This article has been adapted from JD Miller’s keynote presentation at the Chief Revenue Officer Summit in Chicago 2024. Become a member to watch the full presentation.
Let's talk about a harsh reality in revenue leadership – the average Chief Revenue Officer (CRO) tenure is now only 17 months.
That's right – less than a year and a half before you're out the door.
As someone who's successfully navigated this challenging landscape, I'm going to share the strategies that have kept me not just employed, but valued by boards throughout my career.
I’ll cover:
- The CRO turnover problem
- Building your annual plan
- Weekly reporting
- Negotiating expectations
The problem of CRO turnover
First, let's break down the economics of CRO turnover.
Chief Revenue Officers typically make around $200,000 a year plus another $200,000 in bonuses. That’s $400,000, a typical six-month severance, and three months of interviewing to find your replacement.
So replacing a CRO isn't just a leadership change – it's an expensive proposition. Your board won’t fire you on a whim, so what is pushing boards to fire CROs?
Most boards aren't firing CROs because sales are bad. It’ll take time to build those sales numbers up, but without communication, you won’t get far.
Boards fire CROs because of misaligned expectations.
91% of companies miss their annual targets. But longevity isn't about being in that magical 9% who hits every number. It's about creating a transparent, collaborative framework that helps your board understand the complex realities of sales performance.
Ella Harrison
Building a bulletproof annual plan
The foundation of board trust is a meticulously detailed annual plan.
This isn't about creating a document that looks good—it's about building a living, breathing strategy that accounts for every potential variable.
Realistic goal setting
When we recruit CROs into jobs, we give them these big directives, like growing your revenue by 20% next year.
But if that's where the conversation ends, I think we're setting ourselves up for failure, because growing revenue by 20% can be really easy or really hard, depending on your business.
For example, two sample clients that I work with, both $100 million in ARR, have very different situations:
- One has really high customer satisfaction, retaining 95% of their clients every year. And those accounts are growing. So the task of from 100 million to 120 million in ARR is actually pretty simple. They only have to find an additional $13 million of really new revenue.
- On the flip side, another 100 million dollar company has terrible customer satisfaction. They churn about 20% of their clients every year, and they're selling in an industry that's contracting, not growing. They're looking for $35 million of new revenue to get that same 20% growth result.
So when boards, CROs, and CEOs haven't had this explicit conversation the customer situation and market environment goals may seem realistic when they aren’t. So as a new CRO, we can set ourselves up for success by driving that discussion.
The customer renewal strategy
Once you have a target, start building a granular customer renewal strategy that goes beyond surface-level metrics. This means deeply understanding each customer's satisfaction level, potential for expansion, and risk of churn.
This means:
- Listing every customer up for renewal
- Assessing customer satisfaction levels (red, yellow, green)
- Developing a specific strategy for each account
- Tracking potential price increases and churn risks
Measuring customer satisfaction isn't as straightforward as many assume.
It requires a multi-dimensional approach that combines product utilization metrics, net promoter score (NPS) surveys, help desk feedback, and direct customer engagement.
By creating a comprehensive view of your customer landscape, you transform from a number-chaser to a strategic revenue architect.
Rebecca Stewart
Modeling your sales machine
Vague growth targets are the enemy of board confidence.
Instead, break down your growth strategy into granular, measurable components. When will new hires start producing? What's the expected impact of your training programs? How will new product launches contribute to revenue?
Create a month-by-month model that accounts for:
- Sales team ramp times
- Historical performance
- Potential team turnover
- Recruitment and onboarding timelines
By providing this level of detail, you demonstrate not just ambition, but a methodical approach to revenue generation.
Align with marketing leaders
Some CROs have marketing within their responsibility, and some people have marketing as a partner.
A common conversation between a CRO and a CMO might go like this:
“You're not giving me enough leads.”
“I've given you so many leads, your sales team doesn't know what to do with them.”
In these cases, it’s best to take a step back and focus on the assumptions being made.
Look at your win rate and average sales cycle length, or average sales time to align with our marketing colleagues at the beginning of the year on how many of the leads we generate are we expected to win, and over what time horizon.
This allows us to have a really specific conversation about where revenue might start to fall if something goes wrong.
Rebecca Stewart
Utilizing weekly reporting
Now that I work on the private equity side and the board side, I like getting information shared with me as part of a weekly flash report. At a minimum, most CROs forecast and report on what closed deals have been booked today and what's expected.
This chart is my favorite thing to:
- Deliver to my board, and
- Receive as a board member.
Let’s walk through it.
The red dotted line is what the business plan calls for us to sell this quarter - around $3.8 million. The dashed line on top shows how much quota is assigned to the sales team. We like to have 20% extra quota assigned so not every seller has to hit 100% of their number, accounting for potential team turnover.
Across the bottom is the week of the quarter. If the assigned quota drops in week four or five because someone left the organization, we can still see we have more quota assigned than the business plan requires.
The green lines show the weekly forecast: the top line is what the team has committed to achieve, and the bottom line tracks actual bookings. The best scenario is when these lines converge and rise above the red dotted line.
Boards get nervous about big forecasts.
Especially when a leader says they're forecasting to do really well but haven't closed anything yet. That's why I overlay a gray and black line showing the booking shape from the previous quarter and the same quarter last year.
It's a simple yet powerful tool that keeps boards informed with just one weekly data point that your revenue operations team can update.
This graph, alongside a couple of bullet point actions every week, is all it takes to keep my board satisfied and off my back so I can continue working on strategy.
Ella Harrison
Negotiating realistic expectations within 60 days
When you first join, use those initial months to do these three crucial things:
- Align on realistic goals
- Explain potential challenges
- Create a transparent roadmap
The plan your predecessor had with the CEO and board is likely to be very different to the organization’s current standing. This makes it so important to align on what the expectations were and how realistic they are now.
Because, frankly, in the first year, I'm probably not going to hit the number the board has in their head, but I can at least tell them what expectation was missed and why we didn't get there.
Your board don't want to hear about missed targets from their new CRO. But you have to clear it up in the first two months to increase your tenure and gain the board’s trust in the long term.
I've gotten really good at saying, “Listen, you hired me because I'm a professional. I'm going to give you the bad news, and I'm going to give you a path forward. So here's our plan…
“Here’s what I’m expecting us to hit month by month, and what we’re assuming each component of the plan is going to be. I hope we outperform it, but this is what your sales teams are capable of.”
If your board thinks you’re a sandbagger, ask them directly: “Here’s the annual plan, what do you think I’m sandbagging on?”
From there we can discuss their expectation and what needs to happen for us to meet that target.
Lastly, don’t be afraid to slightly lower the expectations for the first few quarters to give yourself a fighting chance. For example, when looking at a quarterly spread of revenue, I know we’ll probably hit 23-24% in Q1 – but I’ll target us at 20% so I come out of Q1 a winner and the board starts to trust me.
This gives a totally different narrative than missing Q1 and Q2 targets and then narrowly catching up in Q3 – as far as the board’s concerned, you're already a loser.
Final thoughts
The CRO role is challenging, but it's not impossible to master. By implementing these strategies, you'll transform from a potential short-term hire to a strategic leader your board and CEO can rely on.
Remember, boards don't just want numbers. They want transparency, proactive problem-solving, and clear communication.
Looking to network with fellow Chief Revenue Officers and revenue leaders?
Discover our Chief Revenue Officer Summits in London, New York, Amsterdam, San Francisco, Chicago, and more.
