Posted by The Bowdoin Group on February 27th, 2018
Just last week, I was asked this question twice. I get it all the time.
The difference between a VP of Sales, CGO and CCO is a mystery for many organizations, so here’s my take on it with 20+ years of experience hiring for these roles in mind.
For each role, I’ve included primary responsibilities and “back of the napkin” compensation information for the average small to mid-sized company. Keep in mind that compensation can vary extensively from an emerging Series A round company to a large company.
A VP of Sales is inherently more tactical than a CGO or a CCO. They are responsible for a new business sales target and their entire purpose is to hit that goal. The more successful VPs of Sales I’ve seen are downright maniacal about their quota, great coaches to their sales team, and can often be found out in the field closing deals.
For a small to mid-sized company, compensation for a VP of Sales typically includes:
- Base salary: Ranges from $200-225K (up from $175-$200K in 2018)
- Commission: Up to two times salary
- Equity: Half to one point of equity
Chief Growth Officer (CGO)
A Chief Growth Officer (also known as EVP or SVP of Sales or Chief Revenue Officer) helps set the strategy for the sales organization. They work hand-in-hand with the executive team to optimize all things that generate revenue – from sales to marketing to business partnerships to pricing. I’ve noticed a slight lag in companies adopting this title, but many have embraced the EVP or SVP of Sales title instead. Regardless, the work they do is the same.
For a small to mid-sized company, compensation for a CGO typically includes:
- Base salary: Ranges from $225-250K (up from $200-225K in 2018)
- Commission: Two times salary
- Equity: One point of equity
To give this some flavor, I spoke to Tom Schultz, CGO of Evariant, a leading healthcare CRM data analytics platform, about what his job entails. Tom said, “My job is to determine the best ways to beat our competition, shorten our sales cycle, and maximize revenue and value to our customer.” Formerly the SVP of Sales at HealthStream, a healthcare workforce development platform, he said the roles of SVP of Sales and CGO are similar with the exception of the sharp focus on quarterly results for publicly-traded HealthStream. His advice for companies trying to determine whether they need a CGO was this: “If you’re having trouble trying to predict where customers or revenue is coming from, you need a CGO. My responsibility is to build a world-class sales organization and get everyone on board with that, including the executive team and the board of directors. That takes time and effort. In sales, you need continuity – if you deal with things on a one-off basis, everything is one-off, including your forecast.”
Chief Commercial Officer (CCO)
The Chief Commercial Officer (also known as President) owns the entire commercial function for an organization. They set the go-to-market strategy, and as such, are responsible for sales, marketing, delivery, and account management. This role has a seat at the executive table and presents directly to the board. This person may be being groomed to eventually lead the company.
For a small to mid-sized company, compensation for a CCO typically includes:
- Base salary: Ranges from $250-300K
- Commission: Two times salary
- Equity: One and a half points of equity
Which should I choose?
The answer to which of these roles you should choose comes down to what you want to accomplish as a company and the current make-up of the team. Consider the following:
- What are your goals? If you need someone to focus entirely on meeting a revenue target, you may need a VP of Sales. If you’re already hitting your numbers, but you need someone overseeing and setting the strategy for the entire sales function as well as delivery, you may be ready for a CCO. I’ve seen organizations that need a VP of Sales now and a CCO a year later.
- What growth stage are you in? If you’re in the process of growing and scaling, you may want to hire above what you need. If you’re focused on stability, what you need now is likely what you’ll need five years from now. As you begin your hiring process, keep in mind that you attract a very different level of candidate across these three roles.
- What skills do you already have on your team? You will want to thoroughly consider the talent you already have on your team. For instance, a CEO might want to own some of the responsibilities for the position you’re hiring for, like setting the go-to-market strategy. Alternatively, they may be ready to offload tasks completely because they’re more of a technical, product person. Determining the strengths, weaknesses, and opportunities on your team can help shape your thinking on whether you need a VP of Sales, CGO, or CCO.
What is your take on these three roles and how they function within organizations? Have you seen success adopting one or another? I’d love to hear your thoughts.
For more in-depth compensation information, read our 2018 Digital Health Market Brief or contact us for a custom compensation report.