business-development-vs-sales

What Is Business Development? The Complete Guide To Business Development

Business development comprises a set of strategies, tactics, and actions to grow a business via a mixture of sales and marketing. Indeed, while marketing usually relies on automation to reach a wider audience, and sales usually leverages on the one-to-one approach to close complex deals. Business development is about creating distribution strategies to scale up a business.

A good business development process should have as the primary aim to drive business growth with strategies, partnerships and unconventional marketing to 10x the output of the organization. The success of companies like Google also depended on their business development capabilities.

Although you might be looking for a straightforward definition of what business development is, you need to understand that this is a discipline in continuous evolution, which has as a main driver business growth. In this context, a good place to start is to define what business development is not.

Business Development vs. sales

Thinking about the business developer as the sales guy, it’s limiting. Not that a business developer doesn’t sell, but it does so by creating a distribution. In other words, rather than looking at the single sale the business developers try to find sales channels to tap into to speed up the process of scaling up a company. If that means selling a product or a service directly, then the business development person will temporarily become a sales guy.

Imagine the scenario of a company that has no clients. In that context, a business developer will need to find the first clients as quickly as possible. Those clients will serve to launch the company’s growth, while the business developer will look strategically at ways to have those clients to become partners. Therefore, all of a sudden a few clients become your distribution channel. Even though the business developer acted as a sales guy from the outside, he never lost sight of the long-term strategy.

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The successful business developer thinks like a marketer but acts like a salesman

Business development is a mixture of sales and marketing. In fact, in many cases, a business developer will use marketing and PR activities to establish critical relationships for the business. Those relationships will become partnerships to generate new distribution channels.

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Business development is about nurturing the right relationships with partners that can become distribution channels

Where the sales process ends up with a closed deal. The business development relationship starts with a closed deal. The business developer knows that a deal closed is just the starting point of a long-term relationship that can impact the business in the long run. Therefore, the business developer will translate that paying customer in a trusted partner, and an advocate for your business.

Business development guides marketing automation

Marketing automation is a powerful tool for any business. However, marketing automation is also risky. Indeed, automating processes requires a deep understanding of your customers. Thus, before you can automate the marketing processes, you’ll need the business developers to help the marketing team structure those processes. Indeed with unique insight about the company’s customers, the industry and competitors, the business developer will advise the marketing department on how to structure and set up automation processes that fit the long-term organizational growth.

Business development scales up businesses

When Google closed its deal with AOL, it was a turning point for the tech company that would become a unicorn first and a tech giant then. It all started with a business development activity that allowed Google to build a partnership with AOL and kill its competitors!

A successful business development person is a quick learner and a renaissance man. He will be able to learn about as many disciplines needed to have a deep understanding of the industry that will drive the company’s growth. For instance, if you think of a business developer in the digital marketing world, he’ll probably be someone that understands SEM, SEO, funnel optimization, content marketing, sales and all the other channels available to grow a business.

Business development is about a growth mindset

The business development process could vary quite a lot based on industry, business model and stage of maturity of a company. If you are called as a business developer for a startup, most of the activities will be connected to grow the startup and bring it to the next stage of growth.

Therefore, the successful business developer will need to have a mindset fine-tuned for growth.

Business development requires a high level of understanding of a potential partner

To be able to build a relationship quickly, a business developer has to understand the business dynamics of a potential partner. Indeed, just by tapping into the economics of a partner, the business developer can craft the perfect deal/solution. For instance, when Google proposed the deal to AOL, the deal was so good for AOL, and it had no risk for them, that they couldn’t say no to it. Yet AOL was an established network, which was what allowed Google to get into the next stage of growth and scale.

What activities does business development imply?

Anything that helps build up a solid distribution strategy falls into the business development processes.

The sales pipeline is a basic tool for a business developer

A sales pipeline is as a visual representation of your sales process where all your potential customers are displayed and neatly arranged according to their phase in your sales cycle.
Source: salespop.pipelinersales.com/sales-professionals/what-is-sales-pipeline

A business developer has to be able to build up predictable sales processes to generate continuous streams of leads for the organization. The sales pipeline is a useful tool to set up those processes.

Also, being able to track your sales pipeline is a critical activity. A sales pipeline is just a way to have clear in which stage of the sales process you are with a potential client. As shown by Sales POP from the initial contact to closing a deal it takes a few steps:

  • Initial contact
  • Qualification
  • Meeting
  • Proposal
  • Close

At each of those actions, we can assign a probability of closing a deal. For instance, at the initial contact, you don’t have an idea yet whether the person you’re reaching out would later become a customer. Therefore, the more you move forward down the pipeline, the more the chances of closing the deal improve. Sales POP research shows that each of those stages has a chance of success as it follows:

  • Initial contact – 0 %
  • Qualification – 10 %
  • Meeting – 30 %
  • Proposal – 60 %
  • Close – 100 %

Therefore, after you have qualified a lead, you have 1 in 10 chances of closing it. Once you have met, defined the project and sent a proposal, then your chances will improve up to 60%. The chances of closing a deal also depend on other factors. For instance, have you previously worked with this person?

In short, if you have already built trust, it will be easier to close the deal. If you are expanding a project you were working on, then it might be easier as well. Therefore, it will depend upon several factors crucial to any deal.

Yet the business developer can have clarity about the stage of a business deal. In that way, the business developer can plan the actions and activities that will get the sales process going.

What actions can the business developer perform to improve the sales pipeline?

There are several ways to improve sales processes. Some examples comprise:

  • Experimentation with new tools, or channels
  • Finding out new tactics from your peers
  • Creating new partnerships
  • Managing existing partnerships to expand the scope of work
  • Direct sales (outreach, live demonstrations, free training)
  • Off-line activities (live seminars, or industry events)
  • Content marketing or PR activities
  • Talk to clients to improve product/service
  • Learn how to build relationships with influencers
  • Use LinkedIn for social selling
  • Experiment with new distribution channels
  • Develop relationships with media partners
  • Create new packaging for your service
  • Draft commercial offers
  • Up-sell, cross-sell, leverage on the core product to offer complementary services
  • Create sales processes
  • Build up a predictable sales funnel
  • Help marketing to build sales funnels for continued lead generation

Why undertake a career in business development?

Being a business development person means having an entrepreneurial spirit. It’s almost like you are a business within your business. Therefore, working as a business development person helps you:

  • Develop an entrepreneurial mindset
  • Get more freedom compared to a traditional job
  • Dynamic work that pushes you to learn new things quickly
  • Make more money (the variable is an important part of the remuneration)
  • Higher pressure but also more fun than a traditional job
  • Be your own boss (if it is in a large organization, of course, you will respond to someone. However, the only boss you have are the commercial objectives you agreed upon)
  • Build a professional network quickly

What are some downsides?

Of what I can think of here are some I identified:

  • The bottom line is your mixed blessing. In fact, although you might be doing things right for specific periods, you just don’t seem to be able to close enough deals, partnership or create a proper distribution strategy. From the outside that might look like you’re not doing your job properly. What I like to call the outcome bias. In those periods you have to be good to think about your track record
  • Your pay is proportional to the objective you’re able to achieve. Therefore quite volatile
  • Some days it just seems you’ll never get to achieve the financial results agreed. It is normal to feel like that. The good side of it is that you’ll feel what any entrepreneur experiences

Overall the balance is positive. Now the most critical question. How do you make a business get traction?

The channels you can use to get traction

Gabriel Weinberg, CEO, and founder of DuckDuckGo, a search engine that doesn’t track your data, put together in his book, Traction a list of channels that are critical to allow a business to grow. He identified quite a few channels:

  • Targeting Blogs
  • Publicity
  • Unconventional PR
  • Search Engine Marketing
  • Social and Display Ads
  • Offline Ads
  • Search Engine Optimization
  • Content Marketing
  • Email Marketing
  • Viral Marketing
  • Engineering as Marketing
  • Business Development
  • Sales
  • Affiliate Programs
  • Existing Platforms
  • Trade Shows
  • Offline Events
  • Speaking Engagements
  • Community Building

As a business developer, you need to understand some of those channels to grow a business.

What’s a secret weapon for the business developer? LinkedIn

65% of salespeople who use social selling fill their pipeline, compared to 47% of reps who do not. source: blog.hubspot.com/sales/sales-statistics

LinkedIn is a fantastic tool to generate conversations that can help you speed up the prospecting phase. What can you do with LinkedIn?

  • Find new B2B clients
  • Build new partnerships
  • Get media coverage
  • Personal branding for business

Those things are possible if you are consistent. Three ways to build relationships with business are:

  • Outreach to people that might get value from what you offer
  • Use LinkedIn publishing to create awareness or become a thought leader in your niche
  • Share and like posts about people you admire to strengthen your relationship and create value for your network

Check out the complete guide on how to use LinkedIn. 

At the end of it, it’s about listening

Based on the research by Hubspot those are the top four ways to create a positive sales experience, according to buyers:

  • Listen to their needs (69%)
  • Don’t be pushy (61%)
  • Provide relevant information (61%)
  • Respond promptly (51%)

Therefore, it is critical to learning to listen, which does not mean thinking about what you have to say next when the other person is listening. But instead to focus solely on what the other person says emphatically. One mantra I have (or at least I try) to follow is “how do I create value for this person?”

Once that becomes hardwired, it will be much easier to get things going!

 

Published by

Gennaro Cuofano

Creator of FourWeekMBA.com | Head of Business Development at WordLift.io | International MBA

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