What Is a Business Development Strategy? (Benefits and Tips)
By Indeed Editorial Team
Updated 4 December 2022
Published 7 May 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Many organisations create business strategies involving plans, such as increasing sales, attracting new customers and improving customer satisfaction. Business development strategies can guide a company's departments to perform tasks to increase the company's growth. Learning about development strategies can help you create effective plans for a company's growth. In this article, we examine the definition of business development strategy, explore why it's beneficial, highlight common components, explain how to create one and provide a few tips that can help when creating one for a business.
What is a business development strategy?
A business development strategy is a plan that the company creates to promote business growth. The strategy might focus on ways the business can gain new customers while retaining their existing ones, which may help increase sales. Companies often assign the task of creating a business development strategy to the marketing or sales teams. Once the department makes a strategy, the rest of the company can ensure the plan is successful.
Benefits of creating a strategy for business development
Here are some benefits of creating a business strategy:
Investors interested in the business may request its strategic plan for growth before they decide to invest. The strategy may help the potential investors understand how long it might take to generate profit and whether the business's products and services are worth the investment. For example, investors could assess the development strategy and compare it to other businesses in the industry. If the company's strategy is more tactical and effective than other businesses, investors may be more willing to invest.
Improves resource management
Development strategies can allow companies to prioritise resources for relevant tasks. This may be a valuable advantage for small businesses that might not have access to a marketing budget to ensure a wide audience sees their ads. For instance, a health and fitness company could use its strategy to market its products solely to people who have a clear interest in fitness gear. The business may limit its marketing tools to businesses such as gyms, allowing the company to save funds.
Increases customer numbers
Developing a business development strategy may involve creating marketing plans. Different marketing strategies can help expose the business to people interested in the company's products. The company can also target specific age groups or genders by monitoring user activity to send relevant ads. The company may also keep existing customers through loyalty programmes and special discounts.
Components of a business development strategy
The components of a business development strategy may vary depending on the organisation's goals. Here are components that are common in many businesses:
Establishing good business relationships with customers, potential investors and vendors through networking is helpful. Networking can be effective during business or community events where you may interact with companies with similar interests and establish a professional relationship with them. Social media may also be an excellent tool for finding new clients and investors.
Referrals occur when an existing customer recommends the business and its products to another client. Referrals can be helpful to business development strategies since they're mostly free. You can also use strategies that encourage customers to promote the business to others. For instance, you may implement a referral program that offers discounts, rewards and other incentives to the existing customer and the person they refer. This could eventually help increase sales and boost customer satisfaction.
This type of marketing involves creating original video or audio material to showcase the company's products and positive reviews from customers. Content marketing may include using material such as magazines, newspaper articles and brochures. Recently, content marketing has grown to include digital forms, such as blogs, videos, podcasts and social media content. Content marketing can also involve creating website posts that answer common user questions or guide customers to perform specific tasks. This aspect of the development strategy can help the business reach new audiences and promote the brand's image.
Advertisements are forms of paid promotions that may help increase customer awareness about the company's products. The business may decide to use different media avenues to present this information to as many people as possible. Helpful advertisements avenues include print media, radio or television stations. The business may also use digital methods, such as pop-up ads on social media platforms and websites.
Businesses may use outreach programmes to contact customers directly and share information on products. Outreach programmes may involve using email campaigns, phone calls and direct emails. The company may also apply these programmes to promote customer retention by contacting long-time users who haven't purchased products for an extended period. Such a programme can help the company discover any issues that have prevented clients from purchasing. The business can also gather data on client preferences, which eventually helps the company improve their service delivery and produce better products and services.
How to create a business development strategy
Here are four steps you can follow to create a business development strategy:
1. Determine the target audience
The first step is to establish who the company is planning to attract with the business strategy. You can determine the target audience by studying information on existing customers and consulting marketing companies. Customer information, such as age, gender or income level, can also be helpful.
Once you determine the target audience, you can conduct a study to understand their purchasing trends and expectations better. You may use tools, such as surveys, customer reviews and focus groups, to collect such data. It may also be helpful to conduct a study on industry competitors to better understand how they fulfil customer expectations. Assessing the target audience can help the company design relevant products and services that consumers are more likely to purchase. The target audience may also guide the marketing team's strategies.
2. Set SMART goals
SMART stands for specific, measurable, attainable, relevant and time-bound. SMART goals can be a helpful tool since they're applicable in almost every situation. A SMART goal includes all the key details and allows users to measure their progress. Attainability means that the company can achieve the goal with its resources, and relevance ensures the goal is helpful at a specific time. For goals to be effective, adding a timeline may also be important.
3. List specific actions
The next step is to establish specific tactics to help the business achieve each goal. The action plan may include details of each employee's specific department and responsibilities. An action plan can also help the company assess the progress of different departments. For instance, the plan might contain a list of tasks with deadlines. Then, every few weeks, the company can assess how many tasks each employee has completed.
4. Determine methods of tracking progress
The last step involves establishing the tools you can use to measure the effectiveness of the business development strategy. Having such tools can help the company determine when to expect results and decide whether the strategy requires modification. The measurements that the company chooses may depend on the business and goals of the development strategy.
For instance, if the company handles marketing, it might use measurements, such as customer lifetime value (CLV) and customer retention rate. It may also be important to share the progress of the business development strategy with team members. This can ensure they remain motivated to work towards business objectives.
Tips for implementing a business development strategy
Here are a few tips that can help you apply a business development strategy:
Find partnerships: Partnerships with powerful brands can be a quick way to build credibility among other businesses. It's important to find a partner that aligns with the company's values and helps the business achieve its goals.
Measure performance: Use key performance indicators (KPIs) that help analyse the success of a business development strategy. This can help the business identify the impactful parts of the strategy and those that require improvement.
Request feedback: Regular customer feedback is important to help the company create strategies in line with customer preferences. The business may use surveys, review platforms or personalised emails to gather information on customer service or other processes to gauge customer satisfaction.
Procure technology tools: There are many tools and devices that can help track the company's progress and improve its online presence. Tools such as websites and social media channels can be critical in attracting more customers and remaining relevant.
Explore more articles
- What Is an MNC? (Definition, Types and Pros and Cons)
- What is Operation Costing? (With Example of Calculation)
- What Is After-Sales Service? (With Benefits and Examples)
- How to Use Conditional Formatting in Excel (Plus Importance)
- Working Capital Formula (Definition, Components and How to)
- 7 Strategy Risk Examples (Plus Tips for Minimising Them)
- What Are the 10 Main Change Management Principles?
- What Does a Technical Lead Do? (With Specific Requirements)
- What Is Software Development? Definition, Process and Types
- 60 Quotes on Opportunities to Inspire and Motivate You
- How to Create an Implementation Plan (Plus Definition)
- What Is Research Methodology and Why Is It Important?