Hiring a CRO
Experience Profile (Been There/Done That)
(prioritized)
- Scale-up experience: Has been through same journey (ex: $20M to $100M)
- Motion: Has led organization with same target motion (new vs expansion; if new, self sourced vs. SDR sourced vs. inbound vs. PLG vs. channel vs. …; similar licensing model – ex: seats vs. consumption vs. etc.)
- Deal size: Has sold with same deal size/complexity (typically by order of magnitude of ACV – $1K / $10K / $100K / $1M / …)
- Geo: Has led teams selling into same geographies as where you current operate/intend to operate in within the next 2 years.
- Culture Fit / Exec. Traits: Strong culture fit. For example, comfortable with conflict/directness if applicable
- Functional Breadth: Prior experience running the following if applicable: post-sale/CS; RevOps; Enablement; Marketing
- Industry: Has sold into target industry (this knowledge is harder to impart)
- Product/Persona: Has sold into target product category (easier to teach/learn); this is the same as/similar to having sold into a particular job function/persona; also the same as/similar to having sold ‘need to have’ vs ‘nice-to-have’ products or having sold mature versus emerging, category-creating products.
Resources
The First 90 Days for a New CRO/VP of Sales
| 0 to 30 | 30 to 60 | 60 to 90 | |
|---|---|---|---|
| Alignment | – Align with your CEO on key objectives & scope of control – Build a relationship with the CMO by understanding our marketing strategy, campaigns, program performance, etc. | – Prepare for your first Board meeting – Define leading & lagging KPIs and targets – Deepen partnership with CMO | – Lock down your top 3-5 strategic initiatives – Present your strategic plan and latest results to the Board – Deepen partnership with CMO |
| Culture | – Walk the walk on your values – Never speak ill of your predecessor | <— | <— |
| Customers | – Identify and meet with top strategic customers – Align with your CPO to understand the product, value prop., & roadmap | – Gain a deep insight into win/loss – Engage on top new logo deals – Identify and meet with top at-risk customers | – Continue to engage on top new logo deals and to meet with customers |
| Pipeline & Process | – Identify the top 5 deals you can impact – Understand the current sales process & operating rhythm – Don’t assume the playbook from your prior company will work at your new one | – Engage the team on the top 5 deals – Understand where deals stall/die – Tune your competitive messaging & motion – Roll out operating rhythm updates for 1:1/deal reviews & forecasting | – Roll out sales process updates – Control discounting (if applicable) |
| Talent | – Align with your CFO on the sales budget & capacity (plan vs. actual) – Assess each level of your organization to identify top & bottom performers – Hire known closers from your network | – Ensure you have recruiting capacity and hiring processes to meet your plan – Remove low performers – Determine key enablement needs – Hire in the image of your best players | – Launch critical enablement programs – Continue hiring top-talent – Recognize and reward your top players |
SaaS CRO Compensation
- CROs are typically on 50/50 base/variable plans but can range to 65/35
- CRO compensation should be closely aligned with the executive team as well as with the overall revenue team. To that end,
- Executive Team Alignment: CRO net new ARR target should match the company target. The company target is usually 10%-20% lower than the total quota deployed to account executives. (The Board target is usually an additional 10%-20% below the company target). CRO and CMO plans should have high overlap to ensure alignment.
- Revenue Team Alignment: CRO plan mechanics (metrics, payment frequency, accelerators, etc.) should match those of AEs and sales leaders. The CRO may have additional measures, ex. sales efficiency, but additional measures should complement and not be in conflict with those of the revenue team.
- Variable compensation metrics
- Net new ARR = new logo + expansion – downgrade – churn
- Efficiency/Profitability
- Sales efficiency = (sales expense) / (net new ARR)
(or similarly, CAC payback or LTV/CAC) - FCF Margin or EBITDA margin
- NRR and/or GRR (though technically part of net new ARR)
- Sales efficiency = (sales expense) / (net new ARR)
| Percentile | OTE ($) | Equity (%) |
|---|---|---|
| 25th | $450,000 | 0.75% |
| 50th | $550,000 | 1.0% |
| 75th | $625,000 | 1,5% |
CRO Coaches
(*) Recommended
- (*) Travis Bryant – Ex SFDC / Optimizly / Front
- (*) Jim Soss – Convex / Integrate / Responsys
- (*) Mike Weir – G2 / LinkedIn
- (*) Paul Williamson – Ex SFDC / Plaid