Business Development vs. Sales: Striking the Right Balance for Your Growth

Business Development vs. Sales: Striking the Right Balance for Your Growth

January 28, 2020

Sara Howshar

SaaS, and business in general, is full of terms that sound similar but carry different meanings, the kind that newcomers (and sometimes those who should know better) are prone to trip up on. You can add “business development vs. sales” to that long list.

Some finance and operations professionals use these two terms interchangeably. You’ll even see sales rep positions advertised online under the title of “business development representative.” The confusion is understandable. They both involve your business moving in the direction of growth; for both concepts, the higher they are, the better your company’s doing.

While closely related, business development and sales are fundamentally different. Understanding the difference can help you understand the best ways to leverage both to grow your company.

The Difference Between Business Development and Sales #

The difference between the two concepts breaks down as follows:

Business development #

Business development concerns the collection of newly qualified leads. A business development representative will evaluate your company’s current buyer personas, assess where they can be found, and begin producing leads.

Once these leads are qualified — an assessment of whether or not the lead is likely to become a prospect who might buy your product — your business development team can relay them to your sales department.

Sales #

Sales converts those qualified leads from your business devs into transactions. In SaaS sales, your sales team will likely be the first ones to make contact with a prospect, via email or via cold calling, to initiate the sales cycle. A sales rep will then steward the deal toward closure, working to acquire the prospect as a new customer.

Both business development and sales count in the same direction for your business — growth. Nevertheless, improperly distinguishing between these two areas of sales can result in stagnant growth and overworked employees.

Business Development vs Sales: How to Maintain Balance #

When it comes to business development vs. sales, no business can survive without having refined its approaches to both. You can achieve the best outcomes when you keep the two in balance.

An over-emphasis on the business development team can result in more qualified leads than your sales team has time to follow up on, wasting your business development reps’ hard work. There are ways of dealing with a surplus of leads, such as lead scoring, funnel filters, and two-step sales. These are short-term fixes to employ to avoid ruining your revenue prospects — but consistently having too many leads suggests an imbalance in your business dev-sales dynamic.

Bdr vs sales company a

Looking at Company A’s last six months of activity, we can see the dangers of an imbalance that skews too far towards business development, and doesn’t give enough attention to sales. Their lead backlog is healthy - too healthy, it’s getting larger and larger, with no way for their sales department to keep up with it. Growth will suffer as a result.

On the other hand, an overactive sales team will rapidly exhaust your inbound pipeline, leaving you with few opportunities for growth. Growth needs to remain constant for your business to maintain profitability, fund reinvestment, keep pace with competitors, and provide buffers against concerns such as churn. Without a business development team providing a steady stream of quality new prospects to pursue, stable growth is almost impossible for your business. We can see this from Company B’s graph, below.

Bdr vs sales company b

The best way to maintain balance between your business development and sales is to alternate the priority you give to each one. It all depends on what growth areas you’re targeting within your company at a given moment. During periods of steady consolidation, you can then give them equal importance.

What to prioritize and when #

While both good business development and a strong sales strategy are vital for your company, which one you prioritize will depend on what growth areas you plan to target next.

You should consider prioritizing sales when your short-term ambitions correspond with one or more of the following:

  • Your buyer personas are well-consolidated, and you have the scope to target new customers at high volume.
  • Your lead-to-close ratio is less than healthy, and your sales team/methodology needs an injection of quality.
  • You have more inbound leads than you can shake a stick at/have time to follow up with.

In these instances, all signs point toward enlarging your sales team, and perhaps even refreshing your sales methodology.

Shift that priority to business development when your immediate plans involve some of the following:

  • You’re expanding into new industries or targeting new verticals (i.e., much larger or more complex deals) within your existing industries.
  • Your product is market validated, and you need higher lead volume to get closer to your maximum profitability.
  • When your sales team is well-built and functional, and you’re looking to scale.

During a phase of general consolidation in your business, when you’re not pushing to scale or penetrate new industries, you can give equal priority to sales and business development.

What to Look for in a New Business Development Representative #

Perhaps you’re at an early stage of growth, or you’re gearing up to scale your business. As such, you’ve looked to source some talent and onboard a new business development representative or two. You’re not going to hire just anyone — as with any role, there are a number of principle attributes you’ll find in the ideal business development hire.

Adaptability #

Your new business development representative will need to get up-to-speed with your typical buyers and sales methodology quickly. If you’re hiring them at a time when your business is expanding into new markets, they may also need the creative and analytical skills to help you refine those new buyer personas. In any such case, adaptability is key.

Strong Research Skills #

If your BD rep is going to re-engage old leads, refine existing buyer personas, or craft new ones to expand your market share, they’re going to need strong research skills. If you’re targeting a new, hard-to-reach but high-potential market segment, they’re going to need strong research skills. If you’re looking to start making more enterprise deals, your BD rep will need to identify and profile multiple decision-makers. Again, they’re going to need strong research skills.

Excellent contextual knowledge of markets #

Your business development rep’s job is fundamentally to nose out long-term value for your business — the leads they qualify will, hopefully, be those likely to be customers with the highest lifetime value (LTV).

As a result, your BD rep should have a high degree of contextual knowledge of the market you’re targeting. When a prospective BD rep knows growth areas where your product might benefit or how to find hard-to-reach, high-value prospects, that rep can help your company grow by leaps and bounds.

What to Look for in a New Sales Representative #

If your pipeline is well-stocked and you just need to convert those leads, then you’ll need a new sales representative. In that case, the following qualities should be high on your list for new hires:

Drive #

The image of the maniacally driven salesperson, dogged and direct in the hunt for a closed-won deal, is basically the central stereotype of sales. However business changes elsewhere, the driven salesperson is an evergreen, priceless asset to your company. Hire sales representatives with hunger and determination. It’s particularly important across the long, sometimes hard road of a SaaS sales cycle.

Adaptability #

As with a business development representative, your sales rep will need to learn your basic methodology quickly and adapt to frequent changes. From prospect to prospect, they’ll also need to prove themselves adaptable — modulating their conversational style and building rapport with all kinds of potential customers.

Resilience #

There’s a reason why a lot of top sales managers and enablement professionals put a premium on “grit” as a quality in their sales reps. Sales is a road paved with objections and roadblocks, and reps will need to learn fast. Nowhere is that truer than in SaaS, where the longer sales cycle (our research suggests any closed-won deal takes an average of 96 days) and multiple channels of communication make complications routine. A certain amount of gritty resilience is a must.

Curiosity #

Curiosity, an underrated quality in a top sales rep, is fundamental to long-term success. Your rep will address all kinds of people and will be obliged to pursue all kinds of sales strategies — and an eagerness to learn can help.

Receptive to Feedback #

Receptiveness to feedback is a given for hiring in either area — or in any area, for that matter. SaaS businesses thrive on self-criticism and rapid improvement — your reps, wherever they work, must do the same. In fact, a principal reason to seek out curious, resilient sales reps is that both traits make them more receptive to feedback from their sales leads.

And being receptive to feedback is not just a question of mentality — it’s also a practical approach that your entire sales division should subscribe to. Tools like Chorus.ai’s Conversation Intelligence platform help hone in on areas where your reps can improve their communications with prospects. The tool records rep calls, and managers can review the calls and then offer advice to help that rep win deals. Our research shows upward of 10% of won deals are reviewed by a manager, whereas only 7% of lost deals were reviewed.

Keeping the Balance #

Treating both sales and business development as the same concept will result in some seriously lopsided outcomes. If you see them both as something similar, to be dealt with by one hybrid representative, you’re almost certain to find your sales/business dev rep seriously overworked and stretched too thin. Moreover, you’ll make user retention an even bigger mountain for your team to climb.

On the other hand, if you’re unable to tell which of the two pursuits demands your business’s priority today, then you will find that tomorrow’s growth is less than you might’ve expected. Knowing what balance to strike involves understanding the importance of both areas, and then deciding if your business needs to close what it has or aggressively expand. Keeping these distinctions in mind will drive much stronger decision-making and your business onward into the best version of its future.