Business development and sales are terms often used interchangeably, even by people who really ought to know the difference. Read on to learn the difference between business development and sales.

What is Business Development?

In a sales context, business development is the process of generating top-of-the-funnel leads, which will be passed on to a sales team to close; it is largely strategic. But business development can also refer to other, non-sales-related work, such as sourcing partnerships.

What is Sales?

Sales is the process of generating final transactions between two parties; it is primarily tactical in nature. This is where sales execution takes place.

TLDR; What Is the Difference Between Sales and Business Development?

Even though these processes can exist as a singular function within your organization chart, possibly called sales business development — or even a single employee — they are increasingly being viewed as separate functions. Business development is focused on the top-of-funnel, while sales is focused on the bottom of the funnel.

Now that you understand the fundamental difference between sales and business development and before diving into the reasons these functions are and should be separated, look at where the confusion on the topic of business development versus sales comes from. 

Why Are the Terms Used Interchangeably?

When  business development first began to separate as its function, many businesses hired “business development representatives.” But because this role is a relatively new development in the sales profession, and because business development describes other work, the terms became intermixed. As a result, most companies now refer to their business development reps as sales development reps (SDR).

Why Business Development and Sales are Separated:

Business development, or the process of generating sales leads, has become increasingly difficult. We no longer live in the Don Draper era of a salesman with a Rolodex who could generate new leads just by having a cup of coffee at the local diner.

Why is Generating Leads So Hard These Days?

So, why is it so hard to generate quality leads?

The underlying nature of business hasn’t changed; companies offer products or services and seek out potential customers who can benefit from them. That underlying structure applies to a buggy whip factory as they are to a modern Software as a Service, or SaaS, provider. So if that hasn’t changed, what has then?

Market Size

Today’s market is huge, regardless of your product or service.  With the Internet opening up the global market, hundreds or even thousands of companies offer the same or similar services simultaneously.  That’s great for your potential customers but leads to a considerable problem in simply getting them to notice you. 

After all, you can’t close a transaction with someone who isn’t aware you exist.  Generating awareness with potential buyers is a major driving factor for splitting TOF sales from BOF sales, 

Similarly, the sheer volume of choices can overwhelm interested buyers. There is simply so much information. They suffer from a type of paralysis where buyers have too many options, so they choose none. Again, splitting business development and sales allows for more appropriate discovery that matches the buyer’s stage in the purchasing journey. That means that even when a potential prospect is aware of your company’s existence, they may not know what you can offer them, so they can’t make an informed decision. (source)

Hyper-Informed Buyers

Every morning people check their phones or laptops and are almost immediately overwhelmed by an inbox full of emails, newsletters, blog posts, social media shares, and thousands more. 

Not only this, but it also means today’s buyers are more educated than ever before. Now, so much of the buying process happens before a salesperson is even contacted, further complicating the sale. Specialized business development reps attempt to interrupt this by contacting potential buyers while they are still considering solutions.

What Do We Do About These and Other Problems?

To combat these and other issues, organizations are specializing their processes for greater efficiency. The more you specialize quality lead, the more you benefit from organizational efficiencies. So what are the benefits of moving to specialized business development representatives?

  • Specialization Effect – Specialization, in general, has a beneficial effect because it’s easier for people to focus on a single thing rather than switch between different functions at different times. Because of the high-volume nature of generating top-of-funnel leads, it makes sense to have someone dedicated to this function full time.
  • Single Skillset – Business development and closing sales transactions require different skillsets. By separating out the processes, you can focus on finding people with the skillset you need rather than limiting yourself to those who possess both skill sets.
  • Specialized Tools – Once someone has a more defined role, you can give them the specialized tools they need rather than provide a tool arsenal to support multiple unrelated functions.

Which Should You Hire First?

There is no clear answer here, no one solution fits every situation, but generally, sales personnel are hired before business development representatives. After all, part of the difference between sales and business development is that they are the ones who directly close revenue. 

Meanwhile, business development is a very specialized skill set that requires special management skills. This can be an obstacle for well-positioned companies to benefit from business development but are not yet in a position to implement an internal team. This is why many organizations are turning to outsourced agencies to handle their business development needs.

Should I consider outoutsourcing business development?

Outsourcing your business development needs can make a lot of sense for companies in several ways. 

Most of the typical benefits of outsourcing apply here, just as they do in any other industry. Hiring an outsourcing firm is a much faster way to generate results than implementing an internal team. It also generally costs less, as you are not responsible for the management overhead of the team you have hired. 

Finally, it takes advantage that business development may well be their core competency even though it may not be your organization’s.

For more information about business development, sales, and outsourcing your appointment setting tasks, contact SalesRoads today.

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