Sales. Business development. I am amazed by how often these two terms are used interchangeably, where the latter is often used as a fancier term for the former.
Often, when I talk to those responsible for Business Development and the activities they are involved in, it turns out they are really talking about Sales. Conversely, when I talk to those responsible for Sales and who are good at it, turns out they put a lot more emphasis on Business Development activities.
Sales and Business Development are two distinctly different activities, and in today’s rapidly evolving business environment we would do well by knowing the difference.
I would even venture to say that a well-developed understanding of Business Development, and an ability to do it well, is decidedly more important in today’s rapidly evolving marketplace. A focus on Business Development will give you a new perspective on your firm’s purpose and its future growth and direction. Business Development is concerned with the future of your business.
What is The Difference Between Sales and Business Development?
Sales is generally well-understood. It involves the transfer of title or ownership of a product or service from seller to buyer at an agreed-to price. Simply put, Sales is about generating transactions. On the other hand, there does not appear to be a universally accepted definition of Business Development.
Most attempts at a definition suggest that Business Development covers a range of activities and that it is somehow related to value creation. It entails tasks and processes to develop and implement growth opportunities.
It is also suggested that Business Development has a unique role in the innovation process, and that it is inherently collaborative and integrative in nature. Ultimately, Business Development is about generating qualified leads for a product or service offering.
Which Is More Important?
It is not a question of one being better, more important, or more desirable than the other. They are in fact complementary activities. The approach to Business Development and Sales tends to come from very different, yet complementary and reconcilable orientations.
Where you should place emphasis will depend on what is a higher priority within your organization at a given point in time.
If you have clear market validation for your offering and are consistently closing a high proportion of prospects, then allocating more attention to Business Development to prospect for leads should be your number one priority. If you have more leads than you can deal with, then your focus should be on closing more Sales.
If your tendency is to be purely sales-driven, then you are not investing in your future, and it is less likely that you will turn prospects into clients. This is because you have not invested effort into understanding their needs and wants – this is fundamental to Business Development.
If, on the other hand, your orientation is pure Business Development, then chances are that it will be difficult to acquire new clients. You need a good balance of the two orientations.
Growth starts with the Business Development mindset, and it is no coincidence that rainmakers have this as a dominant trait – they build authentic relationships with clients; they have empathy and listen to understand their clients’ needs; they provide what clients want and need; they are able to show clients the value of what they will receive; they are able to bring clients to the point of transaction; and they remind clients of the value they are receiving.
How Do Sales and Business Development Work Together?
Knowing the difference between Business Development and Sales is helpful since it will spur better understanding, coordination, and collaboration between the two functions within your business. Depending on your organization, it may even be beneficial to separate these two functions while ensuring they collaborate effectively. Business Development should focus time, effort and energy on building relationships with qualified leads to the point that they can be handed off to Sales to become happy customers.
It is easy to see that very different skillsets and talents are needed to perform well in either of these two different, yet complementary functions. Those who can imagine future possibilities; are constantly in search of new knowledge and information; can build diverse networks; and know how to attract and maintain partnerships, do well in business development. Those who are highly persuasive; make the Sales process as simple as possible; and know how to engage customers in an authentic way, do well in Sales. Employees should naturally “fall into” the roles that come naturally for them according to their own talents and interests.
It is important to stress that the entire process of researching, prospecting, and qualifying to closing is a team effort. It therefore makes no sense to set targets and incentivize Sales when the client acquisition process is a whole-organization endeavour – this may well encourage behavior that is not in the best interest of the company. After all, acquisition of a new client is a team win and should be celebrated as such!