Back in 2012 Forbes dubbed the Chief Revenue Officer (CRO) “the CEO’s new secret weapon,” highlighting the importance of this role in C-suite leadership. Over the last decade the way we view revenue has evolved, paving the way for the CRO role to expand and flourish. In fact, Stephen Hurrell has forecasted that, “By 2023, almost one-quarter of organizations will establish a Chief Revenue Officer leadership role, focusing on all channels of revenue, not just direct sales.”
Anita Little explains the business rationale behind the rise in CRO roles when she says, “Businesses are realizing that to stay agile, strategic, and most importantly, sustainable, they need a CRO who can fold marketing, sales, and customer success into one seamless revenue machine.”
However, whether a company employs a CRO or not, it is still crucial to understand how revenue has evolved. Staying ahead of your competition requires a firm understanding of how to evaluate revenue, where digitalization has changed revenue generation, who should be included in revenue conversations, and what strategic revenue planning looks like in a post-pandemic world.
A New Framework for Evaluating Revenue
Before the pandemic B2B relationship building was done face-to-face in offices, at trade shows, and on showroom floors. When lockdowns took away the ability to connect face-to-face it created a significant shift in revenue strategy. B2B organizations had to figure out how to go to market without many of the strategies they had always relied on.
Digitalization led the way as many companies shifted to remote demos, self-service models, online purchasing, and app integrations. And as sales and marketing methodologies have changed since the pandemic, many organizations are still using an old framework for evaluating revenue.
Some have shifted to account-based marketing and niche marketing strategies, and others have simply digitized their old approaches. Companies that have been struggling since the pandemic hit are going after any accounts they think they can get, while businesses that are booming are too overwhelmed to stop and strategize. While this may work in the short-term, getting the most out of your best customers is the most effective way to grow your business and make it successful for the long-term.
As revenue strategy continues to evolve over the next few years, expect to see more organizations focusing on knowing their ideal clients and executing on the strategy that will help reach them more effectively.
It has always been important to put yourself inside your top clients’ personas to think like them so you can better market to, sell to, and retain them. But their needs have changed and the way they think and buy has changed as well. How will your revenue strategy shift to keep pace with these changes?
Before the pandemic digitalization was optional, which is why only some B2B organizations utilized it effectively. When the pandemic hit digitalization became mandatory to stay in business. Expectations shifted and clients began demanding the same from B2B that they were accustomed to from B2C. The result is that B2B organizations now need to play at the digital level, even if they have complicated or customized products.
The biggest changes have been in hard industry manufacturing because historically they have relied the most on in-person relationship building, which has led to some laggard behavior in digitalization efforts as they figure out what the new world of selling looks like.
But digitalization means more than simply helping prospective clients find you online and equipping your sales team to sell to them. Digitalization also encompasses the alignment of all sales and marketing activities to acquire customers seamlessly and retain them throughout their journey. Sales and marketing teams must be fully aligned because neither can exist without the other in a post-lockdown world.
If you have not digitized your B2B operation yet, you may have missed your prime window for doing so. The genie is out of the bottle, and it is not going back inside!
Your pipeline may soon dry up if you have not implemented the operational technology and digital strategy to adapt to this new world. Get your revenue development action plan formalized today to build sustainable revenue for tomorrow
Including the Right Personnel in Revenue Discussions
The cast of characters involved in revenue conversations at mid-sized to large organizations has remained largely the same over the years – the CEO, CFO, VP of Sales and CMO/VP of Marketing. While each of these executive leadership roles is well-meaning in their contributions to the discussion, none of them individually has the breadth of purview required to strategize about revenue with a completely balanced framework except the CEO and they cannot afford to focus their time solely on revenue as they are responsible for the rest of the business as well. This is the primary driver behind companies bringing in Chief Revenue Officers.
As an example, at a typical company the CFO is heavily focused on cutting costs and improving efficiency while the VP of Sales is focused on closing more leads and meeting quotas, and the CMO is focused on the right brand messaging in front of the right people. Someone needs to unify these various objectives in a way that is cost-effective, does not stymie future growth, and is sustainable. A CRO works with all of them to bring these goals together across the entire organization in a way that is more proactive than any single team can accomplish independently.
The introduction of a CRO has seen a dramatic rise in popularity over the last decade to provide a more objective approach to revenue strategy. And since the pandemic hit, a dedicated CRO role has become even more important in equipping companies with the strategic guidance they need to execute shifting revenue strategies.
The Evolution of Strategic Revenue Planning
Opportunities are not coming – they are already here. Understanding how revenue has changed and will continue to change is crucial for identifying new opportunities to grow your company.
In today’s business climate if you are not proactively looking for new opportunities, your growth is going to flatten and stall. When that happens your competition will outpace you, driving you into the kind of slump that you may not be able to recover from.
People used to say, “It’s only a matter of time before ‘the old way of doing things’ stops working.” But that time has already come. The old way no longer works. For companies to move forward these days, they must be forward-thinking and adaptable – evaluating as they go and making the necessary changes to stay ahead. That is what a CRO provides – a roadmap to achieving profitable revenue growth.
Predictions: What is Coming Next?
Stephen Hurrell asserts that by next year, “More than four-fifths of organizations will limit the effectiveness of revenue management with an incomplete view of a customer’s lifetime journey from lead, engagement, purchasing, onboarding, renewal and expansion.” However, even in organizations where there is no CRO role, revenue strategy is changing.
The name of the game these days is flexibility and adaptability because disruptions are likely going to become more frequent and more intense. Over the years we have pushed harder and harder and now we are finally getting ecological push back in the way of illnesses, climate change, and natural disasters. What we have seen since the pandemic hit is that this kind turmoil has very real business consequences and it is not going away.
As a result, we cannot fall back on the old way of doing things just because it is easier. For as much as digitalization has taken hold, we still have not found ways effective enough ways to develop, build, and maintain relationships virtually. This is where our next advances need to be to keep moving forward.