What the (bleep) does "Business Development" actually mean?

I recently read and participated in a discussion about the difference between Business Development and Sales executives. Although I responded, I did so in passing and did not really take the time to lay out what a clear definition is for each of them and how they integrate and overlap. I stated quickly (bad grammar and all) that "Business Development develops business and sales closes business." Seems simple enough I guess. But I think everyone would agree that there is a hell of a lot more that goes into Developing Business and Closing Business.

Even companies that enjoy recurring revenue from existing customer (I have heard of companies northward of 80%), have to to find new customers. There is only some much you can sell existing customers. In a perfect organization there are three types of activities that have to happen in order to obtain new customers. To obtain new customers you need to:

1. Understand your markets and the needs of non-customers 
2. Develop new relationships and become a trusted adviser to new prospects 
3. Close new deals! 

Ideally, these three aspects should be separate roles and in some cases departments. For now, let's leave marketing out of this (refer to my post I Work in MARKETING, not Advertising!). Let's assume that we already understand points 1 and 2, ready to go to market and start creating relationships. This is where Business Development comes into play. Business Development professionals should be experts in four things:

1. Identifying the right people to talk to 
2. Making initial contact with executives and gaining their trust 
3. Navigating an organization and understanding its structure 
4. Finding hot button issues and common pains across the organization 

These are the ends. There are a million means. What is important to remember is that this is not time to sell! During the business developing part of the sales process the potential customer is not ready to buy If they were, they would have already contacted you (as long as marketing is doing their jobs). Business development is about doing the research, working with executives that now trust you to better understand your industry. These executive are busy but very smart. They are experts in their industry, not yours. A VP of R&D may be knowledgeable about the ERP industry, but not like you are. It is your job to help them to understand the landscape. Who you are, what you offer, who your competitors are (and for pete's sake, don't say "we don't have any")? The more information you share, the more they will trust you, talk openly about their pains, concerns, and more importantly, help you to understand and navigate their organization (steps 3 & 4).

Business development is not about selling your product or service. It is about selling yourself, your company and your industry. In today's complex sales' process, it is impossible to call someone and end the call with a commitment to buy. That should not be your goal. The call should always end with sending information and an agreement to follow up at a later date. If you get an appointment scheduled with the prospect one of two things has happened: 1) You pushed too hard and will waist an hour of time for him and your sales rep or 2) you got lucky and found some one that is ready to buy. The prospect should hang up the phone and think "that was good, knowledgeable and looking forward to their info!" This is the foundation that will lead to further understanding whether or not they have a need for your product or service.

Later on when the sales rep is trying close business, the work that business development has put into questions 1-4 will make it much easier to close business. Closing enterprise deals (6-7 figure deals) has only gotten harder. Now companies are more strapped for budgets, more people are involved and decisions are more political. Getting in good with the VPs and C-level employees helps, but doesn't seal the deal. Plus, with more competitors in every market trying to sell similar or the same functionality can make it a nightmare for evaluation teams. Companies now have more buying power than ever before (thanks to the internet) and usually have a preconceived idea of who you are before they even contact you. Sometimes you may be behind before you even start. Most companies have become great at portraying themselves as the leader in a particular market by spending more money on marketing than they do on their product. Not a bad strategy if you are finding deals 10-to-1 over your competitor that is spending more on their product and less on marketing.   In this environment, business development has to be the bridge between sales and market. Business Development does both, has to be involved in both and has to own the process of finding new customers and entering new markets. Sales should not being doing this - they should be closing deals that they have in their pipeline. Marketing should not be doing it - they should be creating killer content and quit honestly, most marketing people lack the people skills and determination to be on the front lines! 

Additionally, please do not make the mistake of compensating your business development people according to revenue contributions. This is unfair and isn't the right tool for motivation. If business development reps wanted to be compensated and judged by revenue, they would be in sales. Instead, pay them well and put a great lead scoring process in place and reward them for great leads. Give them bonuses when things close. Get them involved in the development of the content as they are the Voice of the Prospect. Get them involved deep into the sales process with the sales representative. This will provide them additional experience, knowledge and confidence about how to control a good conversation with senior executives as well as provide support the sales representative while he/she gets comfortable and builds rapport with the project champion.

Make your business development representatives the bridge between your sales and marketing groups. I guarantee you will not regret it.