What Is Business Development? (And Why It’s Vital to Sales Success)

business development
Sales Development

A few weeks ago, I had a conversation with the head of business development for a French logistics company. He was over the moon because in only 5 months he reached his goal of getting 10 qualified opportunities. And, even better, he managed to go beyond the target by closing a €350K deal.

The results were shocking. And even more impressive, he got those results in a brand new industry. 

Nevertheless, he got back to me a couple of days later, worried that he would lose his job.

As it turns out, the CEO was disappointed with these results because only one deal was closed. He expected more, and it didn’t matter that the BDR met his goals.

This story got me thinking about what business development actually means and what companies perceive it to be. 

So, what is business development then? And how does it interact with other departments? 

In this guide, I’ll explain:

  1. What is business development?
  2. Sales development vs business development
  3. How Sales and Business Development can better work together
  4. The future of Business Development

What Is Business Development?

There isn’t a standard definition of business development. In fact, most companies use the term differently, depending on what they need that role to do for them. 

For example, Business Development in a SaaS scaleup usually involves a lot of cold outreach to potential customers. In a big, multinational company, on the other hand, Business Development may do market analysis for new-market entry or a new line of products. 

Despite the differences, however, business developers across companies share one common goal: spotting and implementing new growth opportunities. 

Therefore the most accurate definition of business development is:

 

Business Development
A set of tasks and processes meant to develop and implement growth opportunities within (and between) organizations in a sustainable and profitable way

 

The key here is “growth opportunities.” In most situations, “new opportunities” means more than “new clients.” It also includes: 

  • Getting new partners
  • Entering new markets 
  • Developing new products

What Are The Skills Needed To Succeed At Business Development?

If you think about it, a good business development rep is a bit like a CEO. 

BDRs have to think quickly and strategically, so we can win opportunities and stay ahead of the competition. And we have to be entrepreneurial and somewhat visionary in the way we approach our work.

But in general, BDRs work with the sales and marketing departments, providing support so they can reach their goals. This requires a unique blend of marketing and sales skills. 

You see, we’re often the first contact point for potential clients and partners. Which means we’re the perfect people to gather insights directly from the market. That’s why this position can be extremely powerful when combined with other teams — especially the sales team, which is usually tasked with taking over opportunities. 

So let’s dive more into the relationship between sales and business development.

Sales Development vs Business Development

What’s the difference between sales development and business development? Since there’s no agreed-upon definition, as you might guess, there’s always confusion around how this role differs from sales roles.

Companies often consider business developers as sales reps with a fancier title. Nothing could be further from the truth. 

In fact, when companies treat business development as a part of the sales team, it tends to create misunderstandings and frustration — especially when it comes to revenue.

RELATED: How To Manage A Sales Team: 12 Expert Tips For Success 

For example, leadership might think a new business developer will close deals in a very short amount of time. But this is an unrealistic expectation for a few reasons.

  • Business developers mainly go after new opportunities, and those require longer times to close. 
  • Business development is not sales. So you can’t expect your BDRs to close deals in any time frame. (We’ll talk more about this in a minute.) 

This is just one area where unrealistic expectations can arise. So let’s look at 3 ways Sales Development and Business Development differ — and how each contributes to ongoing sales.

1. BDRs and SDRs work in different stages of the customer journey

In fact, these two functions cover different parts of the same customer journey.

customer journey

Top of the funnel – BDRs find new leads, start a conversation with them, and then educate them about our solution. 

Bottom of the funnel – Sales Reps and Account Executives turn qualified leads into prospects, and convince them to buy.

It’s like an assembly line. 

 

Business Developers fill the pipeline. Sales Reps and Account Executives nurture the pipeline and close deals, generating revenue.

 

2. BDRs and SDRs perform different tasks

Because BDRs and SDRs work on different stages of the sales funnel, they perform different types of tasks

Business Developers usually start conversations with cold leads. Therefore, they spend a lot of time: 

  • Attending events
  • Connecting on social media
  • Launching new initiatives 
  • Coordinating activities with marketing and sales

Sales reps usually engage with warm leads, people who are already considering their specific solution. Therefore, they spend their time: 

  • Conducting calls, demos, or meetings 
  • Consulting and problem solving with prospects
  • Convincing potential customers to choose them 

In general, the biggest differences derive from their different purposes. Business development tasks are meant to spot and qualify new opportunities. Sales tasks revolve more around understanding the prospect’s needs and win them over.

 

Business developers experiment with new and creative ways to generate leads. Sales reps use proven methods to win customers over.

 

3. BDRs and SDRs don’t always align on their target

But they should!

Despite their differences, business developers and sales reps basically work on the same sales process. This means that the two teams need to align on one key element in order to reach results fast: the Ideal Customer Profile (ICP) and buyer persona.

Business developers need to understand who the ideal target is, so they can focus on leads that the sales team can close. In the same way, sales reps need to quickly assess whether a lead is worth pursuing or not.

Surprisingly, not every organization is clear about who they’re targeting.

They may have a vague idea of who they should target. But they haven’t created an Ideal Customer Profile or Buyer Persona — so they haven’t worked out the details. And that has a direct negative impact on the way sales and business development work.

If business developers don’t know which audience to target, they’ll fill the pipeline with a lot of irrelevant leads. These leads will not convert into paying customers, which will create frustration for your sales team. 

Result: The company misses out on revenue!

In spite of their differences, the tight link between business development and sales means the relationship between the two is critical. 

How Can Sales And Business Development Better Work Together?

Business development and sales share a common goal: to make the company successful. However, sometimes the differences between the two teams can prevent you from reaching this goal. 

There are several things you can do to promote a better collaboration between business development and sales. These tips will help you increase performance by helping you hit your target consistently. 

RELATED: The Ultimate Guide to Sales Team Building Activities (+50 Recommended Ideas)

Fortunately, there are 4 important things you can do to make it a successful relationship between Business Development and Sales:

  • Clearly define the roles
  • Define your ideal customer profile
  • Organize regular alignment meetings
  • Promote transparency and continuous feedback
  • Link bonuses to team performance 

Let’s dig in.

Clearly define what BDRs and SDRs do

Business developers and sales reps play such similar roles, they can look like the same thing from the outside. This can create confusion when it comes to accountability.

If your sales reps don’t know what your business developers are doing — or vice versa — you might end up with trust issues, or worse, have steps in the funnel fall through the cracks. 

To give you a practical example, when I was a BDR for a SaaS company, I was only in charge of sending the first emails and would then pass the lead to sales. The problem was, my AE thought I was going to follow up on those leads.

As a result, nobody followed up with the leads, and we left a lot of money on the table. 

One common solution to this problem is the Daily Stand-up. But in my experience, it doesn’t work well. The meeting becomes routine, no one listens, and tasks continue to fall through the cracks. 

To help solve this problem, my business partner and I developed a Standup 2.0.

  • Every day we’d make a list of our tasks. 
  • As soon as one of us completed a task, the other had to cross it off the list. 

There are so many benefits to this approach. Your team pays attention to what everyone else is doing. You increase accountability. And with competition as a driver, you encourage everyone to do their best work.

Here’s how you can do it:

Partner one business developer and one sales rep, and let them do this daily exercise. After one week, mix the teams and form new partnerships. It’s fun and effective.

BDR and AE parter exercise

Make your ideal customer profiles visible

Not having a well-defined buyer persona can cost your company a lot of money. It’s one of the reasons why — even though you have a full pipeline — you are not meeting your revenue targets.

If you haven’t already done so, make sure you do thorough user research and create your ideal customer profile. This research will highlight details about your audience that you can use for everything from marketing to ads to content creation and, of course, to find new clients.

But be aware. Doing the research isn’t enough. You need to make it easily accessible to everyone.

If your file’s in a hidden folder, it’s of little help. Instead, create persona cards, hand them over to your team, stick them on your walls. 

Give your team a way to immediately review the information and double-check in case of doubt.

persona cards

 

Organize regular alignment meetings

One of the issues I faced in my relation with AEs was the lack of feedback from their side. Many times they wouldn’t process my leads because they considered them low quality.

Finding quality leads isn’t always easy, and that’s why continuous feedback is necessary to improve the quality level. 

To make sure there’s alignment between BDRs and AEs, set up regular meetings where you can:

  • Analyze different types of leads so you’re on the same page about what a quality lead looks like.
  • Get on the same page about what success looks like
  • Develop a more targeted approach to lead generation 

This way your business developers will have a clearer idea of what the company needs, and sales reps will have a better chance of closing deals.

BDR and AE alignment

Create experience-sharing moments

There’s nothing more eye-opening than trying to do someone else’s job. That’s why this team-building activity — “A Day in the Life” — is so powerful. 

The concept is, once a month, BDRs and AEs swap roles.

So I would take on the role of my account executive and the AE would take on my role. At the end of the day, the entire sales team would meet and share our experiences. 

It was a great exercise because it really helped me understand my colleague’s challenges and realize the impact of my activities on them.

Organize something similar so your team can develop a deeper understanding of what’s needed to be successful.

Link part of the bonus to team performance

I’m sure your team already has a generous bonus system. But if it’s based on individual performance, it’s likely falling short.

Here’s why…

Usually, Business Developers’ performance is linked to the number of opportunities they generate, while Sales Reps’ performance is linked to revenue. 

While this may work for AEs, it forces BDRs to focus solely on their number. As a result, they’re likely to develop lower quality leads —  pushing leads regardless of quality, resulting in lower conversions and sales at the end of the pipeline.

The solution?

Base part of the individual bonus on the team’s performance. With this approach, the team must work together to get the bonus. Since they depend on one another to hit the numbers, they’ll coordinate activities and push harder when they fall short of their goals.

The Future Of Business Development

Business development is a powerful tool for business growth — but not everyone understands it. As a result, it’s somewhat underrated and unappreciated. And the fact that it’s so closely tied to sales (but isn’t sales) creates even more confusion. 

We are now at a stage where business development is defining its borders. Companies are investing in this role to stay ahead of the competition.

And it makes sense…

Changes in customer behaviors make business development vital. People now have plenty of ways to find (or not find) your company, and business development is the only role that’s tasked with following the trends and finding new channels to connect with prospects. 

Of course, business development cannot get results alone. 

It needs to work closely with other departments to get access to the right resources and make things happen — especially sales, since they are the ones who ultimately turn business development into revenue.

That being the case, the best investment a company can make is to build a strong team that combines marketing, business development, and sales — all aligned and working together towards the same goal!

Lucia is a passionate business development expert and founder of The BD School. An educational platform entirely dedicated to business development. She created the online community, Business Developers United, with 900+ BizDevs and, together, they are shaping the future of business development.