Business development is an interesting area of sales. For many businesses, it is a euphemism for sales person – yet the role, when performed correctly, is so much more than simply being a sales rep.
To my belief, Forbes hit the nail on the head with defining business development:
Business development is the creation of long-term value for an organization from customers, markets, and relationships.
Business development is much more complex than many sales people and businesses think. As a result, they often end up with mediocre outcomes from their BD staff because they define the role with too narrow a scope. As a result, they hire a sales rep and not a business development professional
What are the two main areas where business development (BD) is focused:
Here it is easiest to think of BD in this space as sales. In essence, this is the focusing of business development on directly or indirectly approaching ‘new to business’ work (NTB). This is focus outside of the business.
There are 3 main BD activities that will be undertaken here:
This is the identification and engagement, on a one to one basis, with prospects considered to be ideal to the business as future clients. This is principals about the utilisation of cold calls, warm leads and similar methods to directly approach a prospect and develop a relationship with the view of scoping whether future work is of mutual benefit
This is the activity of approaching intermediaries and trusted advisors that you would consider to be engaged with, or similarly focused on, you ideal future clients. Often these intermediaries will be tangential to your business (eg in business circles – accountants, solicitors and bankers are often pointed at the same clients). This activity is about developing mutually beneficial relationships to exchange market intel and, ideally, referrals as they arise (whether pieces of work or introductions to your ideal future clients).
BD activity in this space is aimed at ensuring your company’s brand/profile is positioned in the spheres where it can reach your ideal future groups. For example, this can be about participating in industry trade groups, chambers of commerce, professional special interest groups and similar.
Often there is an overlap between Indirect and Brand orientated activity. For example, trade industry groups are often populated by potential or current intermediaries, so relationships can be developed or further here as well as positioning your brand.
With Branding activity – you need to be careful to analyse the value of attendance and not just ‘turn up’ with the expectation of profile or business. You do need to participate. You also need to consider, while the event/opportunity may seem small, you can be noticed more by your absence (ie perceived non-support) than presence.
Here, BD activity is focused within the business. It is working with internal business partners and colleagues to grow sales acumen and results. Again, there are 3 main ways to view this:
This is working with existing team members/staff to coach them to sell. In essence, provide them with the tools to undertake their own BD. Over time, this provides exponential results in comparison to a single BD manager. If everyone (ideally) or many of your clients focused staff are focused on BD – the business can cover more ground over a shorter period of time. This works especially well where the staff are in specialised sales roles (eg relationship managers/account managers) where the focus is more on managing relationships (minding) rather than finding new business (finding).
Slightly different to coaching – supporting is those within the business to sell more efficiently. It is best considered a sales consultant/specialist rather than coach. For example, this can be around how pitches are composed and delivered, or supporting with sales material/collateral to be more efficient. Or the provision of market intel, leads, lists etc.
This is a crucial aspect of business development and sits across many of external BD activities as well. Referrals therefore breaks in to two specific BD activities:
External This is working with account/relationship manager (or what roles hold existing client relationships) to ensure those clients are experiencing the best service possible to drive referral business from these customers. Based on the premise that you enjoy doing business with the clients you have, they should be an ideal source for your ideal future client
Internal This is about identifying and sourcing your ideal future clients through working with your internal business partners (ie other parts of your own business). This has applications in divisionalised businesses where activity is occurring in silos. For example – an accounting business ensuring that clients that they are giving consultancy advice to are also socialised with Tax or Audit colleagues to maximise the opportunity each client (new or existing) presents the business.
Most businesses view BD as the first 2 of the external activities (Direct and Indirect) and neglect the balance of activities. As a result, they often hire sales people, rather than business development professionals.
When a business considers it’s BD activity – or the hiring of a BD manager – all of these activities should be factored in to the role scope to ensure the role and, more importantly, outcomes are sustainable and in the business’ best interest.
Here’s an example of how a business development manager considers solving problems for their clients:
The key distinction is thus. A sales rep would exit this model if they determine the prospect/client has a problem that what the rep sells can’t solve. There is no sell to be made, so no value in continuing.
A BD professional will find someone to solve that problem. They will create an ecosystem of like minded professionals who can add value to clients – solve their problems and realise their opportunities. They see that, in doing this, whilst they haven’t sold anything in terms of revenue, they have paved the way to a stronger, advice and solution based relationship with their prospect/client.
Business development is much more than ‘selling’. It is about brand brokership, marketing, intermediary relationship development, internal capability growth and support and many other factors. It is best to think of it that a BDM’s role is to manage the development of their business‘ sales strategy and execution – not simply to sell product. They should be your internal and external sales and value champion.