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Key Measures & Strategies for the CRO - M. Allen's POV




Through the last few years, I have had the pleasure of working with CEOs and CROs in various size companies in financial services/Fintech. During this journey as strategic partner and advisor, I've seen and helped implement many growth strategies. Here's how I would score some of the common strategic themes on a scale of 1-5 with five being easiest to implement and most value generating:


1. Develop a deep understanding of your target audience and their pain points. - Score: 5


2. Offer a free trial or demo of your services to allow potential clients to experience your offering before committing. - Score: 4


3. Build a strong online presence with a website that is optimized for search engines and social media profiles that showcase your expertise. - Score: 3


4. Develop case studies and success stories that demonstrate the value your services have provided to other financial services companies. - Score: 4


5. Attend relevant trade shows and industry events to network and generate leads. - Score: 3


6. Leverage referral programs to incentivize current clients to refer new business to you. - Score: 4


7. Offer training or support services to help new clients get up and running with your services. - Score: 3


8. Host webinars or events to educate potential clients on the benefits of your services. - Score: 4


9. Partner with complementary vendors to expand your offering and reach new clients. - Score: 2


10. Create targeted content (e.g., blog posts, whitepapers, infographics) that speaks directly to the needs of your target audience. - Score: 3


11. Develop an email marketing campaign to nurture leads and stay top-of-mind with potential clients. - Score: 4


12. Build relationships with industry influencers and thought leaders who can help spread the word about your services. - Score: 2


13. Offer special promotions or discounts to incentivize potential clients to sign up. - Score: 3


14. Use social media advertising to target potential clients based on demographics and interests. - Score: 2


15. Develop a strong value proposition that clearly articulates the benefits of your services. - Score: 5


16. Create a customer loyalty program to reward and retain clients who have been with you for a long time. - Score: 2


17. Use customer feedback and reviews to continuously improve your services and build credibility. - Score: 4


18. Offer a variety of pricing plans to cater to different budgets and needs. - Score: 3


19. Develop a strong sales pitch that highlights the unique benefits of your services. - Score: 5


20. Continuously track and analyze your sales and marketing efforts to identify what is working and what needs to be adjusted. - Score: 4


Note that these scores are subjective and may vary depending on individual circumstances and context within your company/organization and your market.


So we all know AI is a key solution for many of us and transforming our revenue operations in 2023. So what are we seeing as top use cases for AI in revenue and sales organizations?


Below are the top ten AI use cases to implement within a sales and marketing division: 1. Predictive lead scoring: Use AI-powered algorithms to analyze historical data and identify the most promising leads for your sales team to prioritize. 2. Chat-bots: Implement chat-bots on your website or social media platforms to provide quick and personalized responses to customer inquiries, helping to improve engagement and conversion rates. 3. Customer segmentation: Use AI to segment your customer base and deliver targeted communications and promotions that are customized to individual preferences and needs. 4. Sales forecasting: Use predictive analytics to forecast future sales and identify trends and patterns that can help inform your sales strategy. 5. Marketing automation: Use AI-powered marketing automation tools to streamline repetitive tasks, such as email marketing and social media posting, freeing up time for your team to focus on higher-level tasks. 6. Personalization: Use AI to personalize your website and marketing content to individual customers, based on their browsing and purchase history. 7. Dynamic pricing: Use AI-powered pricing algorithms to automatically adjust prices based on factors such as customer demand, competitor pricing, and market trends. 8. Sales coaching: Use AI-powered tools to analyze sales conversations and provide real-time coaching and feedback to sales reps, helping to improve their performance and close rates. 9. Sentiment analysis: Use AI to analyze customer feedback and social media conversations to better understand customer sentiment and identify opportunities for improvement. 10. Sales forecasting accuracy: Use AI to improve the accuracy of your sales forecasting by analyzing historical data, industry trends, and customer behavior to make more accurate predictions. Again, note that these are just some examples of the many use cases for AI in sales and marketing, and the specific use cases that are most relevant to your business will depend on your industry, target audience, and business goals.




One of the biggest gaps that I see when I enter a client organization is the lack of key measures and more importantly the right measures to manage the growth. So here are the key measures, how they are calculated and what the key strategies are to drive improvement in your B2B organization over the remaining months of 2023:

1. Sales growth rate

2. Customer acquisition cost (CAC)

3. Customer lifetime value (CLV)

4. Sales conversion rate

5. Sales pipeline velocity


Targets and benchmarks for B2B companies in 2022 and 2023 will vary based on the industry, company size, and other factors. However, some general benchmarks for these metrics in B2B companies are:


1. Sales growth rate: A healthy sales growth rate is typically around 10% per year. However, this can vary depending on the industry and competitive landscape. Sales growth rate is calculated by subtracting the previous period's sales from the current period's sales, dividing the result by the previous period's sales, and then multiplying by 100 to get a percentage. The formula is:

[(Current Period Sales - Previous Period Sales) / Previous Period Sales] x 100

For example, if a company had sales of $1,000,000 in 2021 and sales of $1,200,000 in 2022, the sales growth rate would be:


[(1,200,000 - 1,000,000) / 1,000,000] x 100 = 20%


2. Customer acquisition cost (CAC): In general, a lower CAC is better. The average CAC for B2B companies varies widely, but a good benchmark is to keep it under 15% of the customer's lifetime value. The CAC is calculated by dividing the total cost of sales and marketing by the number of new customers acquired in a specific period. The formula is:

Total Sales and Marketing Cost / Number of New Customers Acquired

For example, if a company spent $100,000 on sales and marketing and acquired 10 new customers, the CAC would be:

$100,000 / 10 = $10,000 per customer


3. Customer lifetime value (CLV): The CLV should be higher than the CAC to ensure profitability. A good benchmark for B2B companies is to have a CLV that is at least 3x the CAC. The CLV is calculated by multiplying the average value of a sale by the number of repeat purchases per year by the average length of the customer relationship in years. The formula is:

Average Sale Value x Number of Repeat Purchases per Year x Average Length of Customer Relationship in Years


For example, if a customer makes an average purchase of $100, buys from the company twice a year, and stays a customer for an average of 5 years, the CLV would be:

$100 x 2 x 5 = $1,000


4. Sales conversion rate: A healthy sales conversion rate is typically around 10-20%. However, this can vary depending on the industry and sales cycle length. The sales conversion rate is calculated by dividing the number of sales by the number of leads or opportunities and multiplying by 100 to get a percentage. The formula is:


Number of Sales / Number of Leads or Opportunities x 100

For example, if a company had 100 leads and closed 10 sales, the sales conversion rate would be:

10 / 100 x 100 = 10%


5. Sales pipeline velocity: A good benchmark for B2B companies is to have a pipeline velocity of at least 3x the sales cycle length. The sales pipeline velocity is calculated by dividing the total value of opportunities in the pipeline by the average length of the sales cycle. The formula is: Total Value of Opportunities in Pipeline / Average Length of Sales Cycle For example, if a company has $1,000,000 worth of opportunities in the pipeline and the average length of the sales cycle is 90 days, the sales pipeline velocity would be: ($1,000,000 / 90) x 365 = $4,055,556 per year


Here are some instrumental strategies to improve each of these metrics and some detailed strategies to help a Chief Revenue Officer (CRO) to achieve these improvements:


1. Sales growth rate:


- Expand product or service offerings to increase revenue streams.

- Increase marketing and advertising efforts to reach new customers.

- Develop new sales channels, such as online sales or partnerships with other businesses.


To help a CRO improve the sales growth rate, they can:


- Conduct market research to identify new opportunities for growth.

- Set specific sales goals for each quarter or year.

- Implement sales training programs to improve the performance of sales teams.

- Develop a strong sales pipeline management process to ensure consistent sales growth.

- Use data analytics to track sales trends and adjust strategies as needed.


2. Customer acquisition cost (CAC):


- Optimize the sales and marketing process to reduce costs.

- Focus on targeting high-value customers who are more likely to make repeat purchases.

- Use referral marketing to acquire new customers through word-of-mouth.


To help a CRO improve the CAC, they can:


- Analyze customer data to identify the most valuable customer segments.

- Implement a lead scoring system to prioritize high-value leads.

- Test different marketing channels to identify the most cost-effective ones.

- Use customer feedback to improve the sales process and reduce customer acquisition costs.


3. Customer lifetime value (CLV):


- Increase customer retention rates through excellent customer service and loyalty programs.

- Up-sell and cross-sell existing customers to increase the average value of a sale.

- Develop new products or services that meet the needs of existing customers.


To help a CRO improve the CLV, they can:

- Implement a customer-centric approach to business strategy.

- Use data analytics to identify customer behavior patterns and preferences.

- Develop personalized marketing and sales strategies based on customer data.

- Use customer feedback to continuously improve products and services.


4. Sales conversion rate:

- Improve the quality and relevance of leads through targeted marketing and sales efforts.

- Streamline the sales process to reduce friction and improve the customer experience.

- Use sales automation tools to improve efficiency and reduce errors.


To help a CRO improve the sales conversion rate, they can:


- Analyze the sales pipeline to identify bottlenecks and areas for improvement.

- Develop a sales playbook that outlines best practices and processes for the sales team.

- Use data analytics to track sales performance and identify areas for improvement.

- Implement sales training programs to improve the skills of the sales team.


5. Sales pipeline velocity:


- Improve the quality and relevance of leads to shorten the sales cycle.

- Use marketing automation tools to nurture leads and move them through the sales pipeline faster.

- Improve the efficiency of the sales process by automating manual tasks and reducing errors.


To help a CRO improve the sales pipeline velocity, they can:


- Implement a sales pipeline management process to track opportunities and move them through the pipeline efficiently.

- Use data analytics to identify areas of the sales process that are slowing down the pipeline.

- Implement a lead scoring system to prioritize high-value leads and focus on closing deals quickly.

- Use sales automation tools to streamline the sales process and reduce errors.


To help with your growth, attaching two useful tools below as well from Fluint. Straightforward and especially love the weekly pipeline summary letter to use with your executive team. Again, enclosing below:



[Framework] Weekly Pipeline Update
.pdf
Download PDF • 38KB

Mutual Action Plan Template
.xlsx
Download XLSX • 8KB

I hope you find this helpful in your growth journey and I'm interested to hear what are the other key strategies you're implementing inside your organization as we enter the second half of 2023?


Go gettem!


Regards,


Matt Slonaker

Founder and CEO of M. Allen LLC


About the author:

Matt Slonaker, is an experienced business executive and leader with a background in revenue growth, business development, finance, technology, and real estate. He has a track record of generating significant revenue growth, with over $200 million in new revenue won and win ratios exceeding 33%. He has worked for global companies such as JP Morgan Chase, Morgan Stanley, H&R Block, and Firstsource. Additionally, he is the founder and CEO of M. Allen LLC, which has served over twenty clients and fueled over $200 million in opportunity pipeline for them in the last three years. Matt has core skills in executive leadership, business ownership, real estate, system analysis, and improvement, among others.



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