6 CRITICAL CRO DECISIONS #1 Comprehending Your Customer: The Foundation for Shaping Success

Last week I set out the backdrop against which CROs are operating today. I highlighted that there are a number of choices CRO’s make on a daily basis and, more importantly, at a strategic level. There are six specific decisions I’ve witnessed across a variety of B2B businesses large, small and across different industries and geographies, that separate winning CROs from the rest of the pack. These decisions blend personal and business themes, require both hard and soft support, and require a mix of art and science in their execution. But the one common denominator is that they make these decisions consciously, with a very deliberate goal in mind.

Having laid out the six decisions previously (the WHAT and the WHY), I want to take time diving deeper into HOW these decisions are driving outcomes. Over the coming weeks, I’ll share examples of the supporting initiatives and techniques that are being deployed by CROs to support these decisions and generate real-life impact.

Decision 1: They create a full comprehension of the customer

In other words, CRO’s ensure that that they forensically understand every aspect of their customers’ (and potential customers’) world – their pains, their gains, market scale, dynamics, the value and so on. They recognise that before they decipher what propositions, services and support structures they need to build they must make this landscape the foundation of everything they do. They look at the world through the eyes of their customers, imagine what it’s like to be a part of their company and learn about the pains they are trying to cure.

In addition, they don’t make the mistake of thinking this is a one-off exercise. They put mechanisms in place to ensure this understanding is topical and continually updated. They keep their finger on the pulse.

Here are some specific actions CRO’s can take:

? Create an owner for ‘market intelligence’

It is key that someone has responsibility for understanding the customer landscape and for keeping abreast of market developments. In a fully scaled organization, this would classically fall under a marketing role. In maturing, smaller businesses, this responsibility may form part of a more hybrid role.? But, in any business, some of the initial market scoping and sizing effort may be best undertaken by an outsourced consultancy – leveraging their knowledge, experience and resources. Key components to understand include: market dynamics; the ecosystem (including companies, competitors, partners etc.); their respective shapes/sizes and/traits; the ‘sweet spots’ for growth (using appropriate criteria).

?? Quantify the size of the prize

Black belt CRO’s understand, objectively and scientifically, the full potential of growth for the business. They’ve quantified it using the best available market data and by using reasonable conversion assumptions. Understanding the ‘art of the possible’ enables CROs to have an educated debate with stakeholders (especially the CFO!) on targets and budgets. It’s part of setting expectations and controlling the audience.

Armed with this knowledge, CROs can refine the underpinning operating model and quantify the returns on investment. In short, they understand their universe and control the level of ambition with which they attack it.

?? Understand who are the company’s most important customers

One of the first questions I ask when meeting a new CRO is “who is your most important customer?”.? I regularly witness a short spell of tap dancing followed by the name of the ‘largest’ customer. I have various views on what constitutes the most ‘important’ customer but rarely does it depend solely on revenue size.

At the very least, CROs must have an understanding of customer lifetime value (LTV) using whatever criteria is suitable. Typically, this includes some variation of revenue/margin over time and may include some form of acquisition cost. For true value, I advise looking at customers through a growth opportunity lens.

? Deploy feedback loops for market dynamics and customer intelligence

The greatest source of intelligence often sits within your own organization. Equally, it can reside within your ecosystem of partners and suppliers. But, commonly, this intelligence stays in the heads of individuals dotted around the organization.

One method to capture this knowledge is to deploy a simple platform for sharing feedback. One good example is Chatter in Salesforce CRM – a collaboration space where anyone can pop gossip, market news etc. on line for anyone to access and share. Marketing teams can sift this news, in parallel, and collate content into more formal trends (e.g. customer pains/gains by sector).?

?? Engage actively within industry bodies

Customer-centric CROs ensure the business has membership of specific industry bodies relating to their customers’ world. These bodies typically align to the vertical sectors within which their customers operate. Aside from creating a vehicle to engage with various businesses in the sector, the forums become a great source of education.

Aside from passive membership, CROs should be presenting within these forums – maximizing the opportunity to express opinion, educate attendees and increase credibility.?

If you are interested in understanding more about these 6 decisions and how to make them happen join me at my next live webinar on 11 November 2024 at 5PM GMT (45mins).

Register here: https://optilium.co.uk/webinar-registration/