The backbone of every successful sports team is a strong executive and leadership team with a clear vision of the future. As ownership and general managers bring in players to play for their team, they also bring in sales teams that bring in the partnerships and sponsorships that keeps the franchise financially stable.
So, although for most big market franchises, tickets and merchandise sell themselves, it is prudent to hire the right person and team to manage this. It’s time to discuss the very important decision of hiring a Chief Sales Officer or a Chief Revenue Officer for your organization.
The two positions of CRO and CSO are very closely related. While an organization can choose between the two, there is no detriment to hiring one of each. After all, the two positions deal with different segments of the business. Sales and revenues are often used interchangeably, but there is a very real difference between the two. Perhaps, the easiest way to look at it is this:
All sales are revenues, but not all revenues are sales.
A professional sports franchise has countless revenue streams bringing in money to the organization, but this does not mean that it sees a lot of sales.
Sports franchises need to be run like well-oiled machines. Some are worth billions of dollars and are valued more than some S&P 500 companies. It often takes an army of staff and a very competent leader to keep things organized, so you can begin to see why hiring the right Chief Sales Officer or Chief Revenue Officer is a crucial piece of the executive team. Let’s dive a little deeper into what these positions do, and how to hire the right person to do the job.
Sales! Well, that’s a little too simply put, but you get the idea. A Chief Sales Officer or CSO deals with sales within the organization. They set target goals, forecast growth, and make the important decisions that shape the sales team, one of the most important groups in the entire franchise. Your perfect Chief Sales Officer:
The right Chief Sales Officer knows exactly how the ownership wants the team to be portrayed in the community and can target the perfect partners to shape this portrayal.
The complexity and intricacy of a sports organization does make this job more difficult than a business with a single sales channel. Everything from merchandise, tickets, concession stand offerings, and community sponsorships, need to be executed to perfection.
The key is to continue to grow the sales targets of the organization regardless of the performance on the field. Clearly, the job is made easier when the team is winning games and making deep playoff runs, but every franchise in sports has their down years. The Chief Sales Officer needs to show that the team can be monetizable and appealing to fans, even in losing seasons.
Professional sports franchises obviously have an easier time with sales, given that leagues like the NFL and NBA have such wide distribution networks.
For smaller markets there is more of a challenge, and even though most leagues have evenly distributed merchandise revenues, the sales team still needs to be exploring every avenue to advance sales growth.
The role of the Chief Revenue Officer or CRO demands more of a strategist than someone who wheels and deals and woos clients. Revenues are all encompassing in an organization and include a broad spectrum of streams. Finding news business, marketing, and renewals and upsells are just some of the segments of the revenue side of an organization, and while a Chief Sales Officer thrives on taking action, a Chief Revenue Officer sits back and builds a strategy that ensures maximum profitability in the long run.
While a background in sales certainly wouldn’t hurt, a Chief Revenue Officer can come from any number of backgrounds. They could be a marketing expert that knows exactly which message the team sends out to the community. They could be a logistics expert that strategizes with numbers and calculations. Truthfully, the almighty dollar is what makes or breaks an organization, so the Chief Revenue Officer needs to simultaneously be thinking about the present and the future.
The CRO role was created in Silicon Valley by early tech companies. It was meant to try and maximize revenue streams that could be made from a given product or software. It’s a nice analogy to use for a sports franchise, as the organization uses a single product on the field: the team’s performance. From there, organizations can get creative with how many revenue streams they can make from that main product.
The right Chief Sales Officer for your team has a strong background in sales, preferably as a member of your organization. Executing and closing deals is the most important part of the job, so like with any sales position, charisma and professional agility are keys to success. Sales are one of the most important ways to bring revenue into the team, so while the product on the field often sells itself, the products off the field need a little more help.
One of the most important skills for any executive is building the right team and support system around them. The Chief Sales Officer will have an eye for skilled salespeople, and surround themselves with a team that has the same long-term growth targets in mind. The right Chief Sales Officer knows your organization inside and out and has an eye for up and coming trends that can benefit the franchise.
The right Chief Revenue Officer is a tactician and has a broader view of the organization. This is not to say they know more about the way the franchise operates, but by default the Chief Revenue Officer needs to be aware of more than just sales. While your Chief Sales Officer is relentless, a Chief Revenue Officer is methodical and uses tools like data analytics to make decisions that will impact the entire organization.
The Chief Revenue Officer needs to be concerned with things like acquisition cost, relative pricing, customer churn, and lifetime customer value. This position needs to forecast how the organization will be making money ten years from now, and what about the industry will change in that time. In the end, the entire organizational strategy must be considered, compared to solely focusing on a single segment like sales.
Some organizations do have both a Chief Sales Officer and a Chief Revenue Officer. In these cases, it is more likely than not that the Chief Sales Officer will report to the Chief Revenue Officer. Sales is just one segment that the Chief Revenue Officer needs to be concerned with, so it makes sense to have the hierarchical system set up in this way. This should be seen as more of a complement to the overarching responsibilities of the Chief Revenue Officer, rather than a slight to the Chief Sales Officer. Both positions are crucial to an organization’s success and can work cohesively to provide the best possible leadership within a unified executive team.
Hiring both makes sense for large professional sports franchises. When it comes to smaller organizations like collegiate, junior, or minor league franchises, then you could probably get away with only having a Chief Revenue Officer and delegating the sales responsibilities under their umbrella. There is no one correct method and every organization is going to be in a different situation.
Like with many successful companies, appointing a Chief Sales Officer or Chief Revenue Officer from within is often a prudent suggestion. Right from the start the chosen executive will know the organization well and have knowledge of the future growth potential of the franchise. When hiring a Chief Sales Officer or Chief Revenue Officer, you are handing over the keys to how your organization will make money in the future. With the right person in that position, the business side of the sports franchise can flourish, no matter what is happening on the field.
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