When it comes to selling products or services to customers, business owners may find themselves wondering, Do I hire a business development person or a sales representative to grow the company? Some business owners think that these terms are interchangeable and are just two different ways to say the same thing—they are not.
To understand why they are different, it's important to realize there are three distinct stages of securing customers.
First, “suspects" need to be identified. These are people who want to buy the product because of a problem they have. Once they are confirmed as a qualified lead (they have the need the company can solve), they become prospects. Then they are followed up with to secure the sale and become customers.
The transition between these three stages need to be serviced by distinct roles within the company.
Role 1: Business Development
The purpose of a business development person is to attract and create a pipeline of targeted potential prospects. Their job is to get suspects to raise their hand and say “Yes, I might be interested in this product."
The titles of these individuals usually are business development or sales development rep. This can be the more difficult of the two roles. Most people are comfortable talking to a prospect after they have expressed interest, but are not as good at first identifying who these people are from a broad group.
Role 2: Sales
Salespeople move the prospects that are coming from business development. They have additional conversations to generate the sales transaction where these people become customers. These individuals' titles vary widely but usually include sales representative, account manager or the more prestigious account executive.
In terms of daily activities, there is very little overlap between the two roles. However, they do need to share the same vision of who the ideal customers are and what kinds of problems their company can help with.
For companies that are building a sales function from the beginning, it can be difficult to decide which one to hire first. This can especially be hard at the start since there is so much pressure on generating sales transactions for the company.
In the early phase, founders and any other member of the team typically take on both roles. But as the company grows, the team needs to examine the most pressing sales issue they currently face.
For example, if a company has enough prospects but are not closing them at a high enough rate, then they may need to hire salespeople. However, if their close rate is over 30 percent, but they don't have the volume of prospects to talk with, then they may want to consider hiring a business development person to find suspects that can convert to prospects.
As the company grows, these two roles need to be separated since it can be difficult for one person to develop expertise at both.
Most companies can benefit from this specialization. The business development person must have a broader view of the market, talk to more strangers and build relationships for referrals. The salesperson must be able to focus on a finite set of prospects and understand their individual needs that will drive them to purchase from the company. They are the “closers."
If one person tries to do both, there can be too much task switching during their day. Fostering an environment that allows for the development of these roles can help lead to increased productivity for the business development and salesperson and growth for the business.
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