Sales, Marketing or Business Development
What’s it to be? As a startup business owner, you’ll already be wearing multiple hats. Certainly, you need to keep several plates spinning whilst also trying to identify and secure growth opportunities. Equally, there are misconceptions about the sales, marketing and business development functions. For instance, if you asked 10 different people to explain each of these functions, you’d probably receive 10 different answers. So, what is business development and is it interchangeable with sales and marketing?
Marketing is a business process, which supports sales by building a brand. It’s used to promote products and services, using a variety of different marketing channels. Most importantly, successful marketing focuses on target audiences and their demographics. In doing so, marketing generates awareness and interest in a product or service. As a function, it utilises a wide range of channels, including digital and printed media. For example, social media, television, radio, newspapers, banners, leaflets and more.
The sales function is focused on the short-term. It’s about selling a product or service and generating sales revenue. In answering the question; “what is business development?”, ultimately, it’s also about generating sales. However, in contrast to a pure sales function, the difference is that business development is a long-term strategy. Most importantly, business development is about identifying growth opportunities and creating long-term value.
For further reading and information, read this LinkedIn article on the differences between business development, sales and marketing.
What is business development and why is there confusion?
Whilst sales, marketing and business development each have their own role to play and value to bring to the table, they aren’t specifically interchangeable terms. This is where the confusion begins, since these 3 functions are understandably connected, and you can already see some skills overlap. Certainly, sales and business development utilise some of the same skills. For example, effective communication and negotiation skills. However, remember the answer to “what is business development?”. Business development is a long-term approach, which builds business relationships in order to create a sales pipeline. A sales pipeline is a stream of customers/clients who are at different stages in the sales process. For example, some may be in the early ‘talks’ stage, whilst others will be in the negotiation, contractual or already won stage.
Business development is also about building relationships through effective communication, rapport and trust throughout the sales pipeline. In contrast, sales is more fast paced because it’s a short-term business process. With sales, it’s much more difficult to build rapport, let alone lasting trust. This is because it’s based on minimal short-term interaction(s). This isn’t intended to criticise or refer to any industry sector or business, but sales can have a bit of a bad reputation. For instance, for using pushy and/or aggressive sales techniques and tactics. Obviously, there are several factors that can influence whether or not this is the case. For example, the type of industry, organisational behaviour and culture. In addition, the experience level of staff, together with the availability and types of training provided.
In the decades that have passed by, things have also morphed. Most importantly, with technology and digital transformation, the landscape has changed quite dramatically. Once upon a time, startup sales and marketing was limited to cold-calling, knocking on doors, distributing leaflets and other printed adverts. With radio and television advertising at a premium, most startups and small businesses are priced out of these options. Nowadays, whilst these techniques and marketing channels still exist, social and digital media has paved the way to get in front of millions of customers at your fingertips. Door to door sales aren’t quite extinct for everyone, but cold calling and scammers are certainly in abundance.
With the digital transformation, sales and marketing has become much more standardised and more of a business process. For example, with automated phone options and scripted tele-sales calls. In addition, out of the box tools and apps have made it easier and quicker to create Google Pay Per Click (PPC) and Social Media advertising campaigns. Certainly, the likes of Facebook, Instagram, Pinterest and LinkedIn have their own ways of creating social media posts and paid for advertising campaigns. Whilst some are definitely more complex and convoluted than others, they’re designed to market and sell products and services in the short-term.
Your Startup & What is Business Development?
As a startup, it’s important your business development function connects with similar businesses. Not only that, but similar businesses who share similar goals. However, be careful about which businesses you partner with. The role of business development is to sniff out these opportunities and filter the good from the bad. Then, connect the right people to facilitate the flow of the sales pipeline and convert opportunities into won deals. For instance, research potential partnerships and filter out any that don’t match your startup’s mission and values. Focus on those that do match, since these are more likely to help you move to the next level.
Most importantly, each potential client in your sales pipeline should be assigned a percentage chance of success. This assists you with sales forecasts and can help you plan resourcing. For example, by creating a weighted average of potential clients in the sales pipeline. It’s also important to record the reasons for wins and losses, together with commentary on the progress of opportunities, top performing sales channels, products and/or services.
A Business Development Primer
Business development is about building relationships. Therefore, you need to be confident and comfortable with contacting and pitching to potential clients. Most importantly, know your business inside and out, but talk in language that your potential customers (and employees) understand.
Use your network on LinkedIn, Facebook, Twitter etc. and request introductions. Remember to sniff out the good from the bad though (see above and re-read to refresh). Mind cold-emails (i.e. direct marketing) and think strategically before sending cold-emails. It’s important to track/record these as well as send timely follow up. Test out different styles and what you want to say to see what works. For example;
- Make yourself valuable, pay attention to the email
- Include a concise Subject line
- Tailor pitch (research) as well as tone to the company and person you’re targeting
- Include an email signature
- Think about fonts and formatting; no bright colours or strange fonts
- Check spelling and attention to detail
- Plan follow up emails (but write/reveal something new in follow up emails to show your value)
- Avoid attachments in your first email, since people are busy and don’t have time to read and scroll through lots of information
- Think about attachment sizes, since larger companies have firewall restrictions. Send as pdf (always for all documents you send)
For further reading, see this effective communication blog, which includes email best practice and coaching tips.
What is business Development? Pitching
Start with a high-level pitch to show what you’re selling and why someone should buy it. During a pitch, remember to hold your own in order to close a deal. In addition, use structured goals, which are measurable. Evaluate in your mind, how you think the pitch is going, check-in with your audience and ask questions.
If you get questions during a pitch; feed the responses into a revised and updated pitch presentation to foresee and mitigate questions coming up again. If you’re worried about difficult questions, remember that you can always say something like “that’s a good question and do you mind if I come back to you later”. Read this included blog on handling difficult conversations for some further reading best practice tips.
What is business Development? Negotiating & Contracting
Get smarter and understand what your potential customers care most about. For example, during the pitch presentation, find a champion who will help you win the sale. i.e. a supporter who you can see believes in your product/service. In addition, it’s important to include visuals, don’t lie, overcommit or make promises you can’t deliver.
Timing is critical and you can’t afford to be slow. This means email response times need to be quick and within 12-24 hours unless you’re playing hard to get in order to communicate a point. Equally, it’s important to know when to walk away (based on your business goals).
Most importantly, use a lawyer when necessary and applicable. For example, it’s better to have a standard contract created by a legal firm, as well as get them to assist with more complex negotiations. When it comes to contracts, it’s important to know your legal stuff and when to push back to a lawyer.
Business Development is also about Delivery & Beyond
Be ‘friends’ with business partnerships by maintaining regular touch points. This will help keep the relationships going. For example, share information that might be valuable and helpful. In addition, help solve their business problems with lessons you’ve already learnt.
It’s also important to sing from the ‘same hymn sheet’ and deliver a unified message. For instance, when talking to different audiences and/or if others within your business are also pitching/selling your product/service.
Finally, whether you’re an early stage or more established startup, contact Maximum Solutions Consulting Ltd for some business advice or coaching. Visit the Business Advisory Services London and Business Coaching London pages to learn more about available services.