As technology transforms enterprises, it impacts almost every single business function. In some cases, these functions also transform due to the new business paradigms. A typical example is the Chief Marketing Officer (CMO) leadership- fast becoming digital marketing leadership! However, in another direction, the Chief Revenue Officer (CRO) is taking up a new space with responsibilities that extend beyond marketing and sales. Organizations with both designations in their C Suite observe how critical both are to organizational growth.
But, as these are two different job and leadership functions, what are the similarities, differences, and imperatives of both of these designations?
A deeper understanding of these functions will show that they complement each other. Working together will drive the marketing, sales, and growth objectives.
Revenue Generation Is No Longer Linear
A few years ago, the CMO was accountable for all marketing functions. This meant that they were responsible for creating demand, driving leads, aligning sales and marketing teams, and driving growth. However, with the enterprise’s digital transformation, revenue generation is more than just a simple cause-and-effect activity. The number of revenue streams is now directly dependent on the enterprise’s digitization level. A completely connected enterprise world has opened up newer revenue streams and job profiles. The result is that revenue generation is more than just a direct result of great marketing or better sales. Leaders need to take a holistic view of opportunities.
The CRO role has become more prevalent to handle this new and more complex paradigm. This role goes beyond marketing and includes pipeline management, customer engagement initiatives, and sales- strategies. They need to provide a deeper alignment between marketing projects and sales. This way, they play a critical role in revenue generation.
The Critical Collaboration
However, despite the CRO role being an extension of the erstwhile CMO role, they still need to work collaboratively to achieve business results.
To succeed in the highly competitive market, the CMO and CRO must work together, unlocking synergies that will drive holistic growth. One big deciding factor has been the increased use of Big data and analytics. Today’s sophisticated data modeling techniques can open doors to better cooperation between the CMO and CRO. This will also create more revenue and growth opportunities than ever before.
Ground Realities and Expert Perspective
The CMO and the CRO play complementary roles in a company’s growth. Yet, CMOs mostly operate in isolation, with very little knowledge of what needs to be done after handing over leads. More bridges need to be built here.
Rachel Sterling, CMO, and Matt Overman, the CRO at Identity Digital, share their views on this, ” The CMO and the CRO should partner during planning to identify core levers to achieve significant business growth. Then both functions should work to achieve those goals,” they feel.
They feel that it’s crucial that a CMO and CRO work in tandem. “Often marketing can appear to feel ancillary to core business functions. This is especially true if marketing work is not directly connected with in-period revenue/business impact – and this becomes one of the primary reasons a marketing budget can be slashed during a downturn.”
This becomes a two-sided conversation between sales and marketing regarding the activities meant to generate pipeline activity for a revenue team. Marketing needs to understand the efficacy of leads that are being collected to optimize campaigns better and ensure lead acquisition is efficient and effective.
There are some activities that a new CRO would need to work with the CMO. “A well-functioning CRO works harmoniously with the CMO, benefiting tremendously from their utilization of new AI and other technology to automate and grow marketing capabilities. Quicker feedback loops with actionable insights have helped reduce sales cycles and identify areas where further automation can increase efficiency.” Rachel opines.
With digitization, CMO roles also overlap with CRO roles. How does that impact the revenue process? Digital avatars of marketing impact the CRO? Does it make things faster or slower?
Matt says,” There is an increasing overlap between CMO and CRO roles, which has led to even more collaboration between sales and marketing teams, resulting in streamlined sales processes, more efficient sales motions, and ultimately faster revenue generation.
A well-functioning CRO works harmoniously with the CMO, benefiting tremendously from utilizing new AI and other technology to automate and grow marketing capabilities. Quicker feedback loops with actionable insights have helped reduce sales cycles and identify areas where further automation can increase efficiency.”
The CRO gets market feedback on the product. The CMO gets market feedback on the messaging around it. Pooling these insights helps to make a better product.
Says Rachel, “Marketing” can be wrongly categorized as “advertising.” In many organizations, marketing is perceived only as the outbound channels in which messages are brought to market. But that’s only 50% of the marketing equation. Marketing also comprises inbound functionality: Product marketing, insights, and research. These core competencies are crucial to identifying what products and services are developed, which audiences should be targeted, the total addressable opportunity for those products/services, and the right positioning to bring that product or service to market.”
By partnering with a CRO, a CMO can leverage engaged customers to inform the inbound function of marketing better. Consequently, a CRO can benefit from partnering with a CMO in this area to expand the limitations of their existing customer base.
Is there a trend for the CMO to work towards a revenue-driven CRO role as a natural progression?
Rachel says CMOs are jacks of all trades and can move within many functional areas of an organization: Business/Revenue, Operations, and the executive function. “Because there are so many facets to being a CMO – most tend to gravitate towards the functional area where they first learned to be a marketer. That genesis informs the natural progression of where a CMO charts their career path once they graduate from the role,” she adds.
The on-ground reality in many organizations is that where there is a convergence of skills, it produces better opportunities for both roles.
The winner is the enterprise!
CMOs bring deep insights into their market, customer behavior, and preferences. The CROs have a very statistically driven view of their market, are more reliant on analytics, and, hence, have newer opportunities for revenue generation. Working together, they can jointly add much more value to the business. Here are some ways how they can do that:
- Support each other on customer lifecycle Leverage: CMOs can trace a customer’s buying journey and strategize accordingly. CROs have analytical tools and skills to box them into opportunities at any point in their journey. Working together, they can create a far more fruitful customer journey analysis. This will help create the base for new products, services, solutions, and the market. CROs also have insights into the risk data of their customers. Technology companies, for instance, are in a position to monetize the data, or they can create segmented offerings and financial packages that support all customer segments.
- Deriving Deeper insights into customer behavior: CMOs have the inroads into customer communications that CROs don’t, typically. They know the flex points when the customer gets delighted or frustrated. These bits of information can support the analytical CRO in gravitating towards decisions that will add to the bottom lines in the long run.
- Relevant Messaging Trumps all: CROs and CMOs working together to design better customer service or offerings and navigate through effective communication strategies. Marketers gather insights during continuous conversations with their customers, which can help CROs predict the strategy outcomes and plan messaging accordingly. This can be a cycle of predictive strategies that ultimately empower the CRO and the CMO. The outcome is better revenues and company growth.
But yes, there is always that race to the Seat at the Board.
As leaders, Matt and Rachel feel that CMOs and CROs are valuable additions to boards, and both should be included to ensure boards provide well-rounded advice to the companies they support.
“The type and maturity of the organization largely drive board dynamics.
A CRO must be present on the board for a publicly traded, mature company that needs to report quarterly on earnings. This role will help analyze capacities to hit revenue targets and be able to assess the health of the business pipeline,” they agree. “For a VC-backed startup, where rapid growth is crucial, adding a CMO to the board is imperative. This CMO will be able to advise the company on how to maximize their outbound marketing efforts to ensure rapid growth while also leveraging inbound marketing to support product development and future evaluation.
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