When your sales team contribute to the overall company strategy, expect a whopping 15% increase in revenue! If about 1 in 4 funded start-ups fail because they haven’t got the right team, it’s fair to assume that hiring a CRO to lead a sales team will increase your long-term chances of success.
Considering that the clear majority of CEOs in tech start-ups tend to be from a product-focused background, employing a CRO as part of your leadership team will give you a structured approach to revenue growth if you are looking to scale up.
What is a CRO?
CROs (Chief Revenue Officers) aren’t a new breed, although the role is ever-evolving for Fast Growth Tech companies. They are data-driven. Like that of a VP of Sales title, CRO’s must be astute with marketing and sales equally, alongside customer support, pricing and revenue management.
In a start-up’s embryonic stage, the CEO will be responsible for everything from product development, marketing, sales, customer success and beyond. However, a CEO’s passion in the tech sector tends to be focused on the quality of product, rather than monetizing a product.
Why hire a CRO?
In short, CRO’s take the pain away from CEOs when it comes to generating revenue. They ensure customer success (thus securing long-term revenue) and work alongside your marketing team to improve your brand and reputation.
A CRO will align your sales, marketing and customer success efforts – and will also act as a proven arbitrator between numerous client-facing teams.
Relationships between marketing and sales improve, where your leads will become more valuable. Afterall, 57% of the buying process is complete before speaking to a salesperson.
The love between sales and customer success will rise because the lifetime value of a customer will increase. When you create longer lasting relationships with your clients, your team will have more of a purpose. In that, employees are 3x more likely to work for a company with a strong sense of purpose.
When should you hire a CRO?
Your tech company will reach a point where you need a voice to help keep the growth on track.
You should hire a CRO at any point from the following:
- When your marketing team complain that sales aren’t closing.
- Your sales team complain that the leads are poor quality.
- When you lose customers for any reason. Either sales are overselling, or you’re not servicing those who are providing your revenue well enough.
- When the product needs focus, but you don’t have the bandwidth to concentrate on revenue/profit growth.
- When you can afford them!
How much should you pay to CROs?
Mind you, they’re not cheap… ranging from $100,000-$250,000 per year for basic compensation alone – not to mention the commission package and associated employee costs.
A bit of research will show that successful CROs are earning $3m+ through a mixture of salary and stock options. Keep in mind that if a CRO is earning that significantly, then your tech business will be in a very healthy position.
Peter Brzezinka, Director of Org3D says; “Hire a top CRO and do your damnedest to keep them. They are a key figure in the development of any Fast Growth Tech company and having worked with 100’s of start-up tech companies, I would suggest that you should budget for a CRO as soon as possible. We have a big network of CROs and would advise on next steps when you’re looking into hiring.”