How to Build a Successful Business Development Strategy
Business development is often misunderstood, misinterpreted or miscast as a boardroom buzz phrase, when in fact it’s the foundation of a growing company that impacts every department. In a nutshell, business development is focused on the creation of long-term value from customers, markets and relationships. It supports, but is not the same as, new business, sales and marketing, and also influences everything from human resources to legal guardrails.
The key quality of business development is that it incorporates a broad scope of ideas and skills built around high-level strategic thinking. When resourced correctly with the right tools and talent, it drives the other departments within the business. When undervalued, it finds itself absorbed and overshadowed by those same departments, losing the strategic vision as a result. Find out how to install a successful business development strategy at the heart of your business and how leadership can extract maximum value.
The Elements of a Business Development Strategy
No business has the luxury to rest on its laurels, no matter how established its current standing. The surrounding landscape is constantly shifting, whether the external influences are economic, environmental or political. There is no better illustration of the power events have to shape business than the 2020 pandemic, which (literally) made a household name of Zoom and transformed the way global multinational corporations functioned overnight.
As a result, business leadership must always have a focus on the future, anticipating trends and spotting opportunities, even those that may look like threats at first. This singular vision can be broken down into the elements of a business development strategy.
The Pillars of Business Development
Customers — How does the current product or service align with evolving customer needs?
Strategic partners — Where can new partners, vendors or capital open up new markets?
Existing and potential markets — Do existing data and research support expansion into new markets?
Business brand and reputation — Is the business nurturing existing customers and turning them into champions for the brand?
Clearly, it’s not as simple as turning leads into conversions, which is why business development is not synonymous with sales and marketing. Rather, business development sits above these departments in the overall hierarchy, offering guidance and a roadmap.
Why Business Development Matters
Any two businesses, however different they are in size, location or sector, will ultimately have the same goal: to grow. Business development identifies the opportunities to deliver growth, nurtures them through the funnel, and supports customer acquisition. In that respect, it influences the business at multiple touch points. In a business with an effective development strategy, these touch points are aligned and in harmony. Where development strategy is weak, on the other hand, activity is siloed or even allows for separate departments to work against each other.
Small businesses and start ups will typically bring in outside business development consultants or incubators early on, since the focus of the founders is on their product or service, not on the business taking shape around it. As the business grows, however, it is important that business development is owned internally. Outsourcing has an expiration date and ultimately business development has to imbue the business culture from within.
How Company Leaders Can Optimize Business Growth
It is the responsibility of the C-suite to put a clear business development plan (BDP) in place and to provide space for the processes to help it flourish. When that happens, it is tangible to the outsider. Employees seem empowered to contribute toward change, feel that their input is valued, and are invited to bring their ideas to the table, regardless of status. When it is absent, by contrast, there is a feeling by employees of simply “going to work” and completing tasks without momentum.
Creation of a business development plan starts with a granular view of the state of the business, the industry as a whole, and the competition. A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is the standard tool for establishing the current baseline. Business leaders will also need to consider market opportunities, cost-saving opportunities (such as merger and acquisition possibilities) and, most importantly, the target customer.
By taking each of these separate parts and shaping them into a coherent whole, the business development plan can chart a strategic course for growth that is unique to the business. It may change along the way — indeed, it probably should change if the testing and analytics are up to standard — but it must be in place before the business “leaves the dock” and embarks on the development journey.
These Departments Need to Buy into the Plan...
Sales, marketing, finance, legal, customer service, product development and human resources are just some of the various departments that can make or break business development.
Where sales are concerned, it’s important to note that business development is not about closing sales, but making a sales person’s job easier. The better the insight into each customer persona and the more qualified the prospects, the better sales can present the right offer at the right moment in the journey.
In the same vein, a business development strategy that improves networking and relationship building will boost marketing efforts. The marketing budget, which is typically stressed, goes a lot farther when supported by referrals from satisfied customers, for example, or when content creation and campaign development are aligned with specific, measurable goals tied to established key performance indicators (KPIs).
Business development can also support product development by getting ahead of the trends. Given that product development cycles can be measured in years, and given that costs are high, there is a clear business value in taking a 5- or 10-year view of where the market is heading instead of reacting too late once change is underway.
How to Build a Successful Business Development Strategy Checklist
The task ahead is deceptively simple: Grow the business by extracting more value from existing customers and uncovering new opportunities from the market and partners. That task needs just seven steps to accomplish, as outlined below:
1. Set SMART goals. Every business leader is familiar with the concept, yet it is still surprising how many campaigns and initiatives begin without a clear destination in mind. Whether the specific, measurable goal is to increase customer lifetime value (CLV), enter new markets or launch new products, the goal has to be defined. Otherwise, there is no realistic gauge of success or failure.
2. Define “How?” Once the goal has been selected, define how the current market and buyer persona fit in. Are prospects warm or do they need educating? Is the demand there or does it need to be stimulated? Without knowing the “How” to the “What,” the business cannot qualify leads or allocate budgets prudently.
3. Choose channels. To execute the strategy, marketing needs a clear picture of where to spend, whether it is through paid or inbound channels, cross-selling or referrals, or networking outreach from scratch.
4. Measure and track. The initial KPIs point to the horizon, but insight along the way may show a shortcut (or a longer route to avoid hazards). That requires a steady stream of data reporting, ideally from a single dashboard that is visible to individual stakeholders and C-suite executives alike.
5. Secure the pipeline. As prospects begin to flow into the funnel, the development strategy should support seamless lead qualification so that resources are allocated efficiently. The procurement cycle might be long, especially for sectors like manufacturing or IT, so the business development plan needs to add momentum to avoid leads languishing in the system.
6. Obtain resources. If the resources are not all available in-house, who will take care of the task? The business development plan should identify the consultants, agencies, or new software platforms that will be required along the journey, and deploy them as necessary.
7. Feedback. Business development is a cyclical process, not a one-way trajectory. Insight from each stage of the campaign should feed back into the business to inform future strategy. The goal is to make business development an integral part of the business culture.
Companies Who Are Nailing Their Business Development Strategy
Customers — Amazon
With North Americansales topping $60 billionthe first quarter of 2021 alone, Amazon clearly deserves its reputation for “customer-obsessed” business development. That stems from a laser-like focus on customer experience, supported by constant testing, tweaking and optimization. Most conspicuously, Amazon has single-handedly established same-day delivery as the benchmark, but no other company uses machine learning and artificial intelligence to the same extent when it comes to learning about what its customers need — often before they know they need it themselves.
Strategic partners — Apple and Mastercard
Apple Pay may currently enjoy 90% of mobile wallet share, but when it launched in 2014 there was no guarantee that customers would come on board just because of Apple’s success with the iPhone. Even big brands can falter. (See the Microsoft Zune mp3 player.) By forming a strategic partnership with Mastercard from the outset, Apple Pay could reassure customers that the service was worthy of their trust, while Mastercard benefited from the association with a cutting-edge tech brand.
Existing and potential markets — Tesla
One of the conventional strategies for launching into a new market is to offer a free version, establish value, then entice customers toward a subscription. Rather than enter the hyper-competitive automotive market with this “foot in the door” approach, however, Tesla turned the market on its head. Instead of debuting with a competitively priced model, Tesla burst into the market with the luxury, aspirational Roadster (complete with its six-figure price tag), grabbed the headlines, and quickly inspired a devout following, which should — if all goes to plan — allow it to “grow down” into the affordable car market.
Business reputation — Airbnb
How did the company that famously launched from an air mattress become a $100 billion company that transformed the hotel sector? Hint: It wasn’t by outspending its rivals on advertising. While Expedia and Booking spentmore than $10 billion on advertisingin 2019, Airbnb spent a tenth of that. The secret? Airbnb’s own customers are its main advertisers and brand ambassadors. They are more active on social media, share and comment relentlessly, and keep Airbnb listings on top of the search rankings by default.