Customers’ perceptions of products have shifted because of the digital landscape. There is always a need for new features and advancements. To deal with the ever-changing consumer, it’s critical to have a strong product function in place to facilitate business growth through products.
Once your growth stage startup has identified its core product-market fit and raised funding to expand, the challenges of scaling several operations to support future growth will almost certainly require the CEO to evolve to include more operational issues, warranting the hiring of a Chief Product Officer (CPO). But how do you know it’s the right time?
Due to the widespread misconception about what a CPO does and how important they are, most startups tend to invest in VPs of Product who advise C-level executives. This article will discuss the role of a CPO and when and why you should hire one.
A CPO is an executive who oversees the entire product function and is accountable for the product’s strategic direction. Product vision, innovation, design, development, project management and product marketing are commonly included. This role is also responsible for distribution, production, and procurement in many tech companies.
The CPO is in charge of the product management (PM) team, which is tasked with creating quality products that provide long-term value to the company. A CPO balances the demands and goals of both the product and the business from the early stages of developing a new product concept to beyond product launch.
The CPO oversees all product decisions, but they also interact with other C-suite executives. The CPO reports directly to the CEO, a CTO will investigate the product development aspect, and a CMO will look into how the product should be marketed.
Our research found that only 14% of RetailTech’s have a CPO. However, the growth of SaaS apps and the evolution of product management as a separate discipline has resulted in an increase in the number of CPOs.
Product teams are becoming as important as engineering and marketing, meaning companies are recognising the need for a person who can bring a deeper product perspective. A CPO who knows how to structure and manage organisations that understand customers and respond quickly can be a valuable leader, especially when backed up by the right product team.
Main Responsibilities Of A CPO:
- Build, communicate, and constantly improve the RetailTech’s product vision, design, strategy and operational plan.
- Develop and maintain a high-performing product team committed to constant advancement to attain customer loyalty and wider business goals.
- Work on product innovation to help the company stand out from competitors and boost customer acquisition, retention, and revenue growth.
- Create solid working relationships with internal teams to ensure cross-functional team collaboration.
- Research the market to have informed decision-making across the organization
Smaller RetailTechs typically don’t have a CPO and are content with Product Managers. As a company advances in the product life cycle to the growth phase, the role becomes more relevant, and it’s a must-have for large RetailTech scaleups concerned with providing a great customer experience.
Since CPOs are typically hired when a company’s operations begin to scale, RetailTech CPOs haven’t been around for long and are still defining their responsibilities. With RetailTech being a newer industry, the talent pool for CPOs is very niche, which means that many companies compete for the same people. However, as more retail technology companies recognise the cross-functionality of a CPO, a broader network of talent is gaining access to the role.
With the ever-increasing role of e-commerce affecting RetailTech CPOs, products and services must entice customers while also keeping up with the digital transformation.
When To Hire A CPO
According to our findings, RetailTechs with Series C funding or higher are the most likely to have a CPO. Regardless of the data, as a developing role, you can hire a CPO earlier if you meet some of the following criteria:
1. Rising development costs without increasing the rate of growth.
If your development expenses have been rising in the past few quarters while revenue growth has stalled, even in a thriving market, it may be time to hire a senior executive to help review product and growth plans and prospects. This type of evaluation requires your company to make better use of data and analytics when assessing the prospects that will significantly drive the next wave of growth, which necessitates a higher level of expertise and experience than what a senior product manager might provide.
2. Customer experiences and business strategies that are inconsistent across product functions and life cycles.
When there are numerous teams working on a product, such as product management, design, new product development, customer success, and sales, it’s possible that they aren’t all on the same page about the product vision, and their KPIs are inconsistent. A CPO can create a unified customer vision and lead these formerly separate functions to improve the customer experience and value flow from start to end.
3. You’ve only hired generalist product managers, and you’re finding critical expertise gaps in strategy, data, and product operations.
You can seize the opportunity to develop a mature product function within your organisation that combines strong and clear strategy with strong and clear execution. To maintain growth, specific product expertise in areas such as pricing, design, architecture, inbound and outbound growth strategy, and product operations will need to be hired for and established, with a CPO overseeing and leading them.
How Much To Pay A CPO?
Salary ranges rely on a variety of things, including education, certifications, additional abilities, and the number of years you’ve worked in your field.
The average Chief Product Officer salary in the United States is $252,780 as of February 25, 2022, but the range typically falls between $223,080 and $281,680.
In the UK, the average salary for a Chief Product Officer (CPO) is £98,266 but the range is from £48,000 to £185,000.
To keep up to date with the latest RetailTech salary trends, click here to access our salary hub.
What Makes A Great Chief Product Officer?
Although a good education and a lot of product-related experience are important, they aren’t enough to succeed as a CPO. The following is a list of five important skills and personality attributes for a C-level position.
As a product leader, the CPO brings together people from all backgrounds to work collaboratively and achieve a mutual goal.
CPOs who are effective are always excellent communicators. Their goal is to send a clear statement to executives, product teams, and customers about the product’s value. The capacity of the CPO to inspire everyone with the product vision is critical to the solution’s success.
3. Customer focus
The product leader evaluates the solution in terms of its value to users and prioritises improved customer experience.
4. Business acumen
Product is a revenue-generating function. A CPO should satisfy customers along with generating revenue for the company. By having strong business acumen, one can quickly assess market conditions and spot profit prospects.
5. Strategic thinking
Strategic thinkers consider the big picture, analyse large amounts of data for trends, and propose fresh solutions to old issues. CPO’s that are strategic thinkers can predict customer requirements and wishes before they emerge, putting them ahead of the competition.
Storm5 has placed a large number of CPOs in some of the world’s leading RetailTech and e-commerce companies, so get in contact with us today if you need skilled and experienced support.