Conducting a search for a Chief Revenue Officer (CRO) or sales executive in the traditional way will yield traditional results. Yes, you’ll likely find someone who has the experience of “managing a (potentially) great sales team,” but you’ll likely miss out on the person more aligned with the required next generation of sales leadership.
Foundational experience is still paramount in your next executive-level sales hire, but as reviewed in this article, there are three additional pillars to consider in a candidate:
– A go-to-market/strategic perspective
– The right mindset
– A disciplined approach
In the first of a three-part blog series, we are going to dive deeper into the first pillar, the GTM perspective, which is the top-level component of this next-generation value-added leadership search.
Winning in today’s market requires a much broader, strategic perspective that extends well beyond traditional sales tactics. Future leaders must master the picture holistically and marshal the collective resources of the organization against that vision.
Modern sales leaders can fall under the umbrella of revenue, growth, or even customer success depending on an organization’s structure, industry, product, or stage. Regardless of title, for leaders to succeed in the PE/VC ecosystem, they must firmly understand and be able to approach the business go-to-market with a strategic perspective, clearly articulating their company’s:
– Target markets, segments, and personas
– Positioning and value proposition
– Approaches needed for each sales channel
– Pricing and offering packages
Let’s take these in turn.
Does your candidate understand your target markets and segments within them?
Obviously, look for industry specific knowledge here. What are the types of problems being faced within industry segments that pose threats to the organization and the industry as a whole? Your leader should be able to define the type of potential customers that have a problem your solution directly addresses. And the ability to quantify the value to the business is even better. Who are your company’s best current clients and which prospect companies might also be a great fit? Are there certain technologies that work best with your product and can your candidate speak to strategies to identify and open conversations with them?
Can your candidate articulate your unique value proposition to the appropriate audience?
Modern sales leaders must understand how their target buyer personas consume information currently, then weave in stories that confirm existing problems and show an exciting solution that resonates and encourages steps toward a purchase of your product, essentially bringing to life the art of the possible.
Additionally, he or she should be able to craft a winning value proposition customized to each of the target personas; articulating the benefits of your product that set you apart from others in the market, including how the benefits achieve or surpass a desired outcome and delight customers.
There’s an art and science here unique to modern sales executives, and not everyone possesses the needed skills.
Define the sales channels that are most relevant for your product and industry segment you are targeting
Your sales channels can vary based on the maturity of your products, the data on your prospects, and the creativity of your sales and marketing teams. Is the end market and company maturity best suited for a direct or channel-based selling motion? If channel, what types of channel partners (e.g., Referral vs. Reseller) are most appropriate? If direct, what is the role of the “field-based team” vs. an inside/business development team? Are there third-party opportunities that make sense? Are there “influencers” that make sense who can represent your product?
No matter what channels are chosen, tested, and ultimately committed to, any channel strategy comes with its own set of responsibilities. There are best practices to learn for specific channels, and you need to ensure your chosen partners deploy the correct messaging, and consistently monitor the plans and strategies you test along the way.
Understand the nuances of pricing and offer packages
It goes without saying that pricing in a PE/VC-backed company is imperative to get right. The strategy needs to be holistic so it takes into account the customer, the product mix, and the potential combinations of products to best serve the customer. The simple truth, though, is that customer value isn’t the only consideration in pricing. Value must also be created for the portfolio company and in turn, the PE/VC.
A go-to-market leader who understands creating value through margin expansion via pricing transformation is critical. The leader should know where to implement cross-sell and up-sell strategies that benefit the customer and increase the company’s margins and profitability.
Over time, the executive should gain an understanding of which products flow straight to the bottom line and which serve more of a “loss leader” role.
Executives who understand the relationship of pricing levers to enterprise value is also key. For example, a 1% change in price might result in a 4% increase in enterprise value. This could be a game changer in the PE firm’s path to exit.
To wrap it up
Hiring a sales executive isn’t just about previous sales success – they might have been just riding a wave. Today’s sales executive needs to be well-versed in go-to-market strategies and the intricacies of the modern revenue team. Finding those people can be challenging, but the team at JM Search is well-versed in the unique approaches in recruiting and vetting executives for private equity and venture-funded organizations.