If you think there’s a common understanding of Business Development, think again
4 September 2014 Leave a comment
In meetings with prospects it becomes clear to me that they all have different ideas about business development. Some think it’s sales, others say it’s about partnerships and other commercial activities. That’s not their fault, many suppliers only focus on specific areas of business development. So it’s time to reduce the complexity and make it simpler.
As you can see from the attached video, business development can mean different things to different people at different companies. Disappointed I couldn’t help you out? Continue reading and find out why you should not be.
So, how can we define Business Development?
After searching on Google, this came out as the best available definition for me:“Business development is the creation of long-term value for an organization from customers, markets, and relationships”. Simple, but it covers everything business developers have on their plate. Essentially, business development is about the combination of long-term value, customers, markets and relationships. For a better understanding we need to break down the definition to proof the strength of it.
Long Term Value
What do I mean by “long term value”? Value for a company is a positive and growing revenue stream, but other elements such as prestige, image and branding can be included too in order to grow. Long term is related to a strategic approach, meaning that business development is not about hit and run and making a quick buck.
Business developers need to solve questions for Value Propositions and Revenue Streams.
- What value do you deliver to the customer?
- Which one of your customers’ problems are you helping to solve?
- What bundles of products and services are you offering to each segment?
- Which customer needs are you satisfying?
- For what value are your customers willing to pay?
- For what do they currently pay?
- What is your revenue model?
- What are your pricing tactics?
Your customers are obviously the people who pay for your products and your services. Without them you don’t have any business to develop. But not everyone is a customer for your business. Business developers need to solve the following challenges:
- How do you get, keep and grow customers?
- For whom are you creating value?
- Through which channels do you reach your customers?
- Which channels are most cost-efficient?
Customers belong to specific markets. You can segment your markets by geography, by industry, by demographics or lifestyle. Identifying opportunities to reach new customers by entering into new markets is a key activity for business developers. Take for example the Energy market. You can expand your current market such as Oil & Energy with a new market such as Solar Energy. There’s a big chance you need to amend your value propositions too.
Business developers need to solve the following issues:
- Who are your most important customers per market?
- What are the customer archetypes per market?
- Through which channels do you reach our markets?
- Which channels are most cost-efficient?
Last but not least, good relationships with your key stakeholders are fundamental to enabling the flow of value for the long term. Relationships with business partners, customers, employees and press to name a few. The key effort is building, managing and leveraging trust, respect and a mutual appreciation of each other’s value which is critical to your overall success.
Business developers need to address the following topics:
- Who are your key partners?
- Who are your most important customers?
- Who are your key suppliers?
- What key resources do your value propositions require?
Here’s my takeaway
As you can see, business development is a complicated and fascinating discipline that deserves a clear understanding. After nearly 20 years working in various business development areas I’m still passionate about its impact on results for companies provided it fits in the strategic level of their organization. And remember that if you don’t have the appropriate business development skills, there’s always someone out there who can help you to uncover new commercial opportunities.
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