With the ever-increasing competition in the business world, it has become vital to make a distinction between sales and business development in order to set strategies towards growth. Sales and business development on the surface appear to serve one purpose, as they both involve getting clients. This blog post outlines the basic principles that distinguish sales and business development strategies and proposes what strategic business development is and its importance for business success.
Defining Sales and Business Development
Sales involves the direct selling of products and services to customers. Sales teams are concerned with sales revenues, customer engagement, and converting leads into paying customers.
Business Development, however, takes a wider perspective. Its emphasis is on enabling the company to achieve growth over time through market penetration, forming alliances, or venturing into new lines of business.
Key Differences Between Sales and Business Development
There are a number of differences in the sales and business development with respect to their scope and tactics employed.
Objective
The primary objective of a sales team is to meet revenue expectations in a short time frame. According to a report from HubSpot 50% of sales leaders are looking to enhance their customer acquisition strategies. Conversely, business development’s goal is to seek new opportunities and partnerships that enhance company’s growth over years.
Tactics
Cold calling, product demonstration, and lead nurturing are techniques commonly employed by the sales team in order to strike a deal. In the meantime, business development specialists are in the business of exploring new geographical markets and forging alliances. A study conducted by RAIN Group found that companies that had a formal business development process were 50% more likely to grow their revenue than those who did not.
Scope
Sales focuses on making a sale at all costs while business development takes a wider perspective, for instance, finding new potential markets, sectors or partners. Studies also claim that companies that have an exclusive focus on business development are 30% more likely to expand than competitors.
The Role of Strategic Business Development
The process of strategic business development is streamlining the contrasting abilities of a company in regard to its core competencies and the practical possibilities of growing the business in a competitive environment. Here’s why it’s important:
Market Research: Assessing market conditions and customers helps companies take advantage of new emerging markets. Companies that adopt honest and effective strategic business development with the utilization of data up to date witness 19% more of profit than their competitors.
Partnerships: Strategic alliances can lead to huge sales. Research performed by Forrester determined that 49% of the corporations obtained higher revenues from strategic partnerships than from the traditional sales.
Innovation: Strategic business development contributes to innovation through seeking for new business units or diversification of existing products. According to research carried out by Mckinsey., innovative businesses realize growth at the rate of 2.3 times faster than non-innovative businesses.
The Importance of Strategic Business Development for Long-Term Success
The long-term benefits provided by strategic business development to businesses are as follows:
Diversification: In search of opportunities in new markets and new products, a business is not tied to a single source of income. Organizations that follow diversification of the offerings have 24% more chances of surviving along the recession.
Scalability: Due to strategic business development, firms are offered scalable and chronological templates of improvement, which constantly allow a business to penetrate either new areas or markets. In truth, those organizations that pursue strategic development initiatives grow revenue at the rate of 35% on average annually, as per Bain & Company.
Conclusion
In every organization, sales and business development are two sides of the same coin, although there are some differences in these functions. The word ‘Sales’ is particularly aimed at generating income within the short terms whereas business development works on boosting revenues by developing new markets and also developments in the long run. However, this is quite the opposite concerning business opportunities in focusing on the strategic nature of business development rather than sales only, as a technique appropriate to ensure the ability and safety of the organization’s expansion in the future.
