Sales vs. Business Development: Key Differences
Sales and business development are integral functions within a company, both dedicated to increasing revenue. But it’s important to recognize that they serve distinct purposes and contribute to a company’s success in different ways and over varying timelines. This is especially true because the titles for these functions aren’t always used consistently between organizations.
How can sales professionals distinguish whether a potential sales or business development role aligns with their experience and expectations? In this comprehensive guide, we will explore the differences between sales and business development roles in depth.
- Key Differences Between Sales and Business Development
- Sometimes Business Development Isn’t Really “Sales” at All
- Where Does “Sales Development” Fit In?
- How Sales and Business Development Work Together
- Benefits of Separating Sales and Business Development Functions
Key Differences Between Sales and Business Development
Sales development and business development might seem like two sides of the same coin. But they function as separate yet complementary entities within an organization. While both aim to put the company’s products or services into the hands of customers, they follow different strategies and approaches.
Is the Focus on the Present or the Future?
One aspect that distinguishes these functions is whether the focus is revenue generation in the present or in the future.
A traditional sales focus will be the immediate needs of customers and what the company can deliver promptly. It’s all about the here and now. The emphasis is on what the customer or client can buy immediately and how the company can deliver it now.
In contrast, business development has a more forward-looking approach. These roles typically involve cultivating relationships to expand the company’s customer base. Instead of focusing on what customers can buy today, business development professionals are concerned with what they might want to buy tomorrow.
Let’s consider an example with a SaaS company that makes marketing software. The sales team for this company would be responsible for responding to inquiries from a marketing team hoping to adopt the software. But a business development team might work on a multi-year contract to customize and implement the software for all the marketing teams within a business.
Alternatively, this difference in the roles could be considered tactical versus strategic. Sales roles operate at a tactical level, with a focus on immediate sales and lead generation. Business development, on the other hand, operates at a more strategic level with a concentration on long-term growth and relationship-building.
Are Interactions More Transactional or Relational?
Another distinction will be the nature of interactions with prospects and customers.
Sales interactions are transactional. As the function suggests, it’s about the sale of goods or services between a seller and a buyer. The focus is on closing deals where both parties benefit. If the transaction goes well, the result is a seller who makes a profit and a customer who obtains a product that meets their needs.
Business development interactions should be more relational. The primary goal is to identify, cultivate, and nurture relationships that open up new opportunities in the future. Successful business development results in robust, mutually beneficial relationships that can lead to strategic partnerships and long-term growth that extends beyond individual transactions.
Where Is the Customer in the Buying Journey?
Where a customer is in the buying journey will also be different for sales and business development.
Customers interacting with the sales team can be at various stages in the buying journey: awareness, consideration, or decision-making. In the awareness stage, customers are identifying a problem and looking for a solution. Going back to our previous example, a team lead who needs a new software platform and is researching available options.
In the consideration stage, customers have identified several potential solutions and are evaluating their options. They might be comparing the different software platforms available to determine which one suits their needs best.
Finally, in the decision-making stage, customers have made their choice and are ready to make a purchase.
The business development team’s role, however, comes into play primarily at the awareness stage. They will work on new products and solutions to offer to customers who are in the early stages of seeking solutions. While this might seem like a form of sales, the primary goal is not immediate transactions but rather working with the research and development team to develop new solutions that customers can evaluate as they explore their options.
Sometimes Business Development Isn’t Really “Sales” at All
In some cases, the business development function is more focused on partnerships than on direct sales. In these scenarios this role is tasked with sourcing and managing the partnerships that enable the product or service to deliver more value.
That might mean value-added resellers, agencies or installers. In a platform business, it might refer to additional partnerships that offer integrated products that make the platform itself more valuable to customers.
Where Does “Sales Development” Fit In?
Sales development represents a specialized department within sales teams, concentrating on identifying, engaging with, and bringing qualified leads into the sales pipeline. Sales development representatives use various methods, including outbound calls, email campaigns, and social media outreach, to achieve this objective. They may also maintain relationships with current customers.
The point at which a sales development representative (SDR) passes a lead to a salesperson will vary from company to company. It depends on how the sales team defines what makes a lead “sales qualified.” There are several different frameworks for sales qualification, including BANT (budget, authority, need, timeline), ANUM (authority, need, urgency, money), and GPCT, among others.
But regardless of the framework used, SDRs should become adept at uncovering essential information:
- Whether they’re talking to a decision-maker: Identifying decision-makers early is crucial to avoid wasting time on leads with no purchasing power.
- Whether the company could use your product: If your product doesn’t address the specific needs of the lead’s industry, it’s not a good fit.
- Whether your product can solve the lead’s problems: Every company has different needs, and it’s crucial to understand where your product can provide a solution.
Many organizations require SDRs to go a step further in qualification. In addition to the basics, SDRs may need to determine:
- Whether the lead needs a solution in the near future: Identifying the timing of a lead’s need is essential to avoid prematurely passing the lead to the sales team.
- The budget the lead is working with: Understanding the budget helps align the lead’s expectations with what the company can offer.
SDRs should spend the majority of their time asking questions and listening to the prospect throughout the qualification process. However, they should also educate leads about the solutions the company offers, ensuring that any potential misalignment is identified early.
How Sales and Business Development Work Together
While sales and business development represent different functions, it’s easy to see how important it is for both strategies to work in lockstep.
Sales is all about closing deals. After receiving a qualified lead, sales representatives take the deals across the finish line. They might perform some additional qualification in certain circumstances, but their primary objective is to close deals. Sales reps are also responsible for demonstrating the product, handling prospect objections, and drafting contracts.
Business development, on the other hand, ensures that the company is positioned to approach more accessible and accommodating prospects.
Exemplary selling can be a challenge without dedicated business development, and business development’s requisite relationship-building rests on a company having a solid solution and a reputation for effectively accommodating a given market.
Benefits of Separating Sales and Business Development Functions
Companies that separate between sales and business development functions can offer several advantages to their sales professionals. These benefits include:
Reducing Difficulty in Reaching Buyers
Reaching today’s buyers often requires more effort and a more nuanced approach. Buyers want to feel understood before connecting with a sales organization. Having a dedicated business development infrastructure can help meet these expectations.
Efficiency through Specialization
Closing deals is no easy feat, and it doesn’t make sense to have top sales reps spend time researching companies and hunting for leads if they’re most skilled at selling. Specialization allows each team to focus all its energy on one task instead of dividing their time between two different and time-consuming objectives.
Sales and business development are two crucial functions that share the ultimate goal of boosting sales and revenue but serve different roles within an organization. Understanding the nuances of these functions is vital for effective customer acquisition and long-term business growth — and determining which role is right for you.
A position on the sales development team is often the entry-level step for an employee entering the company. As their knowledge of the products grows and they gain a greater understanding of their industry, they might move onto the sales team and then into business development to help bring new tools to the market.
Lastly, some companies will use sales and business development titles interchangeably. In some verticals, people may prefer the business development title because it sounds less “salesy.” Always check the fine print, and don’t assume the functions of the role just from the title.