Understanding the Difference Between a CRO and a VP of Sales: A Comprehensive Guide for CEOs

As I meet with Founders, Owners, and CEOs weekly who are keen on scaling their companies, one of the frequent topics we delve into is understanding the difference between a VP of Sales and a Chief Revenue Officer (CRO). This distinction is crucial for structuring an effective revenue organization. Here, I will provide a clear definition of both roles and offer insights into their functions within an organization.

The role of the Chief Revenue Officer is relatively new. Historically, the VP of Sales was the pinnacle for sales professionals. However, as companies grew and more of the buying process moved outside the classical sales focus, there was a need for a role that encompassed more than just sales. Thus, the CRO emerged. Unfortunately, many people equated the CRO directly with the VP of Sales, leading to confusion.

The term "revenue" in CRO signifies all the revenue streams – and with it the entire customer buying process - within a company, not just sales. This includes sales, customer success, marketing, and brand strategy. The CRO is responsible for the entire revenue funnel, which makes the role vastly different from that of a VP of Sales.

To understand the CRO's role, it's essential first to differentiate between the various sales leadership positions:

Sales Manager: A Sales Manager leads a team of salespeople. Their primary focus is on achieving sales quotas. They are deeply integrated into daily sales activities, deal progression, and ensuring that the sales team has the necessary tools and support from revenue operations and marketing. They are also responsible for removing roadblocks and liaising with operations to ensure smooth implementations.

VP of Sales: The VP of Sales oversees the broader sales organization. Unlike Sales Managers, VPs of Sales should not be directly managing salespeople. They focus on higher-level strategic tasks, such as understanding market trends, competition, and optimizing the sales process. They are responsible for setting sales targets, allocating budgets across sales teams, and ensuring the efficacy of the sales playbook. They also lead Sales Managers, ensuring they are effective in their roles.

Chief Revenue Officer (CRO): The CRO's role extends beyond sales. A proficient CRO should have experience in marketing, brand strategy, customer success, and go-to-market strategy. They are responsible for the entire revenue ecosystem, from top-of-funnel marketing efforts to customer retention and advocacy. The CRO should act as the right hand to the CEO, integrating all revenue-related functions to ensure holistic growth.

A common mistake is promoting a VP of Sales – or a VP of Marketing - to CRO without ensuring they have the necessary skills in marketing – or sales, customer success, and overall revenue operations. A true CRO must understand how to drive revenue from all angles, not just sales. When hiring for a CRO, it's crucial to find someone who has balanced experience in sales, customer success, revenue operations, marketing, and brand strategy. They should have a track record of scaling companies and solving complex revenue problems holistically.

Why Founders, Owners, and CEOs Need a CRO

Many revenue problems within organizations stem from having department heads (sales, marketing, customer success) without a unifying leader. The CEO, while visionary, should not be bogged down with the intricacies of revenue operations. This is where a CRO comes in, integrating all revenue functions and providing a cohesive strategy that aligns with the company's growth objectives. A company may think it has a sales problem when, in reality, the issue lies in branding, marketing, or customer support. A CRO can identify and address these issues, ensuring that the entire revenue ecosystem functions efficiently.

Understanding the distinction between a VP of Sales and a CRO is vital for any CEO looking to scale their company effectively. While a VP of Sales focuses on managing and optimizing the sales team, a CRO oversees the entire revenue ecosystem, ensuring holistic growth. Hiring the right CRO, with balanced experience in all revenue functions, can be a game-changer for any organization, driving sustainable and integrated revenue growth.