Business Development or Sales; Is There a Difference?



I came across an online discussion recently where someone asked, “What is the difference between a Sales Executive and Business Development Executive?” One of the replies was, “Business development is just a fancy word for sales that corporations use to make sales executives feel more important and salespeople use to fool prospects into thinking they aren’t trying to sell them anything.”
The funny thing is, as a seasoned business development and marketing professional you would think that I would be offended by that remark, but I was not. The fact is there is a lot of confusion regarding business development activities versus sales activities and many people still get the two confused – especially if their company sells marketing services or other intangibles.The confusion comes from the fact that both business development and sales activities include the act of selling. Alternatively, unless a business is very small, sales roles rarely include business development activities.
That is not to say that one role is more valuable than the other. However, there are some differences in the function and purpose of each. If agency principals do not understand the differences, they could end up with disappointing results from having set unrealistic expectations. To achieve the best results, company principals need to be clear about what they want to achieve in both the short and long-term.
Sales activities are tactical.
If an agency’s end product is more commodity-like and the company is supported by project work and principals wish to maintain that model, a sales approach makes the most sense. Project work can provide a steady revenue flow that will keep an agency busy and financially viable. The negative side of this approach is that agency teams will find they are often competing for new business on price and are unlikely to win accounts with high profit margins. They are also likely to have to pitch or bid on new projects continually, even with current clients which can become frustrating.
Certainly if the agency principals want to maintain or grow revenue in a category or practice area where the agency is already recognized, a sales executive or account services person who is responsible for measurable, on-going and immediate revenue growth can do that job since both are more tactical roles. The executive is usually given the sales leads to exploit or accounts to manage and has all the sales tools they need in place. Their job is to sell a given product or service to an already identified target audience or client within an agency’s established area of specialization or specialized industry category. In this case the act of selling is mainly transactional in nature and is focused on winning new projects or a “book of business” and meeting specific goals or quotas usually within a tight time frame. An experienced sales person who is accustomed to high volume, commodity-based sales and/or short sales cycles will likely do very well.
Sales executives generally earn large commissions based on actual sales or revenue growth achieved – unless they also run the accounts they bring in, in which case compensation structure can be based on a combination of factors since they not only sell, but also project manage.
Business development activities are strategic.
If an agency is more strategically-focused and targets large accounts that are likely to produce sustained growth, a business development approach is going to work better than a straight sales approach. Business developers excel at creating completely new opportunities by opening previously closed doors with the expectation a newly opened door will eventually lead to high profit margin, long-term contracts or Agency-of-Record engagements. Agencies looking to break into a new category, penetrate a new region, open up a new market, promote a new service, or address some other new growth challenge are better off using a business developer to do that job than someone with sales experience alone.
A business developer has a more strategic position and usually has experience creating business development, marketing and/or sales plans, creating new lists of qualified prospects that have been thoroughly researched, managing pitches and writing and/or managing major proposals. Often a business developer is also tasked with spearheading the development of a marketing strategy; sales tools and promotional activities that will help open those new doors and opportunities.
They not only hunt for new opportunities but promote the agency through networking and speaking at events. They are experts at building and nurturing relationships with qualified prospects over time. They generally work on salary and are paid bonuses based on meeting sometimes subjective milestones since a business developer’s success is generally measured by the quality and growth potential of the opportunities they bring to the agency rather than on sales volume alone.
On the negative side, business development usually requires more up front investment then straight sales, so an immediate return on investment is not as likely. However, assuming the agency has all the right tools in place, the right pitch team to help win the business and a top notch account management team that will grow the account once it is in the door, the financial rewards can be very large and produce sustainable profitability.
Can a Business Developer be a good Salesperson?
A person with a background in business development can do well selling projects and/or products too, but only if they are also experienced and confident closers. Generally in business development, since a substantial amount of up front work is required by the developer, a team or another person often does the actual closing. However, some business developers (like me for example) are very comfortable asking for the sale and make excellent closers.
It should be noted that if principals decide to have their business developer act more like a salesperson, they need to make sure that person is a hunter/closer and not just a hunter. They also need to make sure the business developer understands that they are to follow a business development strategy that is likely already in place and that their value will be measured primarily by sales volume achieved within a given time period. Most business developers can fulfill this need for an agency as long as they are fearless closers and sales goals are clearly defined.
Summary List of Sales versus Business Development Activities
Ad agency blogger Neil Kielar does an excellent job of outlining the characteristics and differences of sales vs. business development roles. I liked it so much I copied it here:
Some typical characteristics of sales activities:
  • Tactical
  • Transactional
  • Immediate outcomes expected
  • Revenue growth is primary success measure
  • Probable lower cost to achieve outcomes
  • Sustainability of sales is more uncertain
  • Valued personal characteristics: high emphasis on short-term objectives, unencumbered by larger organizational objectives, money motivation is paramount (within the constraints of ethical behavior, you’d hope)
Some typical characteristics of business development:
  • More strategic, ideally
  • Consultative in approach
  • Longer term outcomes, although not to exclude near-term performance
  • Requires more flexible measurement of value
  • Probable higher costs over the long term
  • When managed well, higher value outcomes sustained over time
  • Success measurements anchored in strategy, which is more subjective
  • Valued personal characteristics: strategic thinking, larger organizational objectives are a priority, service orientation, money motivation is healthy but not overwhelming
By Laureen Peck

© Copyright Laureen Peck ~ All Rights Reserved ©