What are the main differences between Sales and Business Development?
There are many articles and blogs that have been written to explain the difference between business development and sales and yet the confusion keeps going. Every time I see a job description pass by of a “Business Development Manager”, the core tasks are often oriented to pure sales.
Simple Definition: Sales is the process of systematically generating revenue with the product (solution) in the chosen market segment in the race for market leadership. Sales is the tactical process of revenue generation when you have proven and documented product/market fit and defined the most effective way to support our customers’ buying journey. To achieve market leadership you will have to continuously scale and optimize your sales operation, which means hiring more and more salespeople (or recruiting more and more channel partners). You can define compensation plans with realistic objectives and quotas and you can benchmark salespeople against each other, optimizing the sales process.
Simple Definition: Business Development will work very closely with product management on the competitive positioning and the feature set as well as with marketing for developing the most productive definition of the value proposition, the identification of the most effective communication channels and the most cost/effective lead generation process. This match-making process is based on continuous and close interaction with potential customers. The objective is not revenue generation, but finding the right product-market fit.
When you move into a new market (which may also be a new geographic market) where the environment is different from where you are already operating, then you need to go through the business development process first before you employ sales resources.
Maybe it is a psychological thing about the word sales, Everyone has had some annoying experience within a sales context:
- the cold caller pushing you to the limits of your own courtesy
- the hunter only showing interest in closing the deal, whatever product or service they are selling
So probably this is a hidden reason why companies decided to rebrand the position of a sales manager to business development manager.
Job title aside, it is the focus of activities that makes the real difference between the two roles:
When you sell what your company can deliver today, the marketing material is available and target customers defined. Well, you are in sales.
When your focus is on defining and pursuing what, where, how, and to who your company should sell tomorrow. You are in business development.
Sales make sure your business is running in the short term, business development reassures your business will survive and/or grow in the long term.
While in sales it is all about closing product sales, business development is all about opening up new business opportunities for your company.
The Buyer’s journey: where Bus Dev stops and Sales starts
Translating this back to the buyer journey (awareness, consideration, selection):
During the Awareness stage, buyers identify their challenge or an opportunity they want to pursue. They also decide whether or not the goal or challenge should be a priority.
During the Consideration stage, buyers have clearly defined the goal or challenge and have committed to addressing it. They evaluate the different approaches or methods available to pursue the goal or solve their challenge.
In the Decision stage, buyers have already decided on a solution category. For example, they could write a pro/con list of specific offerings and then decide on the one that best meets their needs.
Business developers (should) focus on buyers in the awareness and consideration stage and interact closely with their own R&D, marketing and sales to reassure the development and commercialization of the right product.
Sales (should) focus on guiding the identified prospective buyers through the decision stage and hopefully get them to select the solution of your company.
Business Development talks Technology, Sales talks Products
In the context of our advanced material, business development is about:
- approaching the market with an exploring and learning mindset in order to capture and uncover challenges that could be tackled with the company’s technological capabilities
- creating awareness with the prospective buyers of your technology and what it could mean to them. At this stage, you typically go through testing and co-development trajectories.
- working together with R&D to develop a fitting solution to the challenge
- After initial sales is realized, interact with sales and marketing to set up the appropriate sales channels (internal sales, distributors, commercial agents, …), finetuning the marketing message to the target market(s),