What is a Fractional Revenue Leader?

In today's fast-paced business landscape, not every company requires or can afford a full-time Chief Revenue Officer (CRO). Enter the Fractional Revenue Leader—a modern solution for companies seeking expert revenue guidance without the full-time commitment. This guide will delve into the essence of this role and its burgeoning significance.

A Fractional Revenue Leader, often equivalent to a Fractional CRO or VP of Sales, is a part-time executive who provides strategic revenue leadership and tactical support. They bring seasoned expertise to the table, assisting companies in optimizing their sales, customer success and at times marketing functions without being a permanent fixture on the payroll.

Expertise on Demand: You gain access to top-tier revenue leadership without long-term obligations. If you this is not your first venture than you know well that in the ever-evolving world of SaaS, standing still isn't just detrimental—it's a death knell. You need to move, adapt, and pivot. And for that, you need expertise. Not just any expertise, but top-tier, tried-and-tested, been-there-done-that expertise.

Cost-Efficiency: Hiring a full-time CRO can be a hefty investment. A Fractional CRO offers a more budget-friendly alternative. To put this into perspective, the average total cost of a Sales Leader right now is $453,623. That is not for the best of the best. That is the average...

The reality is that most Fractional Leaders will only cost you somewhere in the range of $8k to $25k per month depending on their usage and experience. Either way it's going to cost you less because you are only paying for what you need.

Flexibility: The average tenure of a VP of Sales is generally somewhere in the ballpark of 18 months give or take a month. Sometimes that is because the flat out fail and we hang on too long. Other times it is because the uber successful and you now need the leader who is going to help you scale the next stage. In any case, volatility is baked into the role. Especially for companies between $1 - 50 million. Flexibility is key here because it is the expectation on both sides and it means you can hire a specialist for the exact needs right now vs. a generalist who needs to stay productive past their ceiling. 

So, here’s the real kicker. What if you could get this expertise without the baggage of long-term commitments, equity splits, or the capital strain of a hefty C-suite salary? Sounds like a dream, right?

Enter the world of Fractional Revenue Leadership.

Scaling a business is akin to navigating a ship through turbulent waters. Different tides and storms demand different strategies. At the helm of everything revenue is your sales leader. But how do you know when to hire one and what to look for in the right leader.

There are many types of Sales leaders. If you subscribe to Jason Lemkin there are at least 48 types of sales leaders alone. We believe it is even more nuanced than that. That is something we will get into in more detail in another article but for simplicities sake here are the most common times to bring in a Fractional Revenue Leader:

Early-Stage Startups: When you're still validating product-market fit and can't commit to a full-time executive. Generally this role will look more like an advisory service to the CEO pre $1 million in Revenue. Between $1-5 million is where this starts to function like a true early stage VP Sales who is primarily focused on making the selling function repeatable with a foundational sales team.

Growth Stages: When you're scaling rapidly and need expert guidance to navigate the complexities. There are many stages each with their own nuances. Fractional Revenue Leaders primarily get brought in between $5-30 million in revenue. What you need from a sales leader will change rapidly every 12 - 18 months throughout this range.

Transitional Periods: During mergers, acquisitions, or major organizational shifts.

Again this is going to vary widely based on the stage and needs of your company but here are the top 10 most common support areas:

1. GTM Strategy Development: Crafting revenue growth strategies tailored to the company's goals.
2. Sales Forecasting: Predicting future sales and revenue figures based on historical data, current pipeline status, and market trends, and aligning these forecasts with company goals. This involves breaking down annual goals into quarterly or monthly targets and ensuring the sales team is aligned and motivated to achieve them.
3. Deal Closing: Playing a key role in important sales opportunities with major clients or partners, ensuring favorable terms and successful deal closures for the company.
4. Metrics and Analytics: Implementing KPIs and monitoring performance to drive results.
5. Hiring and Team Development: Building, mentoring, and managing a high-performing sales team to ensure they have the skills and resources needed to succeed.
6. Sales Training and Onboarding: Establishing structured training programs to ensure that new sales team members are well-equipped to perform their roles effectively.
7. Pipeline Management: Overseeing the sales pipeline, ensuring that leads are properly nurtured and moved through the funnel, and that there's a consistent flow of potential deals.
8. Stakeholder Communication: Regularly liaising with other company executives and stakeholders to keep them informed about sales progress, challenges, and needs.
9. Product Feedback Loop: Collaborating with the product and customer service teams to relay feedback from customers and prospects, ensuring that the product evolves in line with market demands.
10. Sales and Marketing Alignment: Ensuring both departments work cohesively to maximize revenue.

Choosing a Fractional Revenue Leader requires diligence. There is a reason so many CEOs get this hire wrong. Generally there are 5 crucial criteria to get right.

Stage Relevance: Look for a track record where they have scaled companies from your current revenue to your target revenue as many times as possible. Going for the person who has only seen later stages than you might feel good but will be a recipe for a nose dive.

Sales Relevance: There is a long list of what goes into getting this right. I want to know that they have sold a similar ACV and Sales Cycle, from a similar lead source (outbound, inbound, etc) through similar channels (direct, partnerships, etc). I want to know the size of sales teams they have managed and their style of management. I want to know what methodologies and tools they have implemented and why that made sense for those companies. I want to know where they will need to depart from their previous tactics to tailor to our businesses needs.

Industry Relevance: This one is two-fold. Have they worked in my industry (ex. real estate-tech, HR-tech, mobile app development, etc) AND have they sold into most of my target customer industries. When you get this one right on top of sales & stage Relevance it is a home run. That being said we have seen stage + sales relevance being far more impactful when hiring fractional.

Culture Fit: Ensure their values aligns with your company's culture and values. Less important for a team of 1-2 sellers but as you get to 5+ getting this right will make a big difference. Many teams inherited by a Sales Leader have some bad apples on the team that may be producing but are not a good culture fit. A culture fit leader will not tolerate this and make decisions that may feel disruptive upfront followed by an immediate and sustained spike in the rest of the team's productivity. 

Adaptability: They should go in expecting that this venture will be different than their last. Finding the nuanced differences is the difference between good and great in this role. With that the must then be adaptable, understanding the unique dynamics of your business.

Commitment Concerns: As they're part-time, ensure they can dedicate adequate time to your business. There are a few ways to make sure this never becomes an issue:

• Agree on expected timeline the role will be needed
• Agree on expected hours committed per week and per month
• Set expectations on communication response times
• Identify a few times throughout the week that can be consistently dedicated to your company

Acting as Part of the Team: Integrating a part-time executive into the company culture may seem like a challenge. The reality is that if you bring the right person in this should not operate any differently than a full time hire. The team will see them as an outsider, if they are presented like an outsider. Instead focus on less on their employment status and onboard them the same way you would someone else.

A great Fractional Revenue Leader understands that they need to not just provide guidance but also build trust and foster a sense of unity across their team.

As businesses increasingly seek agility and expertise without the long-term financial obligations, the demand for fractional executives, particularly in the revenue domain, is on the rise. This trend is reflective of a broader shift towards flexible, result-driven leadership models.

The Fractional Revenue Leader embodies the modern approach to executive leadership—agile, efficient, and laser-focused on results. For companies at various growth stages, this role offers a strategic advantage, combining expert guidance with unmatched flexibility.