive the recurring revenue and growth opportunities with existing clients are often challenged. We see that they can lack timely, accurate information on their clients, systems, processes, tools and the business skills to help clients in ways that truly create value. What a great opportunity to break down the silos and to drive cohesive revenue strategy across the enterprise.
What if you also had a role in identifying strategic acquisitions that help innovate or fill in the “white space” where you may have product or services gaps? You get new revenue, but you also get new customers to cross-sell to, new skills, new IP, more capacity and potentially access to new markets. If you played a role in Partner strategies as well, you could accomplish many of the same things.
I was excited for my friend based on what this opportunity could become over time. Business is all about growth and revenue is the oxygen for a business. I believe the Chief Revenue Officer role, for the right people, in the right organizations, creates a magnificent opportunity to create near-term growth strategies that align the organization and focus execution priorities.Share