- Unlike a traditional VP of sales, CROs are responsible for the entire customer lifecycle.
- 2020 forced companies to accelerate go-to-market strategies and look for innovative ways to increase sales and decrease customer churn.
- Technology is key to manage prospective and current customers’ journeys.
There’s never been a better time to be a chief revenue officer (CRO). In 2021, silos between customer-facing functions within organizations are coming down, to the benefit of customers and profitability, says Jen Spencer, who holds the CRO position at marketing firm SmartBug Media.
“This one team is aligned with the customer experience overall,” says Spencer, “from before the customer even knows who you are, to identifying their pain points, converting them into a lead, moving that lead through the sales pipeline, becoming a customer and then figuring out how to create a flywheel effect with that customer to both increase wallet share with them and use them as evangelists to attract new customers.”
Traditionally, organizations have had VPs of sales with counterparts in marketing and customer success. These are peers working together toward a common goal, but within their own domains. In her role as CRO, Spencer oversees all three functions under the umbrella of revenue operations, or RevOps. That ensures cohesion and clarity of vision. Her mandate: Create strategies that further blur the lines between sales, marketing and customer experience to win new logos, create upsell and cross-sell opportunities and drive predictable revenue growth.
With the right application of systems, processes, data and people, Spencer says, CROs can maximize revenue opportunities in the coming year and position their organizations for scalable growth and profitability.
It’s all about a holistic customer lifecycle focus.
For example, particularly in a services-driven firm or an organization built on residuals, where customers have to be re-won every month, retention is a critical revenue driver. Excessive churn will throw a wrench into growth. CROs in companies dependent on monthly subscriptions and recurring pricing models and looking to scale up to the next level must take responsibility for keeping customers from jumping ship.
Here we’ll discuss how, exactly, that happens in context of what two CROs see as their biggest operational imperatives for 2021.
Blake Wetzel: COO and CRO at TeraGo
TeraGo is a managed network services provider that meets the technology needs of businesses across Canada. Blake Wetzel has held strategic leadership roles for the past 20 years at industry-leading telecom, cloud, data center and IT companies.
Jen Spencer: CRO at SmartBug Media
SmartBug Media is an inbound marketing agency specializing in strategy, design, web development and more. Over her career, Jen Spencer has built demand generation and sales enablement programs for businesses ranging from startups to publicly-traded companies.
Optimize Tools and Processes
Sales and marketing teams have more advanced tools than ever, from customer relationship management (CRM) systems with all their bells and whistles to marketing automation platforms. These systems help automate customer retention efforts, optimize customer lifetime value (LTV) and automate and consolidate many time-consuming and disconnected tasks for better operational efficiency.
Still, these tools, despite — or maybe because of — their comprehensiveness, work best with cross-functional training and education, as well as tight integration with one another and clear communication across teams. When these tools aren’t fully exploited or are run in silos, it impacts data quality, creates bottlenecks, presents opportunities for manual errors and often results in duplicate work.
“We expect so much more from our technology, and that’s really what revenue teams are looking for: How can we do more with our existing team?” asks Spencer. “It’s the old saying that everyone wants more, better and faster, and you can only pick two. In these little ways, we look for opportunities to do more, better, faster. That’s where automation and more sophisticated tools are enabling us to be successful.”
Blake Wetzel, chief operating officer and chief revenue officer at managed network services provider TeraGo, says three systems and processes are top of mind for 2021: CRM platforms, enterprise resource planning (ERP) software and a net promoter score (NPS) or customer satisfaction (CSAT) measurement process.
Where your CRM manages customer-facing interactions, your ERP manages back-end office functions, including supply chain, cash flow, project management and human resources. Even if your CRM and ERP systems are from different providers, it’s beneficial to have them tightly integrated so the two can share data to a central repository. If a salesperson enters a sale into the CRM, for example, it reduces friction if that data is automatically processed through the inventory management functions in your ERP.
For Wetzel, the most important item his ERP tracks is billing.
“Who’s billing, what are they billing, what do they owe you, where are the billing issues?” he says. Blips in these transactions are early indicators of what a customer may perceive as a problem. That ERP also helps with contract management. In a services- or subscription-based business like TeraGo, says Wetzel, you have to stay on top of contract renewals.
Wetzel and Spencer both say that over and above any system, tool, process or workflow, a robust CRM is critical to RevOps strategies. CRMs manage all the ways a customer interacts with a business and chronicle the client lifecycle.
Still, companies need to actually initiate those customer relationships. So how do you get to decision-makers, especially when you’re selling B2B?
Wetzel says that too often, businesses find that they’re “single threaded” into a customer.
“A lot of times, we’re working with operational people,” says Wetzel. “Well, how do we get to the finance heads? It gets back to positioning your message. I could create a campaign that focuses on the CFO. If I go to the same company and focus on the CEO, that’s a very different message.”
He likes that challenge of figuring out how TeraGo can expand awareness with a customer’s key executives and says it’s something CROs struggle with all the time: How do we get the right message to a different party inside of the same organization?
CRMs, especially those that include integrated sales force and marketing automation tools, facilitate that process by getting better analytics about whom to communicate with and the right vehicle to reach the target decision-maker. In fact, there simply isn’t a substitute for a full-functioned CRM platform for companies committed to doing RevOps right, particularly when it comes time to scale. More on that later.
Profile of a CRO
It’s a chief revenue officer’s responsibility to take a holistic view of the customer lifecycle, from identification to acquisition to retention.
Salary: $187,890 on average per PayScale; range is $120,000 to $260,000
Traits for success: Data-driven, forward-looking, enthusiastic about technology, able to assemble and manage multidisciplinary teams.
Purview: Responsible for the company’s revenue streams.
Org chart: Reports to CEO, often has heads of IT, sales and marketing as solid or dotted-line reports. Works hand-in-hand with CFO and COO.
Spencer agrees that a CRM is the heartbeat of any RevOps organization — it’s at the center of everything they do. She’s seen companies with ecommerce businesses that are just focused on driving people to a website, processing transactions and payments and shipping products, all of which are doable through ERP. But when these companies try to upsell customers or track spending trends, there’s a gap in the data that’s impossible to go back and fill.
A CRM doesn’t have to be blown out with all the bells and whistles, but CROs need a structure in place so they’re able to track sales and customer success, and, just as important, actually do something with those insights versus be in a situation where they don’t have the data and are basically stuck.
Even a basic CRM is a strategic advantage, but Wetzel says that if a company can afford it, it should tie its CRM to a cost-effective predictive analysis tool or upgrade to a system with such capabilities built in.
Spencer agrees on the upsides to advanced analytics functionality. One example? A CRO can identify ideal target accounts, then use the analysis engine to find other accounts that match those characteristics, allowing you to “rinse and repeat” that query.
“You do that homework once, and then you find all of the target accounts you’re looking for — but it’s only as effective as your strategy,” she says. Make sure your initial queries are specific and get at exactly what you’re looking for, not a haphazard guess at target account characteristics.
“If you don’t do your due diligence and your homework the first time and you put junk in, then it’s going to recommend more junk,” she says. “It has to be done thoughtfully.”
CROs aren’t just concerned with making the sale. They’re just as focused on customer retention. After all, it doesn’t do much for revenue to boost new logos by 50% if a company also has a 50% churn. Tracking customer satisfaction or net promoter scores is critical to keeping a healthy customer lifecycle.
CROs need to do more than just measure scores, however. They need to act quickly when issues arise.
“If we’re getting a survey back from a customer and they’ve had a bad experience, we rally around that,” says Wetzel. “Who picks up the phone? How do you make sure that not only is their issue resolved, but they understand you know their experience is not what you hoped for? Then you take that back as a services process improvement loop, which we do very actively here.”
That strategy is working: TeraGo has an NPS score of 70, which is relatively high for a services company. Many of these firms get bogged down in the mid-40s. TeraGo has a “tiger team” that attacks every detractor survey to identify exactly what’s at the root of complaints. Is it a training issue? A process issue? A systems issue? What created the problem, and is it something that could potentially affect other customers?
This exercise enables businesses to identify problems that might interfere with growth. And if that discipline is ingrained in a company at the beginning of its scaling efforts, it becomes part of its DNA.
Customer Experience: The No. 1 Priority
That’s why customer experience has to be at the heart of a CRO’s mandate, especially for recurring revenue companies. You can’t create upsell and cross-sell opportunities unless you have close relationships with existing customers.
The pandemic created revenue-generation challenges for many companies, but it also created real opportunities to deepen customer relationships and spark conversations about innovation and evolution.
“We leveraged the challenges of Covid to create future selling opportunities and build deeper relationships,” says Wetzel. “We built trust with customers as opposed to some of our competitors that took a harder stance.”
TeraGo figured it was worth taking a hit on short-term financials. By delaying payments and giving credits to some customers, the company has become a truly trusted partner. Wetzel says it might be a little late to turn Covid to your advantage, but the point is that you need to recognize unique opportunities.
And don’t wait for a crisis. Spencer says just having conversations about how customers can innovate is worth the CRO’s time, even if they don’t immediately act on your recommendations. SmartBug, for example, works with a manufacturing company that, during the pandemic, began to explore the idea of moving into ecommerce. It’s something that had been on the radar for a while, but the realities of Covid made it a much more imperative conversation.
The manufacturer didn’t end up launching an ecommerce initiative, but that wasn’t so much the point, says Spencer.
“The conversation moved ecommerce much higher up on the list,” she says. “It’s about how to look for these opportunities. What additional channels was your mind opened up to? And how are you using them?”
For Spencer, the point was to engage in a dialogue with that customer that lays the foundation for future engagements. It’s about creating a feedback loop for customers and proactively acting on that feedback to reduce churn.
Wetzel and TeraGo took a similar approach by instituting regular conversations with customers to understand their pain points and what’s happening with their businesses. How did 2020 force them to change their models?
TeraGo wants to help customers through that transition.
“One of our big verticals is distribution, which changed from packaging and distributing to the big box stores to now packaging on behalf of those big box stores to ship to individuals,” he says. “Their whole distribution process changed dramatically. We were there to help them understand what that change needed to be. We started tweaking the solutions that we put in front of them to help them through that evolutionary process.”
TeraGo helped these distributors meet the needs of remote workers, but most importantly, says Wetzel, it framed that shift as rethinking how to approach remote IT infrastructure management. These customers required better office productivity and collaboration tools, so TeraGo quickly activated sales and support teams to meet customers in remote locations. While unified communications as a service (UCaaS) and managed network services were already critical components of the solutions it offered, the pandemic forced IT organizations to accelerate product development roadmaps, to meet customer needs more quickly.
TeraGo also realized that it wasn’t just its customers that needed help; it was also their customers’ customers. It adjusted its offerings to help these distributors handle different, heavier workloads in the cloud, which in turn helped their customers more easily manage their own compute environments.
Customer Experience Explained: A consumer-centric approach leads to happier customers, who, in turn, become more loyal to your brand, delivering increased revenue. Here’s more on how to craft an excellent customer experience.
Support Scaling Efforts
A big challenge for growing businesses is gearing up to scale. It isn’t enough to churn out products and services anymore — you have to be equipped for growth. Having the right tools, systems, process and customer experience strategies helps, but the goal of the CRO is to think big and holistically about the logistics needed to scale up.
“If you’re doing consumer goods, are you prepared for production and distribution growth? In services, can you handle the growth of the number of customers and to serve them well?” asks Wetzel. “As your company grows, the priority should be to deliver products or services at the same or better quality than you’re known for.”
Wetzel sees automation as key to scaling efforts. At $10 million, companies may be able to handle orders, implementations, quoting and other current demands on the business with current staff, tools and capacity. When they begin to capture more market share, platforms like configure price quote (CPQ), ERP, project management systems, inventory management and procurement need to be automated, if you expect to do more with the same human resources.
Spencer admits that SmartBug’s growth was slightly hampered because it was late to the game with its own CRM, ERP and other systems adoption and integration. For 2021, her goal is to “become a well-oiled machine.” SmartBug knows how crucial technology is to revenue growth strategies because it’s dealing with the fallout of not having it earlier.
“We have a project management system that hasn’t been integrated with our CRM,” she says. “We get to this point where we’re looking to scale, and we have all these ideas of things that we want to accomplish, customer marketing campaigns we want to run, NPS and CSAT processes we want to put in place. But we’re limited because we don’t have the data.”
It’s a common problem for smaller businesses looking to break into the midmarket. At a certain point, you have to press pause to get operations to a maturity level to support scale. This, says Spencer, is why even in the most successful companies, you see S curves in growth patterns.
“You have to take breaths; you can’t just keep going as fast as you possibly can all the time,” she says. “It’s the nature of growth. It’s what you do when you’re taking those breaths. Where are you putting your time and energy so that you can sprint again?”
Create Cohesive Vision, Strategy Across Functions
“I’ve seen a lot of cases where there’s a VP of sales, a VP of operations, a VP of marketing and a head of technology,” says Wetzel. This creates silos that impede go-to-market activities. “A CRO pulls all those things together. Particularly in growing companies, the CRO brings linkages across those functions.”
According to Boston Consulting Group, top B2B tech companies that effectively utilize RevOps to accelerate growth experience 10% to 20% increases in sales productivity, as well as:
- 100% to 200% increases in digital marketing ROI
- 10% increases in lead acceptance
- 15% to 20% increases in internal customer satisfaction
- 30% reductions in go to market expenses
BCG warns that a couple of challenges arise here. Alignment can be iffy, so the CRO should tackle reporting lines and team workflows. Trust can be low between teams, so the CRO should start small with a partial centralization.
Effective RevOps strategies push to blur the lines between sales, marketing and customer experience. That’s critical because customers want a singular focus no matter the delivery mechanism.
“It’s finding the right tools to be able to get the right messaging across,” says Wetzel. “Direct sales, social, email campaigns — having so many channels is a challenge because they all require different messaging strategies and customer data.”
In 2020, TeraGo, like many organizations, adopted account-based marketing, or ABM. The company had a large customer base but lacked understanding of which accounts were ripe for upsell or cross-sell outreach. Wetzel and his team moved resources from social and lead-generation campaigns to ABM because of its higher ROI. TeraGo is doubling down on ABM for 2021.
What Is ABM?
With account-based marketing, executive stakeholders in high-value or growth-potential clients are approached one-on-one, with hyper-personalized proposals, as opposed to a seller developing customer personas and assigning accounts to those buckets, then marketing standardized bundles.
A good example of ABM from TeraGo, which is an IT services organization, is opportunities surrounding productivity software. Adoption of Microsoft Teams skyrocketed in 2020 as the world moved to videoconferencing in lieu of meeting face-to-face. Wetzel realized that he could open a conversation with Office 365 as a path toward selling value-added services, such as backup, storage and disaster recovery.
The key is to avoid a shotgun, or even persona-based, approach to sales and marketing in favor of a targeted strategy aimed at finding the right conversation for the right decision-maker in the right organization at the right time.
“We have a big enough base where we can start with our existing customers, trying to expand their awareness of our portfolio of services,” says Wetzel. “It’s been very well-received — we’re north of a 50% success rate with those conversations. We have a 26% open rate on our communications to these customers. It’s huge.”
CROs need to take the lead in refining messaging so that it hits on the customer’s specific challenges rather than just blasting information about a product.
ABM requires different success metrics. Within its marketing automation platform, for example, TeraGo measures the number of meetings that marketing secures for the sales team in order to judge the effectiveness of marketing strategies. Where once securing meetings might have been seen as a metric to hold sales accountable to, it now becomes a marketing KPI.
The Bottom Line
2020 forced CROs to reevaluate their channels and ask how their companies should go to market in the most effective and efficient way possible. If you were a manufacturing company, and you primarily got in front of your audience through expos and trade shows, that was taken away from you last year. If you wanted to survive, you had to evolve.
In Spencer’s view, this wasn’t an altogether bad thing from a business POV.
“As much as I don’t want to say that 2020 was good, it did force people to innovate more quickly and to adapt,” she says. “People who maybe were holding back on investing in digital, they had to do it last year because there was no other choice. What I’ve seen in talking with customers and prospective customers is, they’re seeing a better ROI now than they were before, even though they were strong-armed into going down this route.”
In 2021, as restrictions are removed, both warn against reverting back to the way things were. That’s not progress.
Successful CROs will look at how to blend what was successful in the past with what they’ve learned in the past year and what they predict will work moving forward. What additional channels became suddenly feasible? How are you using them? How are you communicating with your customers? How are you creating a feedback loop for your customers, and what are you doing with that feedback?
Last year, people realized they need to be focused on churn because, in a lot of cases, that KPI moved in a decidedly negative direction. Now they’re looking for ways to better communicate with customers to increase stickiness because it’s less costly to keep clients than it is to attract new ones. That’s where CROs have an amazing opportunity this year and beyond: to blend the old with the new and open up minds to what else might be possible.