Who is going to HATE this answer?
Not everyone has an opinion on this question since most people don’t know what the science of “Revenue Generation” is or if it differs from marketing.
The CMO (chief marketing officer) starting in the twentieth century was the senior executive focused on marketing who sat on the senior leadership team. If you looked at the org chart of a large B2C (business-to-consumer) organization like Apple, P&G, or Johnson & Johnson, you would almost always find a CMO at the table with the CEO, CIO, CFO, etc., but who sadly was replaced about every 24 months. For some reason, that seemed to be due to “lack of performance” regarding financial metrics reported to the CEO and “lack of support” of good marketing practices to the CMO.
The CMO may be the loneliest of the C-suite. Finance, engineering, and IT are all trained in hard science areas where 1+1 is 2 or 1s & 0s result in software that always performs the same, and a direction change is measured by degrees or even fractions of a degree. The CMO’s world is much softer, with the most famous marketing quote being “half of my marketing doesn’t work and I don’t know which half.”
It is not clear if the members of the senior team used to hard metrics just don’t know what marketing is, or if they think they know but still would rather the marketing budget be assigned to their departments.
The newest leadership member is the CRO (chief revenue officer) who owns the “Revenue Generation” process. Few of the hard science members even know there is such a thing as a CRO. As they learn what “Revenue Generation” is and what a CRO does, they probably nod affirmatively because the CRO owns two critical business elements that no one else owns. These two elements are both obvious and critical to everyone’s survival and success, both of which are measured and managed:
- The creation and deployment of a revenue strategy that can be measured for operational results.
- The amount of financial leverage for the revenue resources required to attain the level of revenue results of growth and profitability consistent with the organization’s strategic plan.
The leaders interested in hard science understand the difference between things tightly measured and those that are justified because they are a cool and driving brand. These hard science leaders are tasked with creating leveraged outcomes. No one would be OK with spending a dollar to get a dollar or less back, so they want to see positive leverage for the revenue resources required.
Organizations often have both a CMO and a CSO (chief sales officer) by title, but in function the CMO is in the business of “marketing communications” and the CSO is in the business of running a sales team. Both are required tactical activities, but not leadership team-appropriate.
The core of the Revenue Process has three parts (see “Revenue Generation” Road Map).
The gold activity is a lead generation/marketing function, deploying the part of the revenue strategy that deals with finding those ideal prospective customers that have the problem you uniquely solve, are compelled to solve it now, and willing to invest in working with you to determine if your solution eliminates their strife. This gold function can be done by any part of the organization; however, marketing has the skills and knowledge to do it faster, better, and more efficiently than any other function. The metrics for the gold effort are: Do you have the right number of the right type of leads at the right time to support the blue/selling activity that is qualified prospects?
The blue activity is about selling and must result in enough deals closed at a sufficient margin to accomplish the goals in the revenue strategy. The metrics for the blue effort are: The percent of leads that are truly qualified, the percent of qualified leads that close, the number of days to close, and the average top-line and bottom-line profits.
The last functional area is the red (delivery) activity. This is about getting the buyer what they bought on time, on budget, and finding additional revenues from current customers and engagements for future growth.
This Revenue Road Map is so important because the CRO owns the revenue strategy and the required investment, which is leveraged across the Road Map. In this Revenue Road Map, the CMO’s and the CSO’s activities (gold and blue) report to the CRO as part of the total revenue strategy and deployment.
The CRO’s role is about intentionally creating and executing a revenue strategy that the CMO and CSO support tactically based on alignment to the revenue strategy.
In this century, every business needs to at least think like a CRO (if you can’t hire one) to create the Revenue Road Map for the CMO and CSO to follow and execute.
The key to removing your “cost of chaos” is to implement CRO thinking and then make sure your CMO and CSO are aligned to and supporting your revenue strategy.