Every Chief Revenue Officer Should Implement these 3 Key Strategies
Discover three key strategies that will help chief revenue officers create a profitable revenue model and increase efficacy.
As a chief revenue officer, your job is to deliver a profitable revenue model. Some say that a chief revenue officer is responsible for delivering revenue streams, but an effective CRO looks at things holistically. You don’t want to bring in revenue that your team can’t service profitably. You want to deliver profitable revenue.
Read on for key strategies (and tips from other CROs) that you can use to create a profitable revenue model for your company.
Always Remember to Look at the Big Picture
When you design the systems (including the processes, technology, and the people) that maximize the flow of new customer acquisition, you should look at the big picture. The flow of acquisition is important because your goal is to bring in new business through your pipeline without adding costs.
Don’t just look at where you might acquire new customers in the system, but look at the flow of the acquisition and where there are constraints.
For example, a constraint could be lead conversions on your website. Conversion rates might be down. You could see a lot of leads, but they’re unqualified. This is going to bottleneck your sales team.
Or, you may find that your sales cycle takes six months. That’s going to fill up your sales team’s active pursuits because there’s only so many they can handle with that large of a sales cycle.
The maximization of the throughput is key for a chief revenue officer’s success. It’s not just a function of driving sales, it’s maximizing the sales to drive profit.
How Do You Create a Profitable Revenue Model?
In order to create a profitable revenue model, you need to design marketing, sales, and customer service processes, systems, and people that maximize the flow of new customer acquisition. When you focus on the flow, you’re able to look at the whole operation, understand where constraints exist and work to open them up instead of focusing on any one silo of the business.
What does a chief revenue officer need to do to ensure marketing, sales, and customer service are working together to maximize the flow of acquisition?
1. Create and Implement Effective Marketing Strategies
As a chief revenue officer, you should be concerned with customer acquisition costs (CAC) and create marketing strategies that will bring in business for the lowest cost of acquisition.
Tim Gallagher, CRO of the Moonshoot Group, first approached Flow when he was looking for marketing help. Despite the fact that the Moonshoot Group already had a website, brand guidelines, and a CRM in place, they kept receiving enormous proposed costs on executional strategies from other companies. For instance, their website costs were estimated at $30,000. The proposed content creation strategy would require their C-suite to spend hours and hours writing and publishing articles, creating a constraint on their ability to deliver revenue.
Flow’s methods were able to cut down both of those costs. First, our team took a look at their pre-existing brand guidelines and created copy that could be updated on their existing website. Instead of redoing the entire website, we simply redid the copy so it aligned with the new product they were introducing into the marketplace.
This drove down their website costs by 90%, from $30,000 to $3,000. They were then able to redeploy some of that money into strategies that would drive revenue.
Secondly, Flow implemented a time-effective content marketing strategy. We phone interviewed their internal and external experts and created high-quality content from these interviews. This content was not only distributed on their blog, which drove website traffic through SEO, but could also be featured in trade magazines that their target audience reads.
Our strategy leveraged their C-Suite’s time. We surrounded them with a strong team: our COO, creative director, a dedicated writer, a graphics team, a social media distribution team, and a data analytics team. By providing this team, we were able to fully support their marketing strategies so they could drive qualified leads to their salespeople.
Content marketing is one of the greatest strategies that a chief revenue officer can use, but there has to be a strategy around how that content is being created as well as distributed. Your goal is to maximize the expert’s time and increase throughput on how much content the experts can create.
According to Tom Brinegar, Vice President and CFO of PEAK Resources, Inc., your thought leadership should go beyond content and be at the heart of your company.
“We took on a rebranding strategy about 18 months ago and really focused on who we are and where we have expertise,” Brineger said. “This has led to a more genuine representation of our company and culture that has resonated with clients, prospects, suppliers, and employees.”
2. Drive Sales
As a chief revenue officer, you’re responsible for establishing a proven sales process that aligns with the buyer’s journey. You’re providing information and content each step of the way that helps a buyer make their buying decisions, but doesn’t create noise and confusion in the process.
When you’re looking at the sales process, you should look at it from end-to-end, including list building, prospecting, and converting those prospects. You should also look at your own sales team and make sure that they align with the credibility and authority that your target customer is going to respect.
For example, Globality’s chief revenue officer, Keith Hausmann, once told me that it was important for him to bring on a sales team who had established relationships within their Fortune 500 target list.
Hausmann quickly realized that even though he had access to the CEOs of these Fortune 500 companies through his Board of Directors, the CEOs weren’t the ones making the purchasing decisions. They were pushing those decisions down to the appropriate people in their company. If these people didn’t feel like there was a level of expertise in the sales team that related to what they oversaw, they would very quickly dismiss them.
Content marketing has the ability to create this expertise and authority for your sales team. If a salesperson has a lot of thought leadership content, and their target customers have seen it, the customers will have an automatic level of respect for that salesperson.
The great thing about content marketing is that it’s an asset that can be reused and reused. It generates organic traffic, but it’s also an asset that you can continue to leverage through the sales process. You want to create content that will support you and inform your target customers about what you do and who you are as a company and an individual.
Vice President and CFO Tom Brinegar has also found that “[PEAK Resources’] most effective sales strategy is engaging in opportunities where we have the ability to highlight our team’s proficiency, the technologies we represent and build long-term relationships. This involves our team being highly skilled and 100% committed to the company’s value differentiation.”
Your customers are looking to deal with experts. They’re not looking to deal with somebody who sells a product. They have goals. While the CEO might open the door, it’s up to you as a chief revenue officer to make sure that your sales team is fully enabled to have the credibility they need to make the sale. By arming them with their own thought pieces, you’re able to drive up their credibility and expertise with your target customers.
3. Leverage Customer Service
Most people see customer service as an operating expense that at best retains customers, but this is so shortsighted that it’s actually comical. Customer service is an untapped gold mine that can be turned into a profit center.
The first way you can do this is by converting live traffic into leads or customers. Empower your customer service agents to become great sales agents, and you’ll increase the revenue of customer service. There are teams out there, like Flow’s customer service team, that are highly skilled and trained in driving revenue by using live chat.
When your customer service team is converting leads into appointments or website traffic into customers, you can allocate a portion of that cost as an acquisition cost as opposed to a support cost.
You can also leverage your customer support by using it to learn about your customers. There’s a great deal of intelligence to be derived from the interactions of the customer service team, like chat and email transcripts.
These can be used to derive a large number of insights that can help you as a chief revenue officer. Your customers are telling you exactly what they want to know and what they haven’t learned from you yet. You can use their exact words to inform your editorial calendar and market to them with content, ads, infographics, or white papers.
Mike St. John, nationally recognized chief revenue officer and owner of LCS, has found that customers are looking for a personal connection with customer service.
“Whatever service strategy you choose, constant engagement with your customer base is critical,” says St. John. “Successful service strategy relies on the effective collection and use of data and the ability to make your customer feel like your service strategy is designed just for them — ‘mass personalization.’”
In every exchange, your customers are giving you information that you can use to turn customer service into a profit center. By leveraging your customer service to mine for intelligence and turn live traffic into customers, you’ll be even more effective as a chief revenue officer.
What Key Performance Indicators Should Chief Revenue Officers Focus On?
There are several factors that play into the effectiveness of a chief revenue officer, ranging from products and sales to marketing and customer service.
Products: Identify and segment the relevant micro-markets that you need to target and develop a product for each of them.
Chief Revenue Officer of Plum River Technologies, Danny Effron, has found that honing in on your markets can make your other efforts, such as sales and marketing strategies, much more effective.
“We have found success with a sales strategy focused on clearly defined customer segments within these specific market channels and categories (i.e. EU-based, Mid-size surf clothing and apparel brands generating between $50-$200 million in gross annual sales),” said Effron. “The channels and customer segments that we are targeting drive all aspects of our sales and marketing strategy from the way we are building out our sales team to the types of marketing programs we will invest in.”
Pricing Strategies and Execution: The micro-market’s perceived value of your product should match its price. It’s also your job to make sure that your company has the processes or tools necessary for determining this price point. Keep your product availability limited to the micro-market that will produce the highest return.
Sales: Similarly to producing the highest return in your micro-market, you need to develop sales strategies and tactics that generate the most revenue in your most valuable target segment.
Marketing: Your marketing and advertising strategies should not only bring in revenue but also be continuously reviewed and updated so that you’re getting the best return on investment possible.
According to Mike St. John, “Companies need a healthy combination of public relations, an effective website, printed collateral, advertising, direct marketing, events marketing, and social media. The probability of successful marketing strategies is greater with the above being sustained, integrated, and comprehensive—and tied directly to the company’s mission, vision, and values.”
Distribution Channels: Again, you want to make sure that the return on investment you’re receiving is the best possible. Evaluate your distribution channels and only use the ones that are the most effective for producing revenue.
Efficiency: You don’t want to hold your company back. Any of your efforts to generate revenue should help them move the needle towards maximizing revenue.
Customer Support: Implement and maintain a complete customer feedback loop to learn if your customers are happy with their product, help them if they aren’t, and keep them coming back to you.
Implement a Strategy that Generates Revenue
Actualizing a marketing, sales, and customer service strategy that generates revenue is most successful when the overall process is understood and works together as a whole. If you’re thinking about outsourcing these services, Danny Effron, Chief Revenue Officer at Plum River Technologies, suggests choosing a vendor that will help you take a closer look at your current processes and throughput.
“Look internally within your organization past a selection process to ensure that you are set up to truly maximize the investment you are making with a vendor partner,” says Effron. “Good vendors should help you through this analysis with focus on what internal resource requirements you will need to achieve success.”
At Flow, we understand the systems, constraints, and internal and external challenges that chief revenue officers regularly face, and we have a proven track record of creating systems that are designed to drive revenue with branding, content marketing, and customer service outsourcing.
Want to have a one-on-one conversation to talk about how we can help maximize your customer acquisition flow? Drop us a line to discuss strategy options that will work for you.