A common and understandable question that comes up a lot in business and startups is “what’s the difference between business development and sales?”
What People Think The Difference Is
MBAs love applying for jobs with “business development” in the title but rarely take on positions for sales. Is it simply the same job but with a far more impressive sounding title? Is it perhaps similar but with the addition of “strategic thinking” involved with “business development?”
The confusion stems from the fact that many companies use the terms interchangeably when in fact, the two are quite different. The stereotypes are in fact different and while they don’t capture the nuances of the difference, they do illustrate it quite well. Most people imagine business development to be taking a lot of meetings over coffee and drinks where you talk about how you should be working together. Many people imagine sales to be either door to door or over the phone high pressure selling.
While these images help explain what most business development and sales people spend their time doing, it doesn’t quite explain how the end results are different since in the end the client or customer is choosing to work with you in either case.
What The Difference Is
The difference is simple really: in business development, you’re convincing people to make a decision they don’t have to make while in sales, you’re convincing people to make a decision they have to make.
Business development is convincing companies to partner with your company or to do something they don’t have to do but that would likely be mutually beneficial. Examples would be them distributing/selling your product, promoting you, or referring customers to you (or vice versa). In effect, all these benefits are nice to have but are not core to the existing strategy of the target partner. All of these could in fact be a gigantic waste of time and resources. As a business development professional, you’re supposed to convince people to ignore the downsides and focus on the upsides of partnership while also adding urgency for the person to do it now since the truth is they don’t ever have to do this. Business development can create enormous leverage in value for a business by generating whole new channels for reaching customers rather than just optimizing a single existing channel.
Often times, business development professionals only deal with other business development professionals or senior executives who handle conversations with other companies.
In contrast, sales people normally are selling to the end users who need your product to do their job or a procurement officer in charge of buying certain things that people in the company absolutely need to have to do their job. In these cases, the decision maker typically has a lot of choices. So the job of the sales person is to convince the decision maker that one product is better than another. There’s typically a timeline self-imposed due to the urgency of upgrading or getting a hold of a product to help with core business operations. The value of sales beyond generating revenue is talking to the end customers and gaining valuable feedback to incorporate into the product, which you don’t really get clearly from a business development partner.
I’m not sure I can say definitively which of the two jobs is harder since it depends entirely on your skill set and personality. Business development does require strategic thinking so you can explain why it makes sense for both companies to change their product or distribution roadmap. Sales requires some user experience thinking so you can explain why a product is best designed for a particular user. They both require skills of persuasion.
That said, I do think business development is incredibly hard from a time standpoint. It’s hard to create urgency when there isn’t any; in addition, it’s hard to measure whether someone’s makes progress or success in business development. Consequently, BD may be ultimately harder to succeed in since it requires a lot of faith and time. But if you can convince someone to do something they don’t have to do, you have a really valuable skill.
Either way, it does still boil down to: deal or no deal?
DEAL! (no better place than the Great Wall to conduct business)