The Difference Between Business Development And Sales

Business Jun 05, 2017 0 158
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By CJ Cornell on Quora.com

Here are the definitions / semantics. Note that, while inside smaller companies the same person takes on multiple roles at different times (such a VP or CEO) - it is still important to know the difference:

Sales = Transactions. Sales is responsible for selling a specific product or service, with a clear price and value, to an identifiable individual customer. Sales is the activity that happens once the specific customer is identified.

Marketing: Identifies the needs and types of customers so it can attract customers. Marketing devises the best way to get the products into the hands of the customers. Marketing often plays a big role in product development in gathering or validating the feature/benefits required by customers (or by the overall market).

Strategic marketing focuses on customers as groups - to better understand how to differentiate the product, and how to more effectively target and sell the products to each group.

Tactical marketing focuses on getting customers closer to the sales transaction. Marketing-promotions, trial offers etc are usually in this category. This is about attracting customers.

For an ecommerce business, marketing goes all the way to the transaction, and "sales" is automated. In other businesses, marketing brings customers to "the door" while sales tries to convert the customer's interest or presence into a transaction.

Business Development: Identifies and executes NEW areas of business - new markets, new distribution channels, new products - typically through the use of partnerships between another company and an internal department at your company.

The focus of "bizdev" is on new, atypical, interaction or collaboration with external partners who are *not* customers or sales prospects. These potential partners may one day be potential customers, maybe, but they are not current sales prospects. Once the business is no longer new, and becomes a repeatable kind of business, then the role transitions to another part of the company (sales, marketing, product development, engineering). .

For Business Development, the goal is not a sales transaction: Business Development is not formally empowered to sell a product directly to a customer or customers - otherwise they would be competing with the Sales team.

Business Development should never be dealing with the sale of existing products to existing (identifiable) customers, no matter how large the revenue opportunity - only sales does that. Nor should Bizdev be setting up distribution channels - this is a marketing function.

Example

For instance, when Amazon decided to add online movies to it's product offerings: Initially this was a bizdev role because of a brand new area of business - with a new business model, new distribution, etc. that required an external partner(s) working with internal Amazon departments. Bizdev would be coordinating the internal/external activity until all had the licensing terms fleshed out, pricing, marketing strategy, created a new area of the site with new kinds of distribution ... once that all happens it is standard business, and then out of the hands of bizdev and then- driven by marketing, sales, product etc.

A Sales Executive (probably not a role that should formally exist in a pure online / ecommerce company) would either focus on 'big ticket' sales that require the longest 1-1/face to face selling cycle, and/or manages other sales personnel.

For instance, at a car dealership: The Sales Executive might manage the floor sales personnel (deciding commissions policy etc), while also being the person to negotiate a deal with a large business to buy 50 vehicles for use as company cars.

CONFUSION

Be wary of folks who take the stance of defining any of these terms loosely, as they please.

Quotas and Commissions

If a job posting or job description for a Business Development Manager talks about a "Quota" or Commission - then it is a Sales Position. While Bizdev professionals often have significant performance-based or results-based goals, and compensation - it is never in terms of minimum number of 'transactions'. Business Development is process oriented: The process and outcomes change depending on the market, the competition and partners. The nature of the conversations (and outcomes) change depending on who the partner is.

The Bizdev Role vs Sales

Sales is transaction oriented. The terms and nature of the product, or of the customers don't change that much - even with custom products or big-ticket sales. A sales executive simply can't say "we sell compact cars - but if you want a truck or a van, we certainly can build and sell you one". Business Development can't say that either. Bizdev might say: "our company strategy has been to eventually get into the truck market, and we need to find partners who can augment our car building experience with truck building - so one day Sales can sell a lot of trucks".


  • Marketing - attracts customers to the front door of the building.

  • Sales - convinces the customer to go from the door to the cash register.

  • Business Development - works to create new buildings.



Sure it's perfectly acceptable and common for companies to combine roles - but a Business Development professional from one company doesn't want to find himself in discussions with another "Bizdev Exec" only to find out that it's really a sales-call.

https://www.quora.com/What-is-the-difference-between-business-development-and-sales


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