Sales and business development are often lumped together — seen as extensions of one another that amount to a single practice. But that's not the case.
While both are dedicated to getting your company's solution into customers' hands, they're more like separate but complementary elements as opposed to a single entity — and your sales efforts can suffer if you don't have both.
Here, we'll take a closer look at business development, see some key roles related to the practice, differentiate the concept from sales, and explore the interplay between the two elements.
'Business development' generally refers to the sum of the actions a company takes to identify prospects whose business needs pair well with its offering's benefits. The process often involves activities like conducting prospect research, gauging competitive positioning, networking, and forming strategic partnerships.
In the context of a sales process, the term "business development" — also known as "sales development" — generally refers to the top-of-funnel activities conducted to identify, connect with, and ultimately qualify leads with particularly high buying potential.
Well-executed business development can set a smooth course for sales reps, operating further along a sales process. It makes for more amicable prospects and, in turn, more straightforward, effective value propositions.
Sales Development Roles
Sales development roles can include business development rep (BDR) or sales development rep (SDR) roles. These roles are typically entry-level roles within a company's sales organization that can align with career paths in sales, account management, or customer success management.
Business Development vs. Sales Development
It's easy to conflate business development representatives (BDRs) with sales development representatives (SDRs), and that's fair. The positions are fundamentally similar — to the point that some companies don't even distinguish between the two.
Regardless of how a business defines each role, neither carries quotas or closes deals — and both ultimately aim to move qualified leads through a sales pipeline. In most cases, the distinction between the two relates to whether they engage with inbound or outbound leads.
BDRs are typically responsible for prospecting cold leads, whereas SDRs focus on qualifying warm ones — so BDRs handle the outbound side of business development, and SDRs account for its inbound element.
Both roles tend to involve conducting thorough research on leads, engaging in proactive outreach, developing extensive knowledge of niche markets, and taking on other key activities to help thoughtfully and effectively qualify leads.
Where does sales come in?
Sales is all about closing. After receiving a qualified lead from an SDR, sales reps take the deals across the finish line. Sales reps might perform some additional qualification in certain circumstances, but their primary objective is to close deals. Sales reps are also responsible for demonstrating the product, handling prospect objections, and drafting contracts.
Business Development vs. Sales
The distinction between business development and sales essentially boils down to the difference between 'lining them up' and 'knocking them down.' Business development reps identify and pass along good-fit leads, allowing a company's sales team to approach more accessible, accommodating prospects.
Although sales and business development require separate teams and represent different functions, it's easy to see how important it is for both strategies to work in lock-step.
Exemplary selling isn't possible without dedicated business development, and business development's requisite relationship-building rests on a company having a solid solution and reputation for effectively accommodating a given market.
SDR and sales rep positions don't have too much crossover when it comes to day-to-day activities — unless your reps are also responsible for some of their own prospecting.
That being said, both teams need to be hyper-aligned if you want to get the most out of your broader sales efforts. SDRs, BDRs, and sales reps must understand your organization's ideal buyer persona and consistently spot good-fit opportunities.
Why separate sales and business development?
So why should your organization make and maintain a distinction between sales and business development? Well, keeping them separate offers some attractive benefits to your company.
Alleviating Difficulty of Reaching Buyers
According to Bryan Gonzalez, a sales development analyst at research and advisory group TOPO, one of the primary reasons why the sales process has been split into business development and sales has to do with the increased difficulty of reaching buyers.
By Gonzalez's account, reaching a buyer "now requires a larger effort by smarter people...More research and more touches on a lead are required to connect.";
The modern buyer wants to be understood before connecting with a sales org — so naturally, your organization needs to take the proper strides to develop that kind of understanding. Having a dedicated business development infrastructure helps you get there.
Efficiency as a Byproduct of Specialization
Closing is no easy feat, and it doesn't make sense to have your top sales reps spend time researching companies and hunting for leads if they're best at selling.
In the same vein, prospecting and qualifying is neither a fast nor simple process. Separating prospecting from selling allows each team to focus all its energy on one task — instead of dividing their time between two different and time-consuming objectives.
Career Development Perks and Reduced Hiring Costs
Another advantage of splitting the two roles is the ability to mold reps from an early stage in their careers and cut down on hiring costs — so says HubSpot's global director of business development Justin Hiatt.
According to him, "A sales development team takes some of the prospecting and qualifying burden off your quota-carrying reps' shoulders...but its grander purpose is to become a training ground for your sales organization. It's a place for your SDRs to prove they can become quota-carrying reps and should feed new reps into your organization every year. "
Sales to Business Development Handoff
The point at which an SDR passes a lead to a salesperson will vary from company to company. It rests on how your sales team defines what makes a lead "sales qualified."
There are several different frameworks for sales qualification: BANT (Budget, Authority, Need, Timeline), ANUM (Authority, Need, Urgency, Money), and GPCT — to name a few.
But no matter what framework you use to qualify leads, SDRs should become adept at uncovering the following:
Whether they're talking to a decision-maker: If the contact is a low-level employee with no purchasing power, it's imperative to figure that out sooner rather than later.
Whether the company could use your product: If your product or service solves a problem that doesn't exist in your lead's industry, it's not a good idea to pass that lead along to a sales rep.
Whether the lead's problems can be solved by your product: Every company has different needs. Digging a little deeper to find out exactly where a lead needs help is critical to determining whether or not your product can solve the problem.
Many organizations have their SDRs go a step further than this basic qualification to get a better sense of whether a lead is ready to buy. They require SDRs to look for two additional pieces of information:
Whether the lead needs a solution in the near future: It's possible that at the time your SDRs first make contact with a lead, their problems aren't serious enough to warrant a purchase. This doesn't mean the lead is dead, but passing it along too soon is a waste of sales reps' time.
What kind of budget the lead is working with: This isn't the time to get into specific pricing breakdowns or negotiations, but it's important to know if your product is priced in the same ballpark as what a lead can afford.
SDRs should spend the majority of their time asking questions and listening to the prospect throughout the qualification process. However, it's also important they educate leads about what solutions your company offers and start demonstrating their value — that way, any potential misalignment is rooted out early.
Sales Development Call vs. Sales Call
An SDR or BDR's ultimate responsibility is to find out as much as possible about a lead's company, pain points, and need for a solution. Early conversations should revolve around gathering this information.
A sales conversation picks up where the SDR or BDR left off, with the endgame of getting a deal signed. Sales calls can cover a wide range of subjects — here are just a few examples:
Demonstrating how your value proposition applies to your prospect's business pain
Comparing your product to your competitors'
Setting up a trial of your product, if applicable
The degree of separation between business development and sales will vary from organization to organization. If your company is on the smaller side, there's a good chance you'll have your sales reps be responsible for both prospecting and closing — and that's okay.
But as you grow, separating and clearly defining the roles of the two teams will allow each to focus on what they do best, making your sales efforts more efficient and helping your business reach new heights.
Business Development Titles
Business development roles don't end with BDRs. Here are some business development titles to hire for:
Business Development Manager
Business Development Specialist
Business Development Representative
Vice President of Business Development
Director of Business Development
Creative Job Titles for Business Development
There are other, creative job titles for business development you could hire for as well.
Strategic Partnerships Manager
Strategic Alliance Specialist
Senior Solutions Consultant
B2B Corporate Sales
Senior Account Executive
As I mentioned at the beginning of this article, business development and sales should be treated as separate but complementary halves of your broader sales efforts. If you want your sales org to be as efficient and effective as possible, it's imperative that you invest in and bolster a solid business development team.
Editor's note: This post was originally published inApril, 2020 and has been updated for comprehensiveness.
Originally published Jul 28, 2021 5:00:00 PM, updated July 28 2021