The Difference Between BD & Sales
This is a 6 part series on Effective Techniques in Pitching for BD & Sales. Read the other parts here:
1). I want to be a founder but:
2). 50,000 ft., 500 ft. rule
3). It’s not Product-Market fit, it’s PMT(e)
4). 8 Rules for Founders Who Pitch
5). 3 Effective Traits of All Good BD People
6). The Difference Between BD & Sales
Most people think BD (“Business Development”) and Sales are interchangeable. Most people are wrong.
While both are revenue generating roles, meaning, ‘it means to sell something right?’, the techniques used in BD and Sales are different.
SALES IS A NUMBERS GAME
A salesperson’s job is to sell a product to a customer by matching product & features to price. This simply means the salesperson has something to sell, the customer has a need to buy, and the transaction is dependent on negotiating the features and the price.
In this case, Sales is a numbers game. The salesperson wants to try and sell as many people as possible by saying mostly the same thing (the sales script) and maximizing on features to price (negotiation). If a customer doesn’t buy, it usually is because they didn’t need the product or features (no product market fit) or because they couldn’t afford it (budget). But the salesperson doesn’t get too bothered by a non-sale because they just go onto the next person. The success of the salesperson is dependent on how many people they can try to sell in a given amount of time…hence, a numbers game.
BD IS ABOUT CHANNELS
BD is much harder to describe. True, there are different types of BD depending on market, industry, type of product. I’m going to stick to a definition of Business Development that means opening and maintaining channels. Simply put, this means a BD person works with their customer to establish new ways of doing sales. A lot of times this is a brand new way to bring a product to a particular market (“product market fit”). Since it is new, both parties (BD and customer) will need to creatively think about a multitude of factors from pricing to profit to support to many others. But, if a BD person can successfully open a new channel, then it can drive consistent sales through that business. Often, the BD person will also need to come up with the sales script and process (in consultation with the sales team) so that a salesperson can just sell into that channel over and over.
SALES WANTS TO HEAR NO, BD NEVER WANTS TO HEAR NO
To recap, a BD person works with customers to open business channels. After that business channel is opened, salespeople take over and try to talk to all the potential customers in that channel using a numbers game type of mentality.
The next sentence was pivotal to my understanding of BD vs. Sales:
Sales wants to hear no as soon as possible, BD wants to hear no as late as possible.¹
This means that a salesperson is trying to close, close, close. And if she knows that you aren’t going to buy, she wants to know that as soon as possible so she doesn’t waste any more time. After all, there’s a long list of people after you to talk to.
But, a BD person always wants to keep that channel alive. This person knows that there are lots of obstacles to work through and it will take time. And as long as you are still willing to work through obstacles together, she will keep trying because the payoff is worth it. After all, one salesperson can sell one thing at a time; but a BD person can open a channel that keeps on giving.
IS THIS REALLY THAT BIG OF A DIFFERENCE? Can’t I be both BD and Sales?
Yes, and yes. But, if you try to “sell a product” to a customer that’s expecting a BD engagement, they may get annoyed and stop creatively trying to think about how get value from your product. ← This is what most start-up founders struggle with. They are trying to “sell” their product or service when they haven’t found product market fit yet. They should be running a BD process instead of a “hard sell” more akin to a numbers game.
On the flip side, if your product does have a product fit with a buyer, then you should use sales-based techniques to close. BANT would be a great sales technique to recommend here. If that buyer is just trying to stall, or worse yet, get free knowledge on your product or market, then you need to move on. Here’s where you want to force them to say no as soon as possible so you don’t waste time.
One person can absolutely be both a BD and a Sales role, but that person should be aware which role they are performing in which engagement and use the right techniques in that situation.
ON TAIWAN
I’ve spent the last two years actively working with and selling to Taiwanese businesses, and I’ve noticed a few trends. First, a lot of people say they are “BD” when in fact, they’re sales. Meaning, they work in a company with an existing product which has been sold before, and their particular role is to generate revenue for that product. While they can “deviate” from the ways their company has sold that product in the past, they generally don’t. Further, most of their sales lead generation comes from past or current customer accounts. To me, this is a very traditional sales role.
Next, there are not a lot of “BD” people in the younger generation of Taiwan (again, people actively doing BD versus having the title of BD). I’ve asked why this is, and the best and most plausible answer I have is that great BD people in Taiwan often left their companies and became the boss (meaning, they started their own companies or agencies). And because they brought in the deals and opened the channels anyway, they just hired sales people to maintain existing accounts and resell/upsell. But, these bosses kept doing the BD themselves and, unfortunately IMO, never passed along the skill of Business Development to the younger generation which are mostly sales. People have also said these bosses are often hesitant to share BD opportunities with their sales teams because they’re afraid some sales team member will open a channel and then leave the company, taking that channel with them.
Finally, in the Taiwan start-up scene, I often hear “Taiwanese founders can’t sell.” This is a misguided statement. In fact, I bet every Taiwan founder is very experienced with sales; if they’ve ever set foot in a night market, they know how to negotiate/barter (the main foundation of sales). What Taiwan founders lack knowledge in is the disciplined process of “Business Development”, especially in regards to things like IP licensing, technical partnerships, marketing partnerships, even up to M&A and joint ventures. They need more exposure to this type of BD, and it’s a shame that Taiwan has fantastic BD mentors (the old bosses), but the mentorship of BD is not happening.
¹ This is from the fantastic book The Sumo Advantage by Bernie Brenner, who was a fantastic mentor when I was in the Capitol Factory accelerator in Austin, TX.
