Wednesday, September 27, 2023

Five things every CRO should know

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Shreya Christina
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Rahul Shah, CEO of ForecastEra.

We live in a world that has become extremely chaotic. Ongoing inflationary pressures, supply chain disruptions, global events and the ongoing pandemic are making life much more difficult for all businesses. In my experience, you probably understand these questions better than most if you’re involved in revenue collection. The changing business world begs the question: What do Chief Revenue Officers need to know today?

1. Renewals

CROs are required to fully understand the sales renewal process. Renewals have different meanings in different sales contexts. For example:

• For subscription-based services, a renewal means a customer continues to subscribe to your business and pay for your help. Such promotion usually does not require active participation, and unless a contract specifies otherwise, a customer will have to make every effort to cancel the subscription.

• For sales of physical supplies, renewal is more like retention, meaning a customer will continue to order goods from your company. In this case, however, more sales effort is required: a customer will have to keep collecting items to keep them.

It is essential that a company does not simply assume that an already existing customer will always be a customer. Customer churn is expected in every company and a CRO can help provide insight into customer churn. They can also identify ways to reduce attrition. Ultimately, a CRO needs to perform close analysis to determine which factors affect sales renewals and upsells.

2. Virtual Sales

Covid-19 has undoubtedly pushed more and more meetings to a digital format: more and more meetings are digital. At the same time, meetings are attended by more people and held more often, but they are usually shorter, resulting in people spend less time in meetings. Digital tools have made digital meetings more manageable and effective than ever.

All this has led to virtual sales: holding virtual meetings and pitch sessions that allow people to make a sales pitch through a digital medium. Virtual meetings are not a temporary fad that will disappear once Covid-19 has completely abated. Current research shows that many sellers believe that selling will remain virtual. Additionally, the 2021 H2 Gartner B2B Buyer Survey shows that 66% of buyers prefer a rep-free experience, up 23% from the previous year.

3. Disruption of the supply chain

Supply chain disruptions are an important factor in sales and revenue collection. Imagine the following situation.

• Large organizations expect an amazing $182 million annually as a result of these supply chain disruptions.

• A McKinsey report states that some companies can expect to lose almost 45% of their profits from supply chain disruptions.

• Supply chain disruptions often mean that goods are delivered, but later. This delay results in delayed payments and cash flow problems.

A CRO must be nimble to anticipate supply chain issues and have backup plans. Supply chain disruptions should also be factored into revenue forecasts and estimates. Pay attention to where you source inventories from and the dynamic impact these shortages can have on revenue estimates. Finally, a CRO must be able to point out the potential revenue issues arising from these supply chain issues and work with others on their team to address them appropriately. Make sure team members are aware of these issues.

4. Global Inflation

Anyone in the business universe can understand the massive impact global inflation is having on the world.

• A recently released report showed that inflation continues to accelerate, with consumer prices rising 9.1% annually, the worst number recorded in 40 years. Moreover, inflation is not only a problem in the United States, but a global problem as global inflation continues to rise.

• The rise in prices affects not only businesses and consumers, but also related issues: Covid-19-related labor shortages and the ongoing spread of the disease.

• Surveys show that 83% of consumers plan to cut spending due to inflation.

• Inflation also affects companies, with 68% of small businesses planning to raise prices, according to a survey.

CROs will have to find ways to really minimize the impact of inflation. This may mean finding ways to reduce costs, replace goods or services, and mitigate the impact of price increases on consumers. However, it has become clear that people are unwilling to accept inflation and are constantly looking for other deals and lower prices.

5. Buy digitally

Stunning data from the Gartner survey also shows the impact of digital buying: according to a recent study, 45.4% of all revenue generated by B2B platforms comes from digital commerce, compared to 36.4% in 2019. As you can see See, the trend in digital sales is not as extensive in the digital buying space as it is in terms of virtual sales and a rep-free experience.

As a CRO, it is your job to determine the role of digital buying within your company. Are there specific sales you can make with digital buying that work better than others? Are there specific customers who prefer to buy digitally, while others still need a face-to-face meeting? Will you still need so many sellers in the future, or will you be able to use the money you spent to pay them and invest more in digital platforms?

Keeping track of this requires paying attention to real-time data to understand how current events, changing market trends, and ongoing product development can impact digital purchases and force your organization to change direction.

Many issues affect the role of CROs. Yet this disparate chain of potential impacts has at least one thing in common: the importance of keeping accurate, real-time data and events. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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