Business Development Vs. Sales: What’s the Difference and Why You Should Care?
Many founders we talk to believe business development and sales are interchangeable—simply two different ways to describe the same function… right? Not quite.
Keep in mind, the scope of both roles can vary across organizations. While early-stage startups may bundle those roles, more mature companies are likely to hire sales development and business development reps separately.
If the roles are so closely related, why does it matter what the differences are?
Here’s the thing: if you understand those different functions early on, you’ll know why you’re hiring one, not the other, and what outcomes to expect. This knowledge will help you structure your sales process, getting a better view of your sales cycles, revenue streams, and market segment you’re in.
What Is Business Development?
To be successful, a BDR has to understand its company’s offering and how the market operates, including what are the trends, shifts, and general tendencies. They should understand how to use social media and other platforms to connect and build real relationships.
When meeting with their targeted businesses, business development reps should try to understand the business as a whole and offer advice or counsel rather than immediate solutions to the problem.
What Is Sales Development?
Sales development reps should know their company’s product inside out and be able to connect the dots between the product and the prospect’s pain points. Instead of advising, they’re rather addressing the prospect’s doubts and persuading them to go with the solution (if there’s a real fit!)
What’s the Difference Between a Business Development Manager and a Sales Development Manager?
The business development manager focuses on introducing your company to other companies and expanding to new markets while the sales development manager is working on qualified leads to move them toward sign-off.
Think about business development reps like researchers who are evaluating the market and new business opportunities. Meeting with prospects and gathering information about their business struggles helps verify whether there’s a transaction opportunity.
If the deal seems promising, business development reps pass the contact to sales development. The sales department is generally more focused on making the transaction happen—like ”Ok if you have this problem, I have this solution.”
Here’s the summary of key differences between sales and business development process:
Who Should You Hire First: Sales Development Rep or Business Development Rep?
When you’re building a sales team from the ground up, it can be difficult to decide which role you should hire first—or to bring on more of in the early days.
The answer is… well, it depends.
Start by asking yourself which one sounds like a higher priority within your organization right now.
If you’ve got product-market fit and are closing a high proportion of the prospects you speak with, but just need a higher volume of leads to continue flowing through your pipeline, then hire a business development rep.
If you have more qualified inbound leads but you simply don’t have enough time to follow up with every lead, schedule a meeting, do a demo, and close the deal, then your focus should be on getting more sales managers on board who can help close more of your hot leads.
Sounds pretty straightforward, but the reality is that it can take a while to get to this stage.
In the earlier phases of your business (or before acquiring funding as a startup), it’s natural for founders and other members of the team to take on both business development and sales-related responsibilities while resources are constrained before sales hiring becomes a viable option.
As long as the founder-driven sales stage is working well and generating revenue, that’s ok for a while.
Over time though, the separation of the two roles should become more pronounced and specialized as your business begins to scale and you can afford to invest in better solving your bigger problem—generating more leads or bringing on salespeople to close more of the leads you already have.
Why Business Development and Sales Need to Be Separate
Let’s examine a few of the critical reasons why your business stands to benefit by separating the roles of business development and sales.
Business Development Reps and Sales Have Different Skill Sets
When you allow members of your sales team to focus solely on either prospecting or closing, they’ll develop a level of expertise in their role that’s otherwise very difficult to achieve.
Instead of task-switching throughout their entire day, your business development reps can focus on doing everything they can to bring more qualified prospects into the company’s pipeline. Conversely, your sales reps are empowered to work on nothing but the key activities in your sales process that are proven to close more deals and generate transactions.
This difference in activities also demands a unique set of skills.
Business development representatives should have a holistic view of the prospect’s business and the whole vertical. Market research or advisory skills are key here. Sales representatives, on the other hand, should be more skilled in negotiation and persuasion which are essential to make the transaction happen.
Create an environment that accelerates the development of very focused skill sets for both roles and you’ll see bigger lead volumes that translate into more deals closed.
Business Development Reps and Sales Have Different Focus Points and Goals
When you have salespeople that are also doing their own prospecting (researching, qualifying, doing market research, initial outreach), their calendars can quickly fill up with a myriad of different activities like conducting research, cold calling from a list of inbound leads, and sending cold emails to prospects. Their calendars can quickly look like…
When you separate the responsibilities of business development and sales within your organization, you’re grouping similar activities together and making individuals responsible for a limited set of goals that are directly impacted by the activities they’re expected to do daily.
The goal of any outbound business development work is to start a conversation and develop a relationship that can be passed on to sales for closing. Everything a business development rep does should revolve around finding more prospects, qualifying the right ones, and routing them to your sales team for closing.
Sales professionals work against a sales quota—a thoughtfully calculated monthly or quarterly minimum for the number of customers (or revenue figure) they’re responsible to close. Sales reps are often incentivized with increasing levels of bonus payouts for hitting and exceeding quota within a given period.
This isn’t the case for business development reps—rather than crushing quotas, they’re responsible for bringing in enough qualified leads to generate a certain amount of revenue. It’s beyond their control whether sales turn those leads into customers.
When you make a clear task separation, you’ll allow members of your sales team to work on fewer tasks—thus empowering them to execute single tasks for focused blocks of time.
Which allows their calendars to look much more like…
The fewer objectives your individual contributors (both in business development and sales roles) are responsible for delivering against, the more they’ll be able to focus on excelling and being more productive on the limited tasks at hand.
Both Roles Have Different Responsibilities That Cover Different Stages of the Sales Cycle
Mixing roles that are responsible for different stages of the sales cycle may create a lot of chaos. If there is no clear scope for both sales reps and business development reps, they may pursue deals that look promising only in the short term or conflict over who’s doing what.
If you want to have a predictable revenue and structured sales process, you need to make a clear distinction between those two roles. Let’s see what it should look like:
Business development roles should include those two main responsibilities:
- Managing inbound leads: This translates into working through an internal list, qualifying leads from various marketing campaigns, and classifying the right ones as sales opportunities to be passed on to the sales team for further vetting and closing.
- Leading outbound prospecting: On the flip side, this kind of outreach involves researching and contacting potential customers that haven’t proactively expressed interest in your product through cold calls and cold emails—to qualify sales opportunities for your sales team.
Sales development roles should include those two main responsibilities:
- Selling: Closing deals (ideally with pre-qualified leads from your business development team to save time) using solid arguments and objection management with prospective customers.
- Maintaining relationships: Although a prospect might not be fit to purchase your product or service today, that doesn’t mean they won’t be in a completely different position six months or a year from now—so relationship building with leads is a major part of a sales rep’s responsibilities.
If you structure your team in the way that business development is the first touchpoint while sales reps are those who take over, you’ll see that, instead of personal preferences, they’ll start collaborating toward the company's common goal.
How Business Development and Sales Work Together (3 Common Questions)
Now that we’re clear about the separation between business development vs sales, let’s talk about how the two roles should best work together, for maximum effectiveness on your sales team.
1. When Should Business Development Pass a Lead on to Sales?
Your sales team has quotas they need to hit, which means they can’t waste time talking to prospects that aren’t already well-qualified. Otherwise, they'll be wasting time and energy chasing the wrong leads and diluting their close rate.
Business development reps should pass a lead on to sales as soon as they’re qualified. However, that doesn’t mean business development teams and sales teams shouldn’t have a collaborative work relationship.
WeWork VP of Business Development, Scott Pollack explains, “Business development teams should be identifying, evaluating, and pursuing opportunities to create long-term value for a company. This means BD teams and sales teams should happily coexist—the sales team gets to work on closing opportunities that can drive revenue today, while the BD team focuses their attention on opportunities to open new channels and drive a flood of new leads for tomorrow.”
As Pollack suggests, it’s incredibly important that business development teams focus their time, effort, and energy on building relationships only with the most qualified leads that stand a chance of becoming new customers. Then, they’re worthy of being handed off to sales.
How do you know when a lead is fully qualified and ready to be closed? That can vary a bit based on the type of product you’re selling and the market you’re serving, but starting with choosing from these 42 B2B qualifying questions to ask your prospects won’t hurt.
To qualify your prospects, you’ll want to accurately gauge how well they match your buyer persona or ideal customer profile with key information about company size, location, and industry.
Next, you want to assess their needs to make sure there’s a true use case for your product, develop an understanding of their purchasing process to make sure it’s a match with your selling process, and assess other competitive options they may be considering.
If everything checks out and the prospect still appears to be a strong potential customer, then they’re qualified—and ready to be closed by your sales team.
2. Should There Be an Overlap Between Business Development and Sales?
In terms of day-to-day activities? No, not really.
Business development should be tasked with prospecting and qualifying. Sales should be focused only on closing those qualified leads and generating transactions.
However, your business development professionals and sales reps do need to be on the same page about who your ideal customers are—their characteristics, qualities, and the kinds of problems your offering can best help them with.
Due to the rapidly changing environment in startups, this requires frequent cross-team collaboration.
As CreativeLive Director of Partnerships and Business Development, Kimberly Pousman explains, “There not only should be overlap between business development and sales, but there needs to be overlap, whether you personally want it or not.”
Pousman continues, “One of the keys to being great in either a business development or sales role is asking the right questions. When you’re looking to grow and expand, you need to ask the right questions, experiment and actively source feedback from others—so if your teams are operating in a silo, they’ll miss out on valuable opportunities to learn from each other and advance your growth rate.”
3. How Does a Business Development Call (or Email) Differ from That of a Sales Rep?
The biggest difference between the calls and emails that business development reps send vs those of a sales rep is that most business development activities are done toward either completely or relatively cold prospects—meaning that these prospects have likely had little to no interaction with the company before this initial contact is made.
By the time a sales rep is brought on to an account, the relationship has already been established and the lead is qualified, making the communications much warmer than those of a business development rep. The conversation with a sales rep is about how to make a mutually beneficial deal happen, rather than gauging the initial interest or need.
Bonus: The Key Traits You Need to Look for in Every Business Development (and Sales) Hire
Bringing the right business development and salespeople onto your sales team is crucial in making meaningful progress toward growing your business.
Here are key traits that your candidates should have:
- Communication and people skills: If you hope to cultivate strong relationships with prospects and customers alike, having strong communication and people skills is crucial.
- Hunger and drive: The most successful salespeople in the face of a challenge aren’t discouraged—rather, they look forward to the opportunity to excel, surpass previous expectations, and move up to the next level.
- Discipline and confidence: The best salespeople know that sales is a numbers game and that the only way to recover from rejection & failure is to pick up the phone (or get back into your email), and keep executing.
- They’re consultants at heart: Look for people that view their role as partnering with prospects to make sure there’s a mutual win-win in each potential deal.
Ready to Structure Your Sales Team to Win More Deals?
Now it’s clear to you that it’s not only about the different job titles. Business development involves more strategy while sales development involves more execution. If you’re still unsure which role is a better hire for your business, think about your sales objectives for the next three to six months.
If you’re working on improving your sales volume, business development can help you set new partnerships and find opportunities worth pursuing. But if you’d like to improve the close rate, think about hiring a skilled sales rep. Either way, good luck with the process!