Key Differences Between Sales & Business Development
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In this article, we dive deep into the often-confused world of sales and business development to uncover the key distinctions between these two important functions. From outlining their unique responsibilities and goals to exploring the benefits and risks of each, we provide a comprehensive guide for understanding the difference between sales and business development. We also give practical advice on determining whether your business needs a sales manager or a business development manager. By the end of this article, we guarantee you’ll have a crystal clear understanding of the sales vs business development debate and the ability to make informed decisions for your company.
Understand the Differences Between Sales & Business Development:
Sales and business development are two important and often intertwined aspects of any business. Both roles involve building relationships and generating revenue, but they differ in their approaches and focus.
Sales is primarily concerned with the direct selling of a product or service to a customer. According to the National Association of Sales Professionals, the average salesperson spends around 40% of their time on non-sales activities such as prospecting and administrative tasks. In order to generate revenue through direct sales, salespeople must identify potential customers, understand their needs and preferences, and persuade them to make a purchase. As sales expert Grant Cardone puts it, ‘Sales is the transfer of enthusiasm. It’s not about the product, it’s about the person selling the product and their ability to transfer their enthusiasm to the customer.’
Business development, on the other hand, is focused on long-term growth and strategic planning. It involves identifying new opportunities and developing strategies to expand the business, such as entering new markets, forming partnerships, or launching new products or services. According to a study by the Harvard Business Review, companies with a strong focus on business development are twice as likely to outperform their peers in terms of revenue growth. Business development professionals often work closely with other departments, such as marketing and research and development, to identify and pursue these opportunities. They may also be responsible for conducting market research, analyzing industry trends, and creating business plans.
While both sales and business development involve building relationships and generating revenue, they differ in their focus and approach. Sales is primarily concerned with immediate, direct sales, while business development is focused on longer-term growth and strategic planning. Both are crucial for the success of a business, and many companies have dedicated professionals for both functions.
The Benefits of Both Sales & Business Development:
Sales is important because it generates revenue and helps a business to meet its financial goals. A survey by the Sales Management Association found that top salespeople can generate up to three times the revenue of their lower-performing counterparts. Good salespeople are able to identify and pursue opportunities, build relationships with customers, and close deals effectively, which is essential for meeting financial goals and driving business success.
Business development, on the other hand, is important for the long-term growth and sustainability of a business. By identifying and pursuing new opportunities, businesses can expand their reach and increase their market share. This can help a business to stay competitive and continue to grow over time. Research from McKinsey & Company found that companies that prioritize business development are more likely to achieve above-average growth and outperform their competitors. Business development professionals also play a key role in assessing and mitigating risk, helping to ensure that a business is well-positioned to take advantage of new opportunities while minimizing potential risks. This helps to ensure the long-term stability and success of a business.
The Risks of Confusing Sales & Business Development:
While sales and business development are related, they are distinct roles that require different skills and approaches. Mixing up between the two can have negative consequences for a business.
If a salesperson is more focused on long-term growth and strategic planning, they may neglect their primary responsibility of generating revenue through direct sales. As sales expert Brian Tracy puts it, ‘The primary focus of a salesperson should always be on selling, not on long-term planning.’ This can have a negative impact on the financial health of the business.
On the other hand, if a business development professional is too focused on short-term sales targets, they may neglect the long-term growth and sustainability of the business. This can lead to a narrow focus on immediate sales, rather than building a solid foundation for long-term growth. According to research from Forrester, companies that prioritize short-term sales targets over long-term growth and sustainability tend to have lower customer loyalty and retention rates.
It is important to distinguish between sales and business development and to ensure that each role is being carried out effectively. Mixing up the two can lead to a lack of focus on either immediate sales or long-term growth, which can have negative consequences for the overall health and success of a business.
Determine Whether Your Business Needs a Sales Manager or a Business Development Manager:
According to a sales expert Zig Ziglar, ‘You don’t build a business — you build people — and then people build the business.’. By selecting the right fit for your company and ensuring that each role is being carried out effectively, you can set your business up for success. Deciding whether to hire a sales manager or a business development manager will depend on the specific needs and goals of your business.
If your primary focus is on generating revenue through direct sales, a sales manager may be the better option. A sales manager will be responsible for leading and managing a team of salespeople, setting sales targets and goals, and developing strategies to increase sales. They will also be responsible for tracking sales metrics and analyzing data to identify trends and areas for improvement. According to data from the U.S. Bureau of Labor Statistics, employment of sales managers is expected to grow 5% from 2020 to 2030, faster than the average for all occupations.
On the other hand, if your business is focused on long-term growth and expanding into new markets, a business development manager may be a better fit. A business development manager will be responsible for identifying and pursuing new opportunities, building relationships with potential partners and clients, and developing strategies to expand the business. They will also work closely with other departments, such as marketing and research and development, to assess and mitigate risk and ensure that the business is well-positioned to take advantage of new opportunities. According to business development expert Jacco van der Kooij, a business development manager should be ‘able to identify new business opportunities and create a strategic plan to pursue them.’
Conclusion
Sales and business development are two distinct functions within a business that require different skills and approaches. While both involve building relationships and generating revenue, sales is focused on immediate, direct sales, while business development is concerned with long-term growth and strategic planning. According to a study by the American Marketing Association, companies with a strong sales team are more likely to achieve consistent revenue growth and outperform their competitors. At the same time, research by the Marketing Executive Networking Group found that businesses that prioritize business development are more likely to expand their market share and achieve sustainable, long-term growth. It is important for businesses to understand the differences between these two functions and to choose the right approach for their specific goals and needs. By ensuring that each role is being carried out effectively and that there is a clear separation between sales and business development, companies can optimize their operations and achieve success.
