The Difference Between Sales and Business Development (The Complete Guide)

Though both Sales and Business Development exist to help grow your business in terms of revenue, their job role objectives can be sometimes unclear and raise questions on how do they do it and what are their key differences.

I’ve decided to dedicate the following post for all those who still might have some questions about the different job roles and want to a better feel of their day to day activities.

At the end of the post, you will have a clear picture of the main differences between Sales and Business Development:

• Definition
• Key Differences
• Table of Comparison
• Day-2-day Job Role
• Conclusion

Definition

I liked the phrase given by Scoot Pollack on Forbs which in my opinion is the closest one to the definition of Business Development:

"Business development is the creation of long-term value for an organization from customers, markets, and relationships.”

-Forbes 

The focus here is the long-term value and the different focal points that the business development team is trying to tackle.

On the other hand, sales are all about closing.

After receiving the leads, it’s all up to the sales team to take the deals across the finish line. Sometimes sales have various roles within the organization, though their primary objective is to close the deal and bring money to the table.

I recommend you to watch the scene from a movie called Glengarry Glen Ros, where Blake (wonderfully played by Alec Baldwin) is giving one of the best sales motivation speeches in the cinema - A.B.C –

“Always Be Closing”

Key Differences 

Focus:

Sales managers are mostly customer-oriented with the main goal of closing a deal and selling the product/service. Business Development manager is mostly looking for strategic partners to expand the current activity by presenting ideas and a solution that has a mutual interest. 

For example:

Conversely, business development focuses on the strategic partners, as they offer products to various market segments which in turn, increases your company’s customer base.

As a business development manager, there are 2 different scenarios that I’ve encountered the most:

A – A very strategic partner, that usually takes a very long negotiation period, but has a tremendous impact on your business. This can be a very complex negotiation that normally is not within the daily scope of the sale reps. 

B – Joint venture (for example, it can be a technological software company, a solution provider OR a company that has significant experience in the targeted market. You approach them to formulate a joint venture deal to tackle other partners in the market that will help you eventually to expand your reach to many customers.)

Seek For:

Sales are all about working according to revenue goals. Sales can have a monthly goal, quarterly goal, mid-year, or a yearly revenue plan that one must strike. It is relatively easy to determine how well you are performing as a sales rep. On the other hand, as a business development manager, you seek to expand your business outreach and it relatively difficult to pre-determine their revenue plan.

Time Horizon:

Sales are looking to sell the product and then continue to the next prospect, therefore they will be looking for short- midterm deals. Business Development is looking for long-term partnerships that have the potential for long-term business synergy. 

Required Skill Set:

Though both sides require a high level of communication & interpersonal skills, there are some key differentiators to look for. While sales aim to close a deal by maximizing their closing techniques, the business development is looking for synergy for the most part and will put it to motion their analytical and strategic mindset among others.  

Knowledgebase:

When you are a sales rep, you must have an in-depth knowledge of the product or the service you are selling. There is no excuse for being unprofessional when it comes to a simple question about your product. Business Development is all about a profound understanding of the whole organization's perspective with the different departments and what will be the best solution they can offer to potential partners. In short, sales must know about what they sell and business development must be familiar with the company to be able to seek the best synergies with potential partners.  

Negotiation Period:

While sales are related to short-term sales, i.e. weekly, monthly, or quarterly. The negotiation period is relativity short. You make the sale and move on to your next challenge. In that sense Business Development deals can take up to a very long time, the long decision-making process and so many other variables may affect the negotiation period. (On one occasion, I’ve closed a big deal after almost 1.5 years(!) after my first reach out).

Addressing Management Level:

In the realm of B2B marketing, sales reps, for the most part, will face their equivalents or Low-Mid decision-maker managers. Their aim is to sell a product or a service and depending on the complexity of the deal will determine which level of seniority in the company they will face in their negotiation. Business Development, for the most part, will face the senior management level to discuss the potential business venture.

Reward base:

Sales are encouraged and rewarded by a commission base. It can be a percentage of a deal they closed, a fixed number or any other stimulus to keep them selling and in return increase their paycheck. This commission method can be quite challenging to reward the business development for their hard work, due to the long turnover of a deal, the amount of revenue and risk involved in this venture. There is no secret formula here to what will be the best way to reward a business development manager. From my experience, it can be sometimes a yearly bonus, a commission, or any other reward structure that makes sense.

Day To Day Job Role Responsibilities:

Sales:

• Lead and prospect research
• Sales activities – Calling, emailing, demonstrating how your value proposition, Comparing your product to your competitors', Product demonstrations, Price breakdowns, Contract terms.
• Account management and up sales. Existing customers, especially the strategic ones, need to be looked after. Great customer retention and growth is vitally important.
• Meetings: in-house meetings with account managers, clients, product managers, marketing.

Business Development:

• In-depth lead and prospect research, looking for the highest potential of synergy and joint venture. (Sometimes using BI tools like Crunchbase and Linkedin Premium)
• Sales activities – Calling, emailing, and reach out to potential partners. Demonstrating how your value proposition can work best for their business plan.
• Marketing – Producing content, media kits, infographics and generally working closely with the marketing department to better peach the potential of mutual synergy.
• Product Management – Presenting the product team the potential and if we will need to make any modifications to make it work.
• Meetings (With but not only): Marketing, sales teams, product managers, senior management within the company, R&D ( in high-tech companies, it is important to understand what new technology is available and how it will impact existing and future customers).

Bottom Line.

We saw that Business Development is soldering of sales and marketing roles. Both roles are important to grow your business in Short & Long term. Sales can be described as that part of marketing that encompasses direct interaction with prospective customers to induce them to purchase the product or service offered by the company. On the other hand, Business development refers to the act of following the strategic opportunities for the firm, by entering into partnerships with another company or identifying new markets for the company’s product.

The degree of separation between business development and sales will vary from organization to organization. Especially in smaller companies where sales reps might be responsible for both sales and business development. But as you grow, separating and clearly defining the roles of the two teams will allow each to focus on what they do best, and help your business reach new heights.

From my experience, it can be quite challenging to find a person who has the full skill-set for being a productive Salesman and a visionary Business development manager.

Best regards and good luck finding the right Sales/Business Development Professional for your team,

Alex.