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

Marketing Sustainability B2B; Accenture Survey Provides New Insights

By Laureen Peck

Marketers focused on promoting renewable energy, energy efficiency, demand response and other sustainability initiatives learned something new when the New Accenture Survey Results came out recently. Not only did the study find that sustainability initiatives are becoming an integrated part of the majority of business operations today, it indicated that old perceptions of what motivates business decision-makers to operate more sustainably may not apply.

Marketers have assumed for years that business audiences are motivated almost solely by logical, feature-based considerations. It is no different when it comes to marketing sustainable solutions, services, or products. Looking at most trade magazines or online ads on business websites today, it is obvious that marketers appear to believe that business decision-makers tasked with purchasing or researching this type of product are motivated almost exclusively by mandated regulations and/or budgetary concerns.

The majority of advertisements that promote sustainable solutions, whether they pertain to energy efficiency retrofitting for buildings, energy efficiency products, renewable energy services or some other sustainability-producing product or service, rely on “safe” messaging and images. Most of these types of ads have headlines that say something like, “Save X percent on your building’s energy bills!” and use the same tired imagery over and over again. There are literally hundreds of ads online and off that utilize the same stock photography or images such as pictures of solar panels, wind turbines or buildings with tree symbols on them. Because most of the ads look, read or sound the same, there isn’t much to engage business decision-makers enough to make them want to pick up the phone or go to the website for more information.

There is a real opportunity that is being missed by most marketers to steal market share by stealing business peoples’ hearts. Case in point; although Accenture’s survey results showed that reducing energy and material costs was a certainly a top driver for business decision-makers, the number one motivation for this audience was their genuine concern for the environment and society. These decision-makers worry about the future of their children. They want to live in a healthier environment. They want to be heroes at their companies and in their own eyes. In other words, they are human beings who care about more than dollars and cents alone.

What this means is that if B-to-B marketers want to differentiate their brands’ sustainability-producing offerings over their competitors’, they cannot afford to ignore the deeper motivations their potential customers have. Decision-makers may use facts to justify their desire to buy a particular solution or to sell it through to other stake holders in their companies, but it is the emotional connection between them and the brand that will make them feel compelled to purchase one brand’s solution over another. The bottom line is one should not assume that engineers or CFOs only care about the bottom line. They have hearts to go with those minds. Business to business advertising particularly when it is trying to persuade a person to make a significant purchase needs to create a strong connection between that person and the brand, even if the person is sitting behind a desk. END

Marketing Sustainability; Making a Paler Shade of Green, Chic

A couple weeks ago, I attended GEED (Great Energy Efficiency Day) on Capitol Hill where I rubbed elbows with politicians, policy wonks, government officials and industry leaders. I also listened to numerous speeches all promoting sustainability.

According to the 1987 United Nations General Assembly’s Report of the World Commission on Environment and Development; Our Common Future, “Sustainability is the capacity to endure. In ecology the word describes how biological systems remain diverse and productive over time. For humans it is the potential for long-term maintenance of well being, which in turn depends on the well being of the natural world and the responsible use of natural resources.”
 
The GEED conference speakers all claimed to believe that moving the world away from polluting fossil fuels and towards renewable and cleaner energy sources was a worthy goal. The main message of the event however, seemed to be that complete conversion to clean energy by consumers and businesses would not happen quickly due to costs of developing these new technologies and bringing them to market as well as the current economy’s dependence upon fossil fuels to function. Their general consensus was that conversion to a new energy economy will happen, but it will happen gradually.

So, they argued, the next best thing to going totally green is to promote sustainability because this is something that can be done right now that can positively impact the economy and the environment. The belief is that taking this “Light Green” approach will jump start the process of cleaning up our environment as green energy technologies continue to be developed.

The message that saving energy and promoting sustainability is good for economic reasons has taken root and has begun to grow in our political system and corporate culture. ARRA, The American Recovery and Reinvestment Act of 2009 has had a major influence on industry leaders when it comes to promoting sustainable products and practices primarily because of the Green Technologies appropriations in the final bill which total $61.3 billion. Even skeptics who do not believe humans have anything to do with climate change are being persuaded that sustainable development is good for the economy, good for cost savings and therefore good for business.

Although investments in renewable energy are included in ARRA’s Green Technologies funding, loans and investments into energy conservation and energy efficiency programs such as funding for development of an electric smart grid, funding to state and local governments to be invested in energy efficiency, funding for weatherization of modest-income homes, and funding for increased energy efficiency in federal buildings make up the largest portion.

This has led to recent agreements between industry and advocacy groups on new federal minimum efficiencies and initiatives like Home Star credits and Rebuild America. According to the National Academy of Sciences, buildings consume 1/3 of energy worldwide, are the single greatest contributor to greenhouse gas emissions and energy usage from buildings is expected to grow to become 40- 50% of total operating expenses of commercial and residential buildings, so these are important, positive steps for the environment that will also lead to growth in industries that support energy efficiency retrofitting and upgrades.

So what are the barriers to increasing the demand for sustainable products and services? I asked GEED’s “Energy Efficiency Technologies, Today and Tomorrow” panel that included Robert Dixon, Senior Vice President & Global Head, Efficiency & Sustainability, Siemens Industry Inc., Steve Hochhauser, President, Residential Systems, Ingersoll Rand and Michael Lawrence, Vice President & General Manager, Johns Manville that very question. They all agreed that a lack of awareness from the public of how their sustainable products and services could benefit them on a personal level was the single greatest barrier to growing that portion of their businesses. After all, as Michael Lawrence stated, “Insulation is not a very sexy product.”

He may have a point, but he also may have become victim to his own assumption that building products aren’t sexy. In fact, it appears that other business decision-makers in his category and other industry sectors such as energy engineering and environmental services share this same self-perpetuated stereotype. Not many companies that sell siding, windows, insulation, HVAC, water filters, utilities products, etc., have even tried to evolve their brand image and messaging from sensible and utilitarian to sensible and chic – probably because they don’t realize they can. It is actually surprising to see how many businesses in these categories, even the mega corporations, share similar, unexciting branding that could almost be interchangeable.

THE BOTTOM LINE IS SUSTAINABILITY MARKETING NEEDS A MAKE OVER. Studies show that building owners, home owners and employees want to support energy efficiency because they know it will save them money and/or because they genuinely care about the environment. In addition, investors, governments, and businesses are beginning to demand efficiency because they need to meet mandates and/or comply with new building codes. The piece that is missing is that consumers and business decision-makers feel no excitement or emotional connection to particular products and brands that can help them meet their sustainability goals.

For example, corporate representatives attending GEED were heavily promoting the message that energy efficiency should be embraced by all industries because it can both increase revenue growth and is the socially responsible thing to do – but this just addresses the logical reasons for becoming more efficient.

My years of marketing experience has taught me that whether a company sells their products to consumers or businesses, people are people. We all respond to emotional triggers as well as logic. Good branding encompasses both logical and emotional components. This is why in addition to stepping up public relations and corporate communications, companies promoting energy efficiency would be smart to hire marketing partners and advertising agencies that know how to create a compelling brand message to make a paler shade of green chic.


By Laureen Peck

Is Social Media Marketing Necessary?

I confess that when Twitter first made the scene, I personally could not understand its importance as a marketing tool. Fortunately, my agency’s Web 2.0 marketing team did “get it”. This is because they had been implementing social media strategies for our clients before it was popular and saw the possibilities Twitter offered to marketers long before I did. Now I “get it” too.

According to Forrester Research, social media marketing is projected to grow at an annual rate of 34% in 2010, faster than any other form of online marketing. A recent eMarketer study found that the Fortune 500 companies that are not using social media dropped dramatically – from 43% to 9% last year.

However, many marketers, especially at smaller companies or larger, more conservative establishments, are still wrestling with how exactly to use social media to help them meet their marketing goals. To make things even more confusing, although 75% of Fortune 1000 companies have implemented an online social media program for marketing or CRM purposes, at least 50% of those campaigns will fail to produce the results expected, according to Adam Sarner, an analyst with market research firm Gartner.

As marketers start seeing weak or non-existent results, they will either give up on this tactic entirely because it “doesn't work” or they will start looking for partners to help them navigate through this channel if they haven't been completely turned off.

If marketers decide to engage a partner, but don’t really understand what social media marketing can and cannot do for them, they can easily fall prey to agencies who claim to be fully Web 2.0 literate, but actually have no idea what the latest trends are, how develop a social media strategy, or how to measure and track results from it. Given that social media and the Web 2.0 landscape is constantly changing, it is essential full-service advertising agencies are either staffed with experts who understand how to integrate social media strategies into clients’ marketing communications plans or who have partners that do. Smart marketing communications vendors will also have developed mechanisms for measuring results from these types of campaigns.

Social media marketing, done correctly, can provide important metrics, such as numbers of new users, unique visits, page views and time spent on the site as well as providing marketing research opportunities such as opinion polling. It can also be used for direct marketing. For example, LinkedIn recently launched “Faceted Search” a new feature that makes it easier for marketers to reach out and engage specific market segments. Twitter's microblogging service is developing a feature that will link individuals to various brand websites allowing them to contribute to the discussion. Social media features that work to support marketing efforts are constantly evolving.

Marketers searching for social media marketing partners need to choose wisely. I'm sorry to report that there are ad agency sharks who will take advantage of advertising and marketing managers who believe they need to invest in social media marketing because "everyone else is doing it", but who really don't understand its role as part of an integrated marketing communications strategy. Marketers who get taken in by these shark types are likely to get less than optimal results.

In addition, marketers sometimes make the mistake of expecting the agency partner to provide all of the content for their social media outlets, or they assign a low-level person at the company to do this. The best content will come from brand stakeholders at the company who know and understand the brand attributes and the principals of creating a strong level of engagement between potential customers and the brand.

The most effective way to employ a marketing communications partner is to have them create the social media marketing strategy based on marketing goals, business challenges and target audiences. Advertising agency partners are best utilized as trusted advisers who work closely with a company's internal social media manager to provide strategic direction, analyse results and help optimize the programs.

It should also be noted that social media marketing may not work for every brand and target audience. Social media strategies that work well to engage and motivate one group, may be totally ineffective for another. The best marketing approach is always going to be the one that will be most likely to generate the results desired by the marketer. Tactics should be developed based on the marketer's goals and take into consideration budget, target audience, geotarget, timing etc.

To remain relevant, marketing and advertising agencies need to make an effort to learn and understand when and how to use new media tools effectively and when not to pitch social media as part of an integrated marketing communications plan. They also need to be ready and willing to educate clients and prospective clients on best practices for the medium.