Meet Host, Mary Grothe
Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue™, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.
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Hey, Revenue Radio®. I'm Mary Grothe. Today's topic is: What is the difference between a VP of Sales and a CRO Chief Revenue Officer? This seems to be one of the most confusing role definitions I run into as the founder and CEO at House of Revenue®.
I have the privilege of meeting with CEOs weekly who are looking at scaling their companies. One of the topics we spend a decent amount of time on is understanding the difference between a VP of Sales and a CRO. Then, a good definition for you and what you can do in your organization.
Here's some history of how this even became a problem. Let's walk through it. How did this happen? The Chief Revenue Officer, CRO, is a relatively new role. The title hasn't been around for a very long time. Honestly, what has happened is that in was early stages became the level up from a VP of Sales. People heard CRO. They equate revenue to sales. Therefore it was more interchangeable with the VP of Sales. It seemed to be happening in career progression. Where does the VP of Sales go after the VP of Sales? Where do they progress? We could have called them Chief Sales Officer, but we called them Chief Revenue Officer. Then, what was happening was the Chief Revenue Officer people were getting confused because the word "revenue" is not sales, so we're clear.
Revenue should describe all the revenue in the company, which can come from the sales side, the customer success side, and marketing. Marketing is helping you attract people into the funnel. It bleeds into the brand because your brand strategy is the top of funnel and awareness of pulling people in. It goes even a step above that. What about your go-to-market strategy? Shouldn't the Chief Revenue Officer have a say in the go-to-market strategy if they are responsible for all the revenue in the funnel? People got confused, and everyone had these differing definitions of a CRO.
We had a lot of VPs of Sales that got the CRO title because it worked from a career progression, but they never worked in marketing. They have yet to work on brand strategy. They may or may not have been involved in go-to-market strategy conversations or work. Often, they needed to do something about customer success. Customer success is also an underdeveloped definition of a role. We're seeing Chief Customer Officers (CCOs). We're seeing Chief Experience Officers and Customer Success. There are so many different titles in the world of Customer Success.
Now, there's an argument. Does that person report to a CRO? Are they up here with the CRO, etc.? Let's break this down into all sales leadership levels and the true definition of a CRO.
A Sales Manager is a leader of salespeople. Depending on the size of your organization, if you are at the size to have a Sales Manager, a VP of Sales, and a CRO, this is how these definitions will work. A Sales Manager is going to lead a sales team. Their main goal is that quota number. They are meant to be integrated into the field with the salespeople working on deal progression, holding salespeople accountable to their daily activities so that they can hit their leading indicators, which will then impact their lagging indicators.
They own the number. Ultimately, the breadth of their work is as a player-coach. They should be deeply integrated. They should be moving the roadblocks out of the salespeople's way. They should liaise with anyone in a revenue operations role to ensure that they have the right operating automation, CRM, and tools they need inside the tech stack for the salespeople to succeed. They should also liaise with marketing on requests they need for sales enablement.
The Sales Manager is responsible for ensuring that their sales team is productive, and you've got the right people in the right seats. They're holding them accountable for their actual activities and the outcomes. Then, we've seen a Sales Manager liaise with operations or implementation to ensure they have good communication. The Sales Manager forecasts what will be coming through and ensures the operations or implementation team is ready for that.
So, what does a VP of Sales do? Depending on the organization's size, you could also have a Director and a VP. Ultimately, at the Sales Manager level, each Sales Manager might have somewhere between four and ten direct reports. Then, you have multiple pods of those. Those can roll up to a Regional Director or National Sales Director who leads the Managers. If you don't have a Director, you're going straight to VP. The managers may report to a VP of Sales. But once you get to a VP of Sales, a VP of Sales should not be managing salespeople. If you have a VP of Sales title and the salespeople report to the VP of Sales, you may be missing an important layer of that player-coach, the Sales Manager in the weeds.
A VP of Sales is somebody at the level who can understand the sales organization's construct and what's working and what's not. They should have a pulse on the competition. They should have a pulse on trends in sales organizations, things like do we need top-of-funnel BDR and SDR. Do we need that to be in a full-cycle sales role? What are we investigating for channel partnerships? How are we going to market with our sales approach? Do we have friction in the sales process? Are our CRM and sales stages aligned with how the buyer buys? They should be listening to recorded calls. They should determine if there's efficacy in the current sales process and how the salespeople are working with the prospects.
Finance, the VP of Sales, and the CRO, which we'll get to in a second. They should be hyper-aware and focused on what is running well and not running well inside the sales organization. They should own the number from Finance. If you have a CRO should be communicating the budget number, and the VP of Sales should know how to allocate the number from Finance across the sales team whether there are different segments like small business, medium business, upper market, or enterprise, inside sales, outside sales, or channels sales.
The VP of Sales should understand how to take that number and carve it up among all those different territories, segments, or roles. They should also understand the job description, the compensation plan, and the overarching conversation model for all sales departments. They should be in charge in identifying opportunities for spin-offs, and incentives, creating lifetime sales bonus programs, President's Club, and other components of being a VP of Sales. They should own the sales playbook and the efficacy.
They should also be monitoring what the Sales Managers are doing. Is the Sales Manager an effective trainer and coach? Are they effective in challenging conversations and holding people accountable? They should be leading the Sales Managers, if there's more than one, ensuring they are doing the right things for the sales team members.
The Sales Manager and VP of Sales are very different roles. For small organizations, salespeople report to the CEO. Then, you might bring in a VP of Sales and have salespeople report to a VP of Sales. Well, that can be troublesome depending on the type of profile you put out to the market to hire a VP of Sales because a Sales Manager is different from a VP of Sales.
If you're hiring somebody who's a great Sales Manager, but they don't have that skill set in those higher-level strategic items that I was just mentioning. If you give them a VP of Sales title, they'll not succeed because they need to learn how to do that work, or they've never done it before.
Now, here's the opposite. Maybe they are an accomplished VP of Sales, but they have worked with supporting Sales Managers, and it's been a while if ever, they have managed salespeople. If you're in a small organization and you bring on a VP of Sales who is great on the strategy and infrastructure sides, they're outside the field. They need to do deal progression. They're not in the weeds. You have a gaping hole. You need a Sales Manager.
Hopefully, this is helpful in clarification. Everything I've said about Sales Manager and VP of Sales is sales, sales, sales, sales, sales. Chief Revenue Officer is not a VP of Sales. It would be tough for you to progress a VP of Sales into a Chief Revenue Officer role and expect them to be proficient if they have yet to be trained, run a marketing org, and be responsible for brand and go-to-market strategy.
If they still need to get a handle on the second half of the bowtie funnel, which is implementing, onboarding new customers, and getting them to a measure of adoption, retention, expansion, and advocacy, they shouldn't be sitting in a CRO seat. They should have a CMO, a CCO or a VP of Sales, a VP of Marketing, and a Head of Client Experience or Customer Success. If you look at the makeup of a real CRO, holistic with revenue, they should be the right hand of the CEO. You get the point. These are all role-ups to an overarching go-to-market, brand, sales, and CS strategy supported by the revenue operations layer.
A great CRO can solve so many revenue problems because most revenue problems inside of an organization are caused by having Department Heads and not a holistic leader. You have a Head of Marketing, a Head of Sales, and a Head of CS. But who's in charge of all of that, a CEO? A CEO needs to be visionary, run the company, and not be the Head of Revenue. It may work for a certain point, but there is a tipping point when you need a CRO, and that CRO is not your VP of Sales.
When you're hiring for a CRO, newsflash, it's hard. I know. I get to recruit them and hire them here at House of Revenue®. I have a very strict profile on who I will even let into interview. This is not a glorified sales leader CRO position. This is somebody who has spent equal parts in sales, customer success, revenue, operations, marketing, and brand strategy.
In their interview, I'm making sure that they've scaled the company in that 5 to 20 million range and preferably exited. They've done it again and multiple times. When I give them a complex problem to troubleshoot and answer for me, I want to make sure they can demonstrate they understand holistically that it needs to be solved through branding, marketing, CS, sales, and revenue operations.
In a prior episode, I talked about how I recently got brought into an engagement. They said, "Hey, we think we have a sales problem." I said, "Okay, I bet you don't, but I'll buy it." I went in, and there's not a sales problem there. There's a lack of sales, but it's not because of the sales team. It's because of ten other things inside the revenue organization: branding, marketing, implementation, customer support, and advocacy. If I didn't say that there is so much that needs to be tackled that once it's fixed, aligned, and built holistically, boom, all of a sudden, sales will follow. I bet you it's more than just a sales problem.
Without fixing the revenue ecosystem first, you can't just plug in a VP of Sales to solve the sales problem. You need to treat the problem holistically if you're going to break through that plateau. Hopefully, that helps you understand the difference between a VP of Sales and a CRO.
If you're looking for more thought leadership on this or have questions, you can connect with me on LinkedIn, find me, Mary Grothe G-R-O-T-H-E, or read one of the many blogs we have on this topic at houseofrevenue.com.
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