Business development plays an important role in the success of a company. Business development professionals evaluate the company's performance and identify room for improvement by establishing and maintaining rapport and partnership with customers and other allies. Comprehending the role and necessary skills in business development can assist you in deciding whether the department is best suited to your skills. In this article, we outline what is business development, what business development professionals do, what skills are required to perform well in this role and how does it differ from sales.
What is business development?
Business development involves creating long-term value through the identification of potential customers for a company's products or services. This department is in charge of sourcing for the best match between a product and a buyer. Successful business development can impact many departments in a company ranging from sales, marketing, manufacturing, human resources, finance, product development to vendor management. When a company enters a new market, the first task is to identify the most interesting leads in that market. The business development team is in charge of lead generation.
A company that is looking for more leads or wants to expand into new niche markets can hire more business development professionals to look for potential sales opportunities. Business development professionals typically do the following:
- Research potential leads
- Match products to niche markets
- Assess competitive positioning
- Participate in trade associations to gain a better understanding of the market
- Attend trade exhibitions to network with prospective leads
- Establish and build strategic relationships to yield referrals
- Generate prospects through cold calling, cold emails or social selling
The business development process
Together with the marketing and sales team, business development professionals can generate leads that can increase sales and establish customer loyalty. The following steps are frequently followed in the business development, marketing and sales processes:
1. Determine the best positioning of products and services
The business development team collaborates with the marketing department to determine the best product and service positioning. These professionals work closely with one another to analyse the industry and identify prime placement within it. The goal is to derive who the target audience is, what they need and how to place the product or service to uniquely meet the audience's demands. You can achieve optimal positioning by changing and enhancing pricing, quality, convenience and customer service.
2. Identify the value proposition
Consequently, the sales and business development departments work together to select the optimal value proposition for the product or service. A value proposition refers to the primary reason why a customer should buy your product. It explains how your product can address persistent customer problems, offer a specific set of benefits and highlight your product's advantages over that of your competitor's. Create a value proposition that is relevant to your audience and provide quantifiable value to them.
3. Choose the best marketing channels
The marketing team is mainly in charge of choosing the most suitable marketing channels to reach the target audience. They collaborate with the business development team to determine the best ways to contact and connect with potential leads. Both teams work together to achieve the best marketing strategy by having clear and measurable marketing goals, gathering and analysing data, looking at current best practices, knowing the audience and determining the marketing budget. Sales representatives may provide feedback on the platforms that have been the most effective in connecting them with customers.
4. Define the lead generation process
Lead generation involves the initiation of customer interest or inquiry into a company's product or service. The business development and marketing departments outline the lead generation process, from the first point of contact to the final sale. Business development professionals contribute their knowledge gained from industry research and networking to this process. You can generate leads for a variety of purposes, including list building, e-newsletter list acquisition and sales leads.
5. Connect with customers
With customer connection, the marketing team aims to build personal relationships beyond the initial transaction. It requires good customer service and thorough communication with the customers. The marketing team facilitates customer connections through its campaigns on television or radio, social media, online advertisements, email newsletters or search engine optimisation. The marketing department also manages visibility, keeps the company's image up-to-date and provides educational and promotional materials to help customers understand the company's products and services. The business development team, however, reaches out to customers through networking, cold calling and cold emailing. Both activities can yield a list of qualified leads.
6. Conduct follow-up with leads
After the business development and marketing team identify leads, sales representatives commence their work. Sales representatives route the leads generated by marketing campaigns or business development outreach through the sales funnel. A sales funnel typically leads prospective clients who are aware of the product or service to the point where they become paying customers. The sales team depends on the marketing professionals to emphasise the value proposition to prospective customers, paving the groundwork for a successful transaction.
Throughout the rest of the sales process, sales representatives directly deal with customers to score a transaction. They empathise with customers' needs, pitch products, host demonstrations, offer packages, follow up, negotiate pricing, create a sense of urgency and close the sale. Sales representatives also keep in touch with customers, foster brand loyalty and strive to convert new customers into loyal repeat buyers. Throughout the whole process, the business development team also needs to be aware of the strategy and leads that they have generated are working and analyse what improvements they can make in the future.
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Skills and attributes for business development jobs
Before applying for jobs, be sure that you're applying for the correct role: business development representative or sales development representative. These are the skills that are essential for a business development position:
- Excellent communication skills, both written and verbal
- Public speaking skills
- Analytical skills
- Creative skills
- Robust interpersonal skills
- Research, strategy and critical thinking skills
- Negotiation skills
- Willingness to travel
- Active listening skills
- Attention to detail
- Product knowledge
- Organisation skills and the ability to multitask in a fast-paced environment
- Project management skills
- Data analysis
A sample job posting may look like this:
Seeking a high-energy and driven business development representative to strategically identify new leads and develop revenue opportunities. You'll be responsible for networking, researching the industry and identifying untapped niche areas for potential customers. You'll work with the marketing team to create campaigns targeting potential leads in a fast-paced and innovative work environment. Following lead identification, you'll pass qualified leads onto the sales team, partnering with sales representatives to figure out the best way to guide these leads through the sales funnel. You'll spend roughly 20% of your time travelling to trade exhibitions and industry events to network with potential buyers.
Business development vs. sales
Business development entails the process of finding a match between a product and a market segment. Sales, on the other hand, is the process of systematically generating revenue from the product sold in the chosen market segment. The focus of the activities makes the real difference between the two functions:
- You're in business development if your primary goal is to define and pursue what, where, how and to whom your company should sell in the near future.
- You're in the sales department if you sell what is already available today, the marketing materials are complete and the target customers have been identified.
Although business development and sales are two distinct functions and frequently two different departments, professionals in both areas are interdependent upon one another. To allow you to fully comprehend the difference between the two, outlined below is the explanation of what sales is and what sales professionals do.
What is sales?
Sales involves the process of selling a company's products or services to generate revenue. Sales representatives are the key contact points between a company and its customers. Sales occur after business development activities. Once the business development team has identified promising leads, sales representatives can begin guiding customers through the sales funnel, converting them from prospective leads to buyers.
A company with a large number of untapped leads requires more sales professionals to follow up with them and form relationships with them. The duties of sales representatives typically include the following:
- Connect with leads to identify their needs and suggest suitable products or services
- Conduct follow-up for leads from marketing campaigns
- Discuss objections to products or services
- Give sales presentations and demonstrate products
- Monitor competition by gathering current marketplace information on pricing, products and merchandising techniques
- Retain professional and technical knowledge by attending educational workshops and participate in professional associations
- Draft contracts
- Close sales
One person may handle and undertake the duties for both roles in a small company, but a growing company typically requires both business development and sales representatives to succeed. Comprehending the distinction between sales and business development can assist you in deciding which department is best suited to your skills.