The CRO & CMO Relationship

Meet Host, Mary Grothe

Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue®, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.

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Mary Grothe: Hey, Revenue Radio®. This is a day I've been waiting for, for a year and a half. I'm Mary Grothe, for those of you who don't know me or can't recognize my voice if you're not watching the video. Today, I'm joined by, she calls herself this too, my right hand. So, this is my right hand, Sabrina. I just held it in front of her face. Another reason why you all need to start watching the YouTube videos and not just listen to you on your favorite podcast channel if you want to see this amazing studio.
Our CMO, Sabrina Ott is with us today. She is usually the one running these podcasts and sitting back behind the screen with her headphones on. I made her come out onto the other side because we have a topic that we're excited to talk about. Both of us are enrolled in the pavilion schools. I'm in CRO school. Sabrina's in CMO school. Yes. Some interesting topics have come up recently about the CRO- CMO relationship. I thought about bringing it on the show and then I said, "Great and you're going to do it with me."

Sabrina Ott: It wasn't really she said, "You're going to do it with me." She just put it on my calendar, and I knew what that meant.

Mary Grothe: Oh, yeah. I don't even think I told you. Yeah. You're used to working with me for this point. So, Sabrina joined us in May of 2021. I'm so bad with years. Immediately, she stepped in and took control of our brand. It had been built well to that point. I was super used to it. I absolutely loved the marketer that we had in that position before.

I had worked with her for years. Sabrina came in just a fresh set of eyes and perspective, and the Swiss Army marketer background just said, "I have so many ideas." It took us a couple of months to figure out the working relationship, dynamic, and communication. Ever since then, I'd say, "Here. Take it. Take it. Run with it."

Everything you know of House of Revenue® and our other brands - the "Mary Grothe" brand and the "Do Remarkable Work." I mean, everything that Sabrina touches has just turned into gold. She also is my fractional counterpart on the investment we both made this year in a little tech company called Spotz. So, I think we are qualified to have this conversation today.

Sabrina Ott: Oh, yeah, absolutely.

Mary Grothe: So, you are sitting in on CMO School the other day and you were sharing some insights with me. We came up with some talking points for today. Let's dig in on the CMO, CRO role. One of the first talking points was about habitual avoidance. Tell me what you imagine with habitual avoidance. Why are the CRO and CMO avoiding each other?

Sabrina Ott: I think it can be quite a bit of thing, but it must really come down to they don't understand each other's roles. Then, they're afraid of being found out because when you get to the C-Suite, not everyone has all the answers. We are all learning on the fly, and you just feel like you're not going to live up to their expectations.

Mary Grothe: It is hard because the CRO and CMO are high-turnover roles. The CRO is 17 months start right now. Do you know what CMO is?

Sabrina Ott: It's about 18 months.

Mary Grothe: Oh my gosh.

Sabrina Ott: Just dropped from 19.

Mary Grothe: I mean, this is the battle. You have two people very passionate about revenue, and the CRO, in theory, should be very holistic. They themselves should understand brand strategy, go-to-market strategy, marketing, sales, CS, and revenue operations.

Unfortunately, that's very few CROs that are out there. A typical CRO is a glorified sales leader, and you have the CMO. What is the CMO's typical expertise and lineup?

Sabrina Ott: Typically, they have done multiple areas of marketing, and they have that marketing strategy and brand background.

Mary Grothe: I agree. I think it's like a love and a passion for constant research and complex analysis. The marketer, in my opinion, at that Chief Marketing level should have a great pulse and handle on what is happening in the market. You know, I saw a post on LinkedIn. They were thinking about changing CMO from Chief Marketing Officer to Chief Market Officer.

Sabrina Ott: I saw that, too.

Mary Grothe: Maybe I saw it because you liked it. I put it in my newsfeed, [laughing] which is how I like half of Sabrina Ott liked it, then I'm going to like it, too.

Sabrina Ott: LinkedIn knows I do the same thing. She'll like something, and then I'll follow up and like it.

Mary Grothe: It's great. We've been working together for a long time. A Chief Marketing Officer has a lot of weight, but there's also habitual avoidance. There's been a feud and an argument between the CRO and CMO for a long time. Some of the things I know exist as Chief Revenue Officers or you know, even in that Head of Sales position, they feel like the bigger targets on their back. They're going to get fired first versus anybody that's in charge of brand top-of-funnel awareness marketing throughout the 360 flywheels, et cetera. I know that's an area of frustration. Where is a CMO frustrated about a CRO?

Sabrina Ott: I would say it's the alignment on metrics because as we're getting as marketing is progressing in the field, it's becoming more data-aware. If you don't have metrics that align to your pipeline, to your funnel and they constantly change, everyone's going to be arguing all the time.

Mary Grothe: Yeah. Most marketers aren't data-driven. How critical is it at the C-level for a marketer to be data-driven?

Sabrina Ott: It is critical because once you get to the C-level, you're looking at how everything impacts the company, your team members. Team members are, at that point, not your department, it's your peers in the leadership team. So, it's how do you support them to help everyone be successful?

Mary Grothe: Yeah. The funnel can cause some strife. I think what you're saying with the data is the two people in the seats, the CRO, CMO. They need to agree on the same funnel and that I know for House of Revenue®, we talk about data a lot. This is the cool thing about Sabrina, and I think in this relationship with a CMO, CRO. If you're CMO or if you are a CMO, is not presenting data weekly, monthly, quarterly, and owning it when numbers change or there's variance, that's a problem.

Mary Grothe: Sabrina comes to me all the time. Well, one, she's conditioned me to read the dashboards that she built that auto emails me every week, has explained what the metrics are, why they're important, why they're in the dashboard, and why I need to keep my eye on it. As a marketer, she's not just looking at top of funnel. She's actually gauging the quality of every single lead and its conversion rate throughout the funnel based on the lead source. She's being able to come to me and report and say, "Hey, have you noticed? Did you see that? Hey, I was looking at this report. Oh, hey, hey, great."

Wouldn't it be brilliant if a marketer could understand the traffic sources that have the highest conversion, the shortest time to close, and the highest average revenue per sale and then, on their own accord, because they're data-driven or data-informed and manage the funnel alongside the CRO? They can optimize their marketing campaigns and tactics because they know what converts. They didn't have to wait for the CMO to say anything.

Sabrina Ott: Exactly. It's so important for marketing to not only be reactive but be proactive. Why is a lead source not converting? Is it because they don't have the correct materials, the enablement to help them close? And what can we do to help that along further?

Mary Grothe: Yes, and I think there's always been this argument that marketing needs to get out in the field with salespeople. They need to hear frontline what those prospective client conversations are. We have a feedback loop here with how prospects engage in our messaging. In fact, today, two times in one week, we had two CEO prospects say, "I read every page of your website and it's as if I had written it myself or that you were speaking exactly to me." How does that come about? How does a Head of Marketing, who's in charge of messaging from brand awareness through every stage of the funnel into client marketing, how does that get achieved?

Sabrina Ott: Primarily, how I achieved it is I got in the mind of our CEOs. I followed them everywhere that they were so, interacting on LinkedIn for this ICP, Ideal Customer Profile and that really became ingrained in their lives. What's great is that with Mary she's the CEO of House of Revenue® and really getting to know her has allowed me to speak more to these CEOs.

Mary Grothe: Yeah, that's great and probably a little scary. Maybe that's what CEOs are, a little crazy, but maybe that's why it's resonating with them. I didn't even think about that. You're translating the day-to-day experiences into it, which is imperative. Let me go to the next item on our list, so you have a bullet point on here that says, "Let's be partners."

I have yelled from the rooftops about the CRO-CMO relationship, especially as I call you my right hand. You are in my ear on things that I need to know and giving me an option of whether I do something about it or not. The leading indicators of trends are critical. You're on a client right now, so I'm able to watch Sabrina inside of a Slack channel in the way that she's analyzing the market, always ahead of trends and being proactive in informing the CEO of potential pivots, shifts, and things we need to be aware of. Talk to me about that's my perception of the CRO-CMO partner. Where do you see a CRO being a good partner to you as a CMO?

Sabrina Ott: I see the CRO being my partner in the sense that they have the pulse on what sales is doing and what they're about to try. Then, I'm able to come in and say, "Actually, if our market's going to be enterprise clients, we need to address them in a different way, a different tone of voice, a different writing strategy or content strategy. Everything that can convert the client or customer to a client. Be their partner and realizing that nothing is ever a silly idea, it just might be a better way to go about it.

Mary Grothe: The CRO-CMO partnership like we opened up about the avoidance factor, there's also a fear factor of "I don't want to be found out. I don't want them to think I'm a weak partner or I'm not pulling my weight." Unfortunately, a lot of that can seep into you and then it can hinder the quality of performance, quality of work.

Also, I'm working on an engagement right now, just on the side for fun because I don't have enough to do with my time, and a marketing campaign was suggested. I've stepped in interim, very short-term CRO while they have a gap, and they're said, "Hey, we're going to launch this marketing campaign."

I thought, "Okay. Okay. Okay. Hold on." It's an email campaign. "When does this go out? Who's the audience? What is it about? What is it for, and as Head of Marketing, how are you anticipating that this is supposed to turn into leads?" I'm responsible for the conversion, so you're doing this huge top-of-funnel campaign. I have no time to prove it, read it, or figure out. What is the strategy behind this, but that's okay. I'm high urgency, I can figure it out. Before this launch is, we should never be sending a marketing campaign unless we know what the expected outcome is.

Marketing should make you money; I think that's the partnership between the CMO and the CRO. No campaign should ever go out. No email, newsletter, webinar, trade show sign-ups, or anything for marketing should ever go out unless in partnership with the CRO. The conversation is, what are we trying to achieve by doing this? What is the pre and post-strategy? Then, how do we evaluate its performance of it to determine if we should be doing this again?

Sabrina Ott: Exactly. An even more important point is how we can support everyone by knowing the same message and being able to talk about it. We should let the sales team know every time marketing puts something out like a campaign and then know how it will impact the customers and their sales relationships. If they're going to a store and talking about a recent campaign that came out and you're giving away an item for free, what if that store doesn't have that item in stock?

Mary Grothe: Yeah, not good.

Sabrina Ott: That's not good at all. Now, the customer is disappointed. You made a terrible first impression if that's their first time visiting. You don't seem in alignment. It seems like the company doesn't chat with each other.

Mary Grothe: Take that strategy to the next, where people aren't chatting with each other. There's no alignment, and it feels like a wasted effort. What about a webinar? Do you expect that your content is so good that a bunch of people is going to proactively reach out and say, "I'd like to learn more about your services and sign up?"

Most webinars are educational. They're not sales pitches. People weren't signing up for the pitch. There needs to be pre-work done, and then there needs to be work done on the back end. That's another example of a partnership with marketing and sales.

I know we had a CEO workshop here at the office last year, and we had the attorney lists ahead of time. We looked it up and profiled everybody. We made sure we were connected with them. We looked in our database if we had past conversations or relationships with them. We knew who they were. That way, when they came into the office, I had my list created of who. So, rather than just saying, "Hi, I'm Mary. Who are you?" We knew the names. We knew their companies. We knew the size, the company, the industry, where they were located, or the revenue.

Mary Grothe: You can find out so much on the internet. I was already putting together, "I think this is what it is." Then, we had a dual strategy effort while we were in person. We also had embedded calls to action inside the presentation that was not salesy. We built automation on the back end of those, our resource guide, and whatever else.

After the event, we had it all laid out to have strategic conversations. We had a call to action in that kind of that freebie offering and extended it from there. If we just hosted a webinar or a workshop and had people come in the door, but there's no strategy before and after. Again, marketing could be like, "Hey, let's host an event or a webinar on this."

Sabrina Ott: Okay. How are we going to follow up with them?

Mary Grothe: Well, yeah. How does it turn into anything? Where do we get our ROI on this? That's funny because this was a lesson learned back when I was selling payroll, my second time. I noticed getting people to meet was a little bit more difficult. From 2006 to 2010, telemarketing was still great. People picked up the phones. It was awesome. The email wasn't spammy, and there weren't automation tools. At least my company didn't have them. So, every email I sent was by hand and custom. They were high value, had personal ties, great reply rates, and easier-to-get meetings.

I went back in 2014. I'd thought, "Okay. My country is bad, and I don't have any meetings." I have to get creative, so I started to hold events. I didn't have the marketing wherewithal, and I did not have any marketing support. It was like one salesperson trying to be brave and had zero conversions from those events. There was just no strategy behind it. I'd thought," Great. Now, I did a whole bunch of words, and I got people out of the office. There was no strategy, there was no follow-through, and there was no pre-call plating.

Mary Grothe: They didn't turn anything, and I think partnership is critical. What about social media? What can a company and a brand do from a company social media account where it falls flat versus if the entire sales team is embracing a new social media strategy?

Sabrina Ott: There's a trending topic now called "Dark Social." A lot of companies do not want to put in an effort on the social media front if they can attribute it to closed revenue. One of the great things we do here, with all our clients, is we have a deal lead source. That is the source from the actual client. “How did they hear about us?” I, as a marketer, want to hone and do more outreach and more thought leadership and get everyone on the same page. Even training them on how to use LinkedIn properly.

As a marketer, I can even go out there. I can recommend the services of a client, of our services, tag them, tag their company page, and then maybe 30 minutes, 15 minutes later, replies to the company. It looks like the company is customer service-focused, customer experience. It's not just the look. It is the entire ecosystem of client relationships. There's client communication throughout the entire funnel. You can be both. You can act as a salesperson and a marketer and embrace each other's tactics.

Mary Grothe: Well, I feel like we must. Otherwise, the strategies are siloed, and the execution is siloed. They don't match if the company brand is posting content but not replying, not engaging. Then, proactively reaching out and commenting on other brands or individuals, it's a huge mess. So often, when you look at, "Hey, this is the marketing strategy for social. This is our social media playbook. We post to LinkedIn two times a week." We then take that post, and we change the hashtags, and we post on Facebook, and then we do a tweet. But because it has a character limitation, what we do is we take the copy from LinkedIn, and then we trim it down, and we post the exact same content, just in a shorter form on Twitter. "Oh, my gosh, guys. That’s social media strategy is so 2015."

Social media today is all about engagement. The marketing and sales teams should be perfectly blended in that effort. Also, the customer success team and account managers. They own relationships with those people. The company should be commenting on their client's posts and with their executives. What if your brand was engaging with the executives of your clients?

Mary Grothe: Doesn't that look like you're invested and care? It's a great strategy, and people see that. This is yet another example of a good traditional marketing tactic without pulling in the CRO without working in partnership. It's just checked-the-box marketing, and it's just posting for the sake of posting, which is why many of the alignments between CEOs and CMOs fall flat.

What else is on our list to discuss? Silent contempt. Don't understand the challenges of other roles. Don't understand the why behind other role decisions. So, you mean decisions are sometimes made, and the other person doesn't agree with them and takes the time to understand? Do you have an example of this?

Sabrina Ott: Silent contempt in the world of sales and marketing is not so silent, most of the time. You have MQLs that don't convert to SQLs. So, marketing qualified leads, sales qualified leads, and all of a sudden, marketing is in hot water. Then, marketing replies, "Hey, we sent you all of these leads, and they were qualified for you to reach out to them after a certain amount of time with lead scoring." That creates that silent contempt. When you don't understand what the other department is doing, you cannot edit things to make them work better. For example, if the tools are not converting in marketing, how can we make our messaging more targeted to the customer we're targeting? How can we speak their language? From there, how can we enable sales to close those deals? It's the before and after that, they're qualified as an MQL.

Mary Grothe: Well, the feedback loop is critical. There is a point of contention between the CRO and CMO when there's a lack of communication and alignment on the metrics. There's an effort made on the marketing side. I love LinkedIn, by the way. You will see people be very vocal about whether every aspect of marketing drives revenue or whether some of it is for awareness that potentially pays dividends down the road but doesn't have an exact relation to revenue today.

Not everything in marketing is campaign-driven and can be traced back. There are different pieces, but in all, when you look at the differentiation between a brain strategy and more top-of-funnel, very high, high, high pre, before falling into the funnel awareness tactics through the brand. Also, when you look at where marketing strategy would come in, what do we do once we have them attracted into the funnel? When we look at the misalignment between the two and where that causes, the friction is marketing is constantly held to being quantified and producing results and producing revenue.

But I don't think all marketing departments,, have experience being data-driven marketers and understanding how their efforts turn into dollars. And then the CRO in some organizations, marketing rolls up underneath. They're responsible for that number and making sure they have the funnel pipeline conversion metrics. And so it can create a lot of stress and strife and frustration when the two are not aligned, or there isn't clear communication going between the two of them.

Sabrina Ott: Exactly. I suggest having your marketing team if it is an enormous enterprise-level team. Even having your Marketing Director up in your sales meetings so that they can hear from the salespeople’s mouths once a week, what are your customers saying? What are their pain points? Then, you can take that information, create materials, and create messaging that helps drive more qualified leads.

Mary Grothe: Yeah, I agree. I'm going to switch gears here as we start wrapping up and coming to a close. I used to be anti-CMO. I thought a CRO was all that a company needed. The messaging on our website used to be very anti-CMO.

Sabrina Ott: You don't need a CMO. You need a Chief Revenue Officer team.

Mary Grothe: Exactly right. It wasn't until you fully stepped into a CMO role that I understood and experienced the value. Now I've been able to experience it. It started with our investment earlier this year. Then, the way you elevated, we had some changeover in staff. When you fully stepped into the right-hand position, thank you for helping me every day, and fully stepped into that did, I realize the value of what this is. There are a lot of phony revenue leaders out there. They can tell a good story. They may have a cool success story on their resume because they were at the right company, at the right time, with the right product and some tailwinds. But like anybody, honestly, in that role, I would have been successful with that story.

Then, there are the people who have fought through the ups, downs, failures, and successes. I've been in the trenches. I've had a couple of failed launches. All of those make us so much stronger and smarter. It wasn't until I had Sabrina in this right-hand position that demonstrated what an actual data-driven Chief Marketing Officer could do.

We're missing the mark. We're missing the mark on what we're offering right now. We didn't have any CMOs employed at House of Revenue®. I thought, "Wait a second. This is what we're missing." This is what Sabrina and I have been able to do at House of Revenue®, specifically in this pairing. "Oh, my gosh. We must recreate this. It has been such a joy to have this born from data, experience, and firsthand experience. Now, we've got this relationship example that others get to follow.

Sabrina's an anomaly, and I get it. She's getting to work on a client because we had an empty seat on our team. She's demonstrating for the CRO she's working with, someone else on her team, and what this partnership looks like. I don't think he's ever experienced a CRO-CMO pairing. I'm sorry for the time when I was very anti-CMO. But the thing is, it's because I had never met a brilliant, the weeds, working with me day-to-day. I want to be careful with what I say. Earlier in our history, we had two fractional CMOs that worked with us, and they were brilliant, but I thought them is very expensive.

I can only get them a part-time contract because they're both brilliant. They work fractionally and make a lot of money, which they should charge a lot per hour. I felt it was untouchable for us, the size we were, and everything else. I just had this in my mind. They're the gold standard. It's either of them, or I'll never be able to afford them. They don't even want a full-time job, anyway. Or it's this run-of-the-mill CMOs that had good success with a big-name company. Whether they did anything or not, that company was going to be successful. I never had it until we had you in the seat. I feel like this whole rebirth of our model Let's go.

Sabrina Ott: Exactly. It's all about that partnership and trust. For me, I can thank my success, really, to Mary. She taught me sales. She allowed me to jump in on engagements and be a part of the sales team. I was fortunate to sit in on sales meetings at other companies throughout history. I didn't realize that's what so many companies didn't do.

Now, I know the story behind where they're coming from and what's driving their urgency. With that stated, without Mary's mentorship, I would have never succeeded without the right technology. So, attribution software, we use HubSpot here, and realizing my value as a marketer changed my life. It allowed me to see what is working so we could focus on that.

Mary Grothe: Yeah, that's special. The sentence of what changed your life is seeing the value. I think that's very difficult for a lot of marketers. I'm very grateful for what HubSpot can show us. I just spoke to Inbound, and Sabrina helped me prepare the case study slide for House of Revenue® and to see the millions that have been driven. I don't do outbound prospecting here. Millions have been driven and qualified pipeline through marketing. I think it was mind-blowing for both of us.

Sabrina Ott: Exactly. At House Revenue®, we qualify individuals and companies when we send them a contract. If they get a contract in their inbox, they're fully qualified to sign on as a House of Revenue® client. That stated, we heard by the end of this year, we're set to drive about 10 million in SQLs, Sales Qualified Leads. To date, our closed revenue percentage for inbound marketing is 70 to 73% and above 70 is a great marketing team, according to stats I've read.

Mary Grothe: Above 70 is unbelievable. What it's helping us do is now be pickier about who we bring on. That's just the truth of it. When you have a great marketer pairing with the CRO, and the two can build a funnel like this, your company has a choice in how you bring on as a client.

So, from CEO to CEO, for those of you in that executive position, we've all had clients like, "Wish we didn't have them as a client. They were super difficult. They dreamed margins like nothing you could do can please this person." We've all had that. It's a blessing that we are not with our backs against the wall. "Oh my gosh. We need revenue." We need revenue because we've been there a couple of times in our business where it's just to sign anyone who's willing. This is so beautiful on paper, but are they qualified? Absolutely. We're very specific about who we serve on the stage. They're in their revenue size, their industry, and a couple of other factors.

There's also a piece that's very hard to qualify: the psychographics of the person you're going to be working with. So, the lifestyle characteristics, their ego, their emotional intelligence, their IQ, if they're collaborative team players, if they can take coaching, or if they're just super pigheaded, stubborn, and hard to deal with. A lot of those things.

You look at the qualified pipeline, it's tremendous, but now we're in a position where we can be picky and choose the projects because of the beautiful pipeline we have. That comes from having a very full pipeline of qualified opportunities. In turn, if we have the opportunity to decide who we bring on board, we bring on only good clients with good projects.

Then, the employees are happy. The clients are happy. Everybody's winning, and it's very puppies and sunshine, happy day, which is like my whole life and what I strive for. So, it is a beautiful and beautiful marriage with it. We've got to wrap, and I'm going to share some of my encouragement. I want to hear yours.

They exist for those of you who haven't yet had that CMO in the seat. They're out there. They're data-driven. They're brilliant. They hustle. They love revenue. They understand conversion. They want to work in partnership. They stand firm in their recommendations. They're not a pushover. They like the creative side of marketing and, more of that, ultra-top of funnel into awareness.

They also love tracking that through to conversion and getting it into customers' hands, customer marketing, and working toward adoption, retention, expansion, and advocacy. It's a lot. We don't even talk about today. However, they're out there. They exist. Be patient and find the market because I think the pair of the CRO and CMO, I think it's going to change revenue engines. What do you say?

Sabrina Ott: I agree. I would add that you might have someone already on your team that hasn't had the opportunity to get there yet. When you have the right marketing attribution software, you're asking your sales team to ask their prospects, "How did you hear about us?" in every conversation. That marketer on your team can then step into that role because they'll be able to make those decisions.

Also, allowing them to continue their education, I'm in the CMO school with Pavilion right now, and it's just amazing to see all these different perspectives and all of these different ways people communicate, the way they project manage, the way they pitch investors, and getting that great opportunity to learn from people in your own industry, let alone peers and others. We'll have CRO and CMO School. They're there to learn about marketing, better support their counterparts, and vice versa. I know this spring, I probably want to do CRO School.
Mary Grothe: Good. I'm going to do CMO School.

Sabrina Ott: There we go. Exactly. Then, I can know more how to support the CRO in this role.

Mary Grothe: Oh, my gosh. That's the amazing thing about you. All revenue leaders should cross-train. I do see this incredible blend of the CRO-CMO. I hope today's episode was encouraging for you and gave you a little bit more of a glimpse into what this relationship can look like in your organization.

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