SaaStr Pro Snippet: “When should we hire a CRO, and what should that role own?”

If you haven’t heard yet, we launched an automatic training program for SaaS companies earlier this year called SaaStr Pro. And it’s taken off. Dozens of CEOs have signed their management team up for the program.

How does it work? Every week, each member of SaaStr Pro gets one bite-sized post to read, one video clip to watch, and one thing to discuss as a team, all on a specific topic, and all in all about 15 minutes.

Most management teams then end up meeting weekly, in person, as a group to discuss their favorite ideas from that week’s lesson. And best of all — we’re hearing plenty of stories of teams implementing what they learn and seeing results. 🚀

Imagine that: taking one step forward, as a team, every single week….and it’s all automated and curated for you.

But there’s a bunch of other benefits that Pro members get, like one free pass to the SaaStr Annual and one free pass to SaaStr Europa (yes, really).

On top of that, one of the most popular benefits is our monthly AMA (ask-me-anything) webinars with SaaS experts, where any member of SaaStr Pro can submit a burning, top-of-mind question and get a response, guaranteed.

Our last AMA was with Jason Lemkin, and over the next few weeks, we’ll share some of the highlights. Next week’s AMA is just a few weeks away with Brendon Cassidy, so if you’d like to join, sign your team up today.

Let’s check out one of the recent AMA questions. Enjoy!

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When should we hire a CRO? And what should that role own?

You know, a few years ago, Chief Revenue Officers were few and far between. And it’s a confusing title today. So let’s step back and talk about two issues. Five or six years ago, you were lucky to be able to find any VPs. There were far fewer candidates for almost every role than there are today, but SaaS has grown 20x in the last five to six years and as it’s happened all these companies have grown up.

Box, Twilio, New Relic, the IPOs, the Appdynamics that have been acquired…they’re all creating a whole new generation of leaders that you can go and try and recruit or even poach and not only just the iconic ones. But the ones that have gone from 10 to 20 to 40 million? Their teams will begin to turn over a variety of reasons.

There are so many great candidates out there and a couple things have happened, but I think the biggest one is that a lot of people try to stretch two levels now so someone that was maybe a director of sales, doesn’t just want to be a VP of sales at our next role. She wants to be a Chief Revenue Officer.

The toughest one of all is top AE, the top sales rep, that wants to skip two steps and become a VP of sales. So whatever you do be careful because people internalize their titles and I believe that the best the best call for all of almost all of us is to hire a stretch VPS.

Hire folks who weren’t a VP at their last role, and you stretch them one level, ok. But stretching two levels…. I’ve yet to see that succeed. Be careful about Directors that want to be CROs. I’ve yet I’ve yet to see it work. It’s too much. They can’t hire the people and most importantly where people fail with this notion of I don’t even know what a CRO is exactly.

CROs end up owning all revenue and many many folks who have become great closers, you know what they’re not they’re not great renewer. They’re not great up-sellers. They’re not great retainers. And a Chief Revenue Officer doesn’t just own the close. They own the next 10 years of that customer.

They own growing that account 120% and 140% over those years. They own the headaches, the complaints, the whining, the get-togethers, they own the entire customer success function. And I will just caution: I don’t think 80% of VPs experience are ready to own customer success. 80% of VP of Sales, even though they may have ambition, even though they may want to do something more.

In the Bay Area, everyone wants to do something more. We’re coming into the 11th year of a bull run. Everyone wants something more out of this crazy world we’re in but very, very few sales leaders want to own the headaches of the next ten years. So be careful there.

So that’s my one caution. Try to make someone the SVP of Sales. The EVP is Sales,  the worldwide VP of Sales, the global Intergalactic Head of Sales, but be careful having them own post sales if they’re not ready. 😁

Having said all of that at some point your organization gets to be too complex. As you get into double digits of revenue, 10 million+, if you have net negative churn if you have revenue growth from.

You need someone to own Revenue holistically, you will end up with a sales leader that loves to close and you will end up with a customer success function that at the end of the day is focused on customer happiness, but who’s going to own that overall number of growing your revenue base to a hundred and ten hundred twenty a hundred forty percent per year.

It’s a gap. And I made this up on a SaaStr for post a few years ago: I called it a Chief MRR Officer, but really it is a Chief Revenue Officer. Someone’s got to own sales and customer success. Because it’s you as the CEO and maybe that’s fine for a while. But I would argue, if you can, hire someone that’s iconic that has done it as soon as you have a very successful sales leader and CS leader and cross 10 million.

Think about how you can find someone to own all of the revenue stream. That’s my thought. But do it too early…. and it’s just a headache.

 

Published on September 21, 2018

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