Business development, colloquially known as biz dev, is a broad term that refers to a range of activities that create value for your business. While exact approaches and goals will vary by your industry and organization's specific needs, a comprehensive biz dev strategy uses partnerships, networks, and markets to identify and capitalize on growth opportunities.
Here’s everything you need to know about business development, including how to create a biz dev strategy that drives organizational growth.
Key business development activities
A business development strategy typically focuses on the top of the funnel, where prospective customers are just learning about your business. Sometimes, these strategies concentrate on identifying and nurturing promising leads through various marketing initiatives, guiding them toward contact with your sales team to close the sale. Other times, the focus is on identifying new opportunities through networking, market research and analysis, and seeking out strategic partnerships.
While business development is largely top of funnel-focused, some biz dev strategies may include customer retention and satisfaction. Through tasks like collecting customer feedback and developing loyalty programs, businesses can drive recurring revenue through improved offerings and opportunities to upsell and cross-sell.
Your business's particular strategy depends on its maturity and overall needs, whether it involves developing relationships, increasing revenue streams, or finding new opportunities for advancement and long-term sustainability.
[Read more: Explaining the 7 Ps of Marketing for Small Business]
What are the benefits of having a business development strategy?
In short, a thorough business development strategy supports an organization's growth by outlining the steps needed to increase its value. Here are some of the tangible benefits of prioritizing business development:
- It boosts your bottom line. The primary function of business development is to increase business value. This means honing in on the most profitable opportunities, including potential expansions into new markets.
- It improves your brand image. Resonant marketing campaigns, strong customer service, and continuous innovation all make for a strong image in the public eye.
- It strengthens business relationships. Whether it’s seeking out strategic partnerships, connecting directly with customers, or prospecting for new talent, a strong business development strategy allows organizations to focus their efforts on the people that drive growth.
- It serves as a road map for your team. Business development is a multipronged effort, so having a clearly defined strategy can help align different teams toward common goals.
Zoriy Birenboym, CEO of eAutoLease, emphasized the importance of business development in customer retention and the future of your company.
“You have to be on top of … the happiness of your customers,” said Birenboym. “People need to constantly be reminded why you're better and why [they] should come back. If you're looking for a long-term relationship with prior and new customers, then business development is an important part of running the business.”
Establish SMART — specific, measurable, attainable, relevant, time-related — goals to drive your business development strategy and introduce prospects to your sales funnel.
Do I need a formal business development plan?
While it’s not strictly required, some business owners put together a business development plan that outlines goals and strategies for growth. A biz dev plan differs from your core business plan in that it is focused exclusively on growth opportunities. It might include sections such as:
- Financial goals: What revenue, costs, and profits do you hope to achieve?
- Funding: Do you need capital to fund your business growth?
- Operational and team needs: What expertise and resources do you need to grow?
- Sales and marketing: How will these functions contribute to your growth goals?
Whether or not you write a formal business development plan, you’ll want to factor these elements into any business development strategy. Doing so helps you prioritize resources, create a reasonable timeline, and set expectations for your sales and marketing teams.
How to create a business development strategy for your business
While specific goals and activities will vary, these five general steps can help you craft an effective business development strategy.
Identify your target audience
The first step to creating a solid business development strategy is identifying audiences that offer growth potential. This audience can be small, but it must be relevant to your business and present opportunities for advancement.
Start by examining the demographics of your current customer base to guide your strategy. Focus on specific demographics, such as location or age, to pinpoint firms or individuals that can propel your business forward. This analysis helps avoid wasted efforts on prospects who are unlikely to become customers.
Perform market research
Once you have defined your audience, conduct market research to understand their challenges and needs, and note the existing solutions to these problems. This step can guide your value proposition, identify market gaps, and present ways your offerings can meet customers' needs.
Familiarize yourself with your competitors during this stage too. Research other businesses in your market, and assess their strengths and weaknesses compared to your business. Doing so can help you understand your market position and inform your strategy so you stand out.
[Read more: How to Conduct Competitive Research: Sizing up the Competition]
Set clear goals
Establish SMART — specific, measurable, attainable, relevant, time-related — goals to drive your business development strategy and introduce prospects to your sales funnel. These goals may include entering a specified number of markets within a specific time frame, achieving a revenue goal, or improving customer satisfaction scores by a designated percentage.
While these goals don't have to be directly related to revenue generation, they should align your team's efforts across various departments and integrate with your broader business strategy.
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Generate leads, and build your network
To streamline your business development strategy, determine which channels can most effectively help you achieve your goals. Common approaches include a combination of networking, referrals, advertising, cold calls, and content marketing.
While traditional channels like face-to-face networking excel at building relationships, they can be time-consuming and costly. Digital networking platforms, like LinkedIn, offer a cost-effective alternative.
Paid advertising and content marketing targeting the platforms your audience uses most can effectively generate leads and develop your network. You might even offer demos or consultations for prospects and leads, using that experience to highlight your value and start building a connection. Additionally, leveraging referrals from satisfied customers can broaden your network and generate new leads, though these connections can be inconsistent.
Continuously monitor your progress
Once you implement your business strategy, monitor its progress by using key performance indicators (KPIs). These KPIs provide measurable benchmarks for your business and ensure that your strategy performs as it should within a designated time period.
KPIs for business development typically fall into the following categories:
- Revenue growth: Common KPIs include sales revenue, revenue growth rate, and new customer acquisitions.
- Pipeline management: Businesses may measure the number of leads generated, the lead conversion rate, and the average length of the sales cycle.
- Client relationships: These KPIs may include customer retention rates, a customer satisfaction score, and successful upsells/cross-sells.
- Market presence: Market share growth, new market penetration, and strategic partnership development all fall under market presence KPIs.
Revisit your business development strategy regularly, using your KPIs to drive any changes or adjustments.
Common business development pitfalls to avoid
Investing resources into business development can drive major growth, if the approach is well considered and executed correctly. Below are some common biz dev pitfalls and how to avoid them.
Ignoring the costs of business development
According to Birenboym, a common business development mistake is not considering the costs involved and burning through money.
“Even though to make money you have to spend money, there is still a lot of leakage … that needs to be overseen,” he said.
To avoid burning through capital, track your spending carefully and compare it against the contract value of your converted leads. If you’re not seeing a low return on investment, consider adjusting your approach.
Generating leads without nurturing them
While finding qualified leads is a key part of increasing sales, it’s equally important to nurture those leads so that when they’re ready to buy, they choose you. This process can take time — and pushing a lead to sales too early could result in losing the customer altogether. As your prospects move through the sales funnel, continue to build that relationship and share relevant, beneficial content so your business stays top of mind throughout their buying journey.
Failing to adjust your strategy over time
Focusing too narrowly on a singular business development approach can prevent you from seeing alternative views, new opportunities, or shifts in the market that necessitate a strategy adjustment. To avoid this tunnel vision, explore different approaches and channels in service of your long-term goals, and conduct regular research to stay up to date on industry and overall business trends.
Emily Heaslip, Sean Peek, and Miranda Fraraccio contributed to this article.
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