Business Development and Sales: an effective model

August 11, 2020
Business Development and Sales: an effective model

Business development and sales are core functions to drive business results. Learn how to create an effective working model for your teams.

After many years of experience in business development and sales leadership positions, I realized that these two functions don’t always work efficiently. Therefore I decided to share my experience with the community to shed light on the topic.

The relationship between business development and sales is definitely a hot topic and for many, it’s just the same thing. But the reality is that they are simply not and we should start looking at these two functions as complimentary. If we accept this, then we can shift the discussion on how we can actually work effectively together.

Business development and sales should work together as it is this is the only way we can aim at consistent and excellent results. But how to do it effectively?

These are some things to take into account when talking about the relationship between the two.

We live in a very dynamic world

First and foremost, it is important to mention that today we live in a world of constant changes, where organizations need to adapt continuously to be successful. Ambidestry capability with disrupting innovation and operational efficiency is imperative. This means that organizations must focus both on short-term as well as long-term value generation.

Furthermore, each organization will be shaped based on its market needs and to address its strategic intentions and should define roles based on the business needs. Organizations should create short and long-term value for its customers, employees, shareholders, and society.

When thinking about what your business development and sales teams should do, take into account all of these factors.


What should be our focus?

One main difference between business development and sales is the phase of the opportunity cycle in which they operate. Often, business development is responsible to identify and nurture opportunities.

Typically the opportunity cycle is divided in different phases as follows:

  • lead generation
  • opportunity identification and mapping
  • qualification
  • go/no go decision
  • proposal and offer development
  • negotiation
  • deal closure
  • implementation
  • delivery and opportunity closure.

By actively looking for new opportunities and building a solid pipeline, business developers generate long-term value for an organization. But how can we make sure to find as many opportunities as possible?

The first thing is to spend time mapping the market trends and understanding the external environment. This includes market trends, regulations, competitors, and so on with the goal to identify white spaces.

The next step then is to collaborate with other teams, for example, marketing, to create strategic initiatives to engage with customers early in the process. This will enable you to attract your target audience thus creating new opportunities and fill your pipeline.

Business development doesn’t stop at finding new clients. Actually, new monetization models, developing strategic alliances, and having a deep understanding and properly position your portfolio are all important aspects of our function.

It is a hunting approach.

What is an opportunity?

Many people think that new opportunities mean acquiring new customers. However, you can generate new opportunities simply by analyzing the needs of your existing customers and help them solve them.

But finding opportunities is not even as much of a big challenge as actually assessing their quality. An effective business development necessarily goes through the qualification step with the goal of understanding if that opportunity is indeed a good one.

Qualifying means gathering information that helps you assess the potential of that lead and it often includes budget identification, competitive analysis, opportunity probability, among others.

And again, this doesn’t mean that business development stops at this stage. On the contrary, we are still an important part of the process. However, what changes is the intensity at which business development or sales work in these different stages.

Based on my experience as a salesperson, deep knowledge and relationship with the customers, its industry, internal process, strategies, and territory are critical for sales representatives. Also, they should be able to act in the final phases of the opportunity cycle, driving opportunity closure, and also supporting post-sales initiatives, so proper revenue and customer satisfaction obtained by the organization.

the business development school - description of the opportunity cycle

How should we measure success?

A good metric to measure business development success is the value and amount of new opportunities created in a certain period of time. Pipeline creation should be in the size of multiple sales quotas. The target should be a pipeline multiplier of the sales quota over a specific future period of time, from a rolling perspective.

In addition, we need to measure the speed on how fast each opportunity progress in the pipeline, as they can’t just be aging in the funnel.

This means that business development is the owner of the opportunity. As such, our job is to move it until handover to the salesperson, which typically happens in the offer development phase. Again, in this case, it’s critical to have great collaboration and teamwork skills.

On the other hand, sales metrics should include the number of deals closed, the value of orders obtained, revenue and margins generated, and customer satisfaction.

Depending on the organization set up, if the salesperson is the one also to perform the business development function, he should carry most of the business development metrics, in addition to the ones for sales. Nevertheless, the sales team should also carry some metrics of business development, for example pipeline creation and velocity, and the other way around, with different weights, so collaboration can be incentivized.

You need to implement a solid governance model in order to track progress and implement improvement actions and reach agreed upon goals.

Suggested article: The Business Development guide

How should we behave ?

From an internal perspective, business development needs to act as an orchestrator and own the opportunity through initial cycles. This means we also need to align marketing, technical pre-sales solution and sales resources. In this way, we can better work toward common goals. Good qualification of the opportunity, customer engagement, budget identification, competitive analysis, increase opportunity win probability, among others.

Everyone in the team should live by the same standard.

All the functions are critical and important and have a role to perform. In most of the situations, demarcation points are not clear due to business and market dynamics, which will require proper behavior from all the stakeholders.

In many organizations, the business development person also executes the sales function and vice versa. Hence, flexibility and collaboration become even more critical skills to bring the best results.

Collaboration is much more than cooperation. Cooperation only means executing well on your scope, sharing information, and attending meetings on time.

But collaboration means sharing and driving the same organization objectives, seamlessly. When we execute well our part of the process we create bigger impacts in the whole process, making it more effective. In this sense, communication also becomes critical. It is indeed imperative for both sides to understand the challenges and needs of all the stakeholders.

In summary, proper behavior is the most critical factor. Regardless of the setup of the organization because that’s what will drive the effectiveness of the organization in generating better results. We live in a dynamic and constant change world, therefore flexibility and collaboration are must-have behaviors.

To make it easier for you to navigate business development, we created The BD School: the first platform is entirely dedicated to business development.

Our mission is to help ambitious BD pros and companies acquire the skills they need to be successful in their job.

If you’re looking for a complete course to help you advance your career, check out our Business Development Course.

And if you manage a business development team and need help making them more effective, visit our tailored business development training.

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