Ask most people which business functions are responsible for getting a company’s goods and services into the hands of customers and they may well reply: marketing and sales. Marketing creates and executes the strategy: channels, pricing, messaging, advertising etc. Sales is responsible to see that at the end of the sales cycle customers buy the product or service. This general view is fine as far as it goes. But it omits another important part of a company’s relationship with its markets and customers: business development. Business development may not be a separate function on your company’s organization chart. But for most companies the responsibilities and activities that characterize business development should be an important part of penetrating customer organizations and expanding your presence within them.
Strong Business Development is Indispensable
Based on my experience, especially in the technology and government contracting sector, a strong business development (BD) function is indispensable. Its primary role is to develop and foster the relationships on which Marketing and Sales depend. Think of BD’s role as opening the door through which a company’s sales force then walks—and making sure that it stays open. BD can be particularly valuable for companies that rely on indirect channels or companies that must navigate through a Procurement department on their way to making contact with a decision maker.
Business development is especially critical for B2B companies that are selling high ticket items that require a long sales cycle. Companies in this space can’t simply sell their products based on features and functions or relatively low price. Their first step must be to establish their credentials and credibility to customers. The old image of business development as “door openers”--who peddle influence and specializes in taking clients out to expensive expense account meals--is out of date. Companies that take this limited approach to BD may get a first sales meeting. But they rarely succeed in the longer run.
Take the example of a company that buys complex, costly technology solutions. The best salesman in the world will have little success selling such solutions to the Chief Information Officer of such a company until the CIO has a well-informed, positive view of the company, its capabilities, track record and financial strength. Establishing this positive image is the role of a BD function or a Marketing or Sales person whose role explicitly includes BD. Influencing the target company’s standards and specifications for products such as you sell can be another BD function.
Business Development Baits the Hook
In essence, BD “baits the hook” with information (such as market intelligence and innovation trends) that decision makers and decision influencers within a target company are interested to learn about and can’t get from other sources. Another key BD function: stay aware of political developments within the company that could affect its likelihood to buy your products.
Business development is about developing growth opportunities by building substantive relationships at multiple levels (including very senior levels) that establish credibility and awareness of your company’s qualifications, with people who can help you market and sell to their company.
In today's business world it is difficult to find a profitable loyal client—and retain them. A head of business development or a business development team can add real value by communicating with all departments in a customer’s organization, including its highest levels. To do this effectively, BD must cross the traditional barriers between sales, marketing, customer care and operations--to penetrate and expand your company’s presence in a growing range of customer organizations.
Contact Stan at stan.paul@newportboardgroup.com
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