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 business development representative (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:
- What is business development?
- What are the skills required for business development?
- Sales development vs business development
- How Sales and Business Development can better work together
- The future of Business Development
What Is Business Development?
The most accurate definition of business development is a set of tasks and processes meant to develop and implement growth opportunities within (and between) organizations in a sustainable and profitable way. In practice, however, 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.
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
But how is this different from marketing anyway? At first glance there seems to be a lot of overlap between business development and marketing, but there are some key differences.
What’s The Difference Between Marketing and Business Development?
The division between business development and marketing can often be hard to identify, and can be made more difficult by the fact that business development can look drastically different from company to company. Here’s the difference: Marketing is primarily about attracting new leads and customers. Business development is about building relationships with organizations to generate new opportunities.
Let’s go a little deeper here, though.
Marketing is the customer-facing branch of your org. Like we mentioned, the primary goal is to attract customers. This is done in three ways:
- Identifying your ideal customers by creating an Idea Customer Profile (ICP)
- Maintaining a consistent brand and using various channels (website, social media, ads, etc.) to stay at the top of your ideal customers’ minds.
- Educating customers about your organization, products, and offers.
In many cases — usually with smaller B2C offerings — this is enough to get a prospect ready to buy. At that point, they’ll either call your sales team or make a purchase on your site.
For everyone else, especially B2B, marketing is only the first stage in the journey, and this is where business development comes in.
Business Development Activities
Business development is all about relationships. The primary goal is to form strategic partnerships and relationships with other organizations in your target market.
This may include developing a relationship with a lead founder to push them closer to a sale. It can also mean leveraging current relationships to generate referrals and develop new markets in different geographic areas.
What Are The Skills Required For Business Development?
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, communication, and sales skills:
1. Marketing Skills
While business development executives focus on building relationships, they also need to be able to promote their brand, gain deep intelligence of new markets, understand the competition, identify and educate new target prospects. So these business development activities significantly overlap with those of marketing.
2. Communication Skills
Calling prospects, maintaining long-term relationships with strategic partners, listening to concerns of potential clients, and sharing valuable information with stakeholders requires strong communication and listening skills. It’s hard to succeed in the world of business development without being able to communicate confidently and clearly.
3. Sales Skills
BDRs usually share common skills with sales representatives, including prospecting, qualifying leads, nurturing relationships with both potential and existing clients, and updating sales customer relationship management databases on all sales activities including follow ups. BDRs typically work closely with sales team members to move prospects along the sales process.
If you think about it, a good BDR is a bit like a CEO. BDRs have to think quickly and strategically to win opportunities and stay ahead of the competition. As BDRs, we have to be entrepreneurial and visionary in the way we approach our work.
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.
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.
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.
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.
Did you know that only 28% of sales reps say marketing is their best source of leads? This is where business development comes in to help close the gap between sales and marketing.
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 business development 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 activities are meant to spot and qualify new opportunities. Sales tasks revolve more around understanding the prospect’s needs and win them 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 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 fact, organizations that take the time to determine who their ideal customers get 68% more wins in sales.
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.
In fact, companies that have aligned their sales and marketing teams with clear business development initiatives have increased their customer retention by 36%.
Fortunately, there are 4 important things you can do to make it a successful relationship between Business Development and Sales:
- Clearly define the sales and business development positions
- 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, especially if you have sales and business development teams working from home. 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.
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.
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.
Stat about leads
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.
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 business development 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.
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.
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. According to the 2020 Future of Jobs Survey by the World Economic Forum, business development positions are the sixth most in-demand emerging job roles, where data scientists came in first.
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!