This is part one of our business development educational series.
“So you’re in sales?” is usually the response I get when I tell someone that I work in business development.
While that assumption isn’t necessarily wrong, it’s not entirely correct either.
As I’ve began to frequent more networking events, I have learned that not many people outside of tech have any idea what I do when I go to work every day.
Business development is a term that often can be quite unclear and change in meaning depending on who you’re talking to. Almost everyone is familiar with the basic functions of different teams across an organization –- sales, engineering, finance, etc. However, when it comes to “biz dev,” there is a level of ambiguity surrounding the true meaning of the term and what responsibilities individuals with the title have.
That being said, in this article we’ll take a look at what business development is and how it’s different than sales.
What is business development?
So for starters, let's define the term.
Business development definition
Business development is the creation of long-term value for an organization from customers, markets, and relationships.
Although this formal definition is straightforward, it lacks the ability to paint a clear picture of what function a business development team serves within an organization.
What does a business development representative do?
There is one core responsibility of business development: growing your business. The strategies to operationalize and accomplish this goal will vary greatly across industries, but the idea is generally the same for all companies.
Business development professionals need to stay knowledgeable about the current market in order to effectively target opportunities for growth. This means having expert knowledge of your target audience and engaging with (yes, this means cold-calling) prospects in order to generate new business.
Every business needs to acquire new customers to grow, but not every potential customer is going to be the right fit for your business. Evaluating whether or not a prospect is qualified to buy what your business is selling is essential to business development.
Day to day, these prospecting activities are carried out by teams of sales or business development representatives (SDR or BDR for short).
BDRs are responsible for prospecting and qualifying leads before handing them off to the sales team to nurture the relationship and close the deal. This process is crucial in keeping the company’s revenue engine running and creating long-term value.
How business development representatives qualify leads
Every business has a target audience that they wish to reach – in other words, they have an ideal prospect they want to sell to. Often, this is based on what your existing customer base looks like and is defined using a customer profile.
One of the most commonly used qualification frameworks that exists today is called BANT, which stands for:
- Budget: Does the prospect have available resources to invest?
- Authority: Is this prospect the ultimate decision maker?
- Needs: What are the biggest problems that this prospect is looking to solve with my product?
- Timeline: How soon are they looking to buy?
It’s necessary for business development reps to become subject matter experts on the set criteria they are given for qualifying prospects. This ensures that every sales opportunity they set up has a higher probability of closing and will move down the funnel more quickly.
Sales vs. business development
Although both sales and business development aim to grow new business, the two roles differ greatly and serve distinct purposes.
Earlier in this article we learned that business development is essential to the sale process. The BDR team is responsible for pushing qualified leads further down the sales funnel, but they do not close deals themselves.
That’s where sales comes in.
The primary function of the sales team is to generate revenue. Sales reps are responsible for demonstrating the product, making negotiations, and eventually closing the deal. Converting prospects into customers is much easier to accomplish when sales and business development work together to streamline the sales process.
Separating these two roles within a company allows each team to specialize in their specific function and help grow the business more efficiently.
Both of these roles require a similar set of skills — this allows for career development opportunities for BDRs who want to move into a closing role down the line. The relationship-building skills learned in the business development position are easily transferable and build a foundation for the skills necessary to succeed in sales, marketing, or even customer success.
Many business development teams operate as a subset of the sales department and are held to similar metrics. Next, we’ll look at how to measure success for business development.
Measuring the impact of business development efforts
Sales metrics for a business development team are going to vary based on what a company’s sales cycle looks like. Since the primary function of the role is to generate new opportunities to sell, one of the easiest ways to quantify this data is by looking at BDR-influenced sales pipeline, or the number of potential deals created as a result of business development efforts.
Many BDR teams hold quotas that align with the company’s overall revenue goals. In order to achieve revenue goals (that rest on the shoulders of the sales team), business development has to be consistently generating healthy pipeline.
Although metrics vary by company, common ways to track BDR activity are through prospecting activities (cold calls and outbound emails), number of appointments booked, and amount of sales pipeline generated. All of this data is normally stored and tracked using CRM software.
Where does marketing fit in?
While it may not seem like there’s much alignment between marketing and business development, it’s important that both teams are in sync and working together in order to achieve the common goal: growing the business.
Marketing’s main responsibility is to promote the brand and establish market presence. This is accomplished through various communication strategies (content marketing, advertising, public relations, etc.) and measured in a variety of different ways. The key marketing metric that ties in business development is lead generation.
The BDR team relies on marketing to generate high-quality inbound leads, and marketing expects business development to nurture those leads and convert them into sales opportunities. Strategic alignment between both teams is key to fueling long-term sales pipeline and helping the business grow.
There isn’t a one-size-fits-all definition of business development. However, knowing the basics is the first step in understanding what exactly these “biz dev” people do and how it all fits within the big picture of a growing organization.