Glossary of Business Development Terms
Business development is still relatively new to the workforce and it continues to evolve over time. In this article, we’ve collected the most important terms that you need to know if you’re just breaking into BD and provide the most basic definition of each so that you can have a foundational understanding as you progress towards a deeper understanding of BD as a career.
Business development is still relatively new to the workforce and it continues to evolve over time. In this article, we’ve collected the most important terms that you need to know if you’re just breaking into BD and provide the most basic definition of each so that you can have a foundational understanding as you progress towards a deeper understanding of BD as a career. Before diving into these BD-related terms, let’s define what business development actually is. According to the Founder and CEO of Firneo, Scott Pollack, “Business Development is the creation of long-term value for an organization from customers, markets, and relationships.” This basic understanding of the BD function creates a lot of corresponding terms that you’ll need to know if you’re going to be successful. We will continually update this list as more terms become relevant throughout the industry. We’ve broken the terms up into two relevant categories below, basic BD terms and sales-related BD terms, to make it easier to digest and find what you’re looking for.
Basic Business Development Terms
Below are the most important terms to know when getting started in the world of business development. It should be noted that these terms are not in order of importance, but instead appear in alphabetical order.
Occurs when one business acquires assets or shares to take operational control of another business.
Business Development Director
A top operating executive in BD that oversees the strategic direction of all activity, as well as manages the operations of the team. This role is typically is responsible for direct management oversight of all people managers on the BD team.
All roles in the business development department who work to build partnerships and relationships and grow the overall business. Examples of these roles include Business Development Specialists, Business Development Managers, Business Development Directors, and Chief Partnership Officers.
Business Development Manager
Manages the execution of business development strategies through the direct supervision of individual contributors on the team. Also typically has a specific responsibility for growing partnerships or BD-specific relationships for some of the firm’s most lucrative or important opportunities.
Business Development Plan
A written set of steps a professional or team will take to accomplish the business development strategy. Most BD plans are accompanied by specific metrics or KPIs that the execution of the plan can be measured against.
Business Development Strategy
The combination of principles, roadmaps, or plans that direct the entire business development function at a particular business. The goal is to create a plan around specific opportunities that will generate high amounts of value and long-lasting revenue and create a structure for how the work will be completed.
The commercial value that derives from the perceptions people have in the marketplace of a particular brand name of a product or service instead of the actual value created by that product or service.
Business Development as Sales
Systematically generating immediate revenue through partnerships or strategies while being responsible for the entire customer sales cycle. This typically happens at smaller startups because of a lack of resources and the BD team members will focus on the whole sales cycle from finding to developing to closing potential customers and growing all current customers.
Often defined as the customer’s current location in their buyer’s journey. Overall buyer awareness is how well a customer understands what value your product or service can provide.
Providing knowledge to a potential customer that improves their buyer awareness and gets them closer to making a purchasing decision.
A series of choices or actions a buyer takes while researching a potential purchasing decision. The buyer’s journey is typically made up of three stages, which are awareness, consideration, and the decision.
A company or individual that offers products or services on behalf of your business.
Chief Partnerships Officer
The chief business development executive in a business who oversees all BD activities and is responsible for the company’s growth in businesses that grow primarily through partnership activity. These roles are typically only used in some of the larger companies and the responsibilities continue to evolve as the BD function itself evolves.
The number or percentage of customers who stop paying for your product or service during a specific time period.
Actively educating your potential customers and helping them go from exposure of your product or service to understanding and eventually a purchasing decision.
A single element test that is run with a specific purpose of determining if one factor impacts the end goal. Many businesses like to run small but fast experiments to get to the goal of matching up with the customer’s value proposition as quickly as possible.
Customer Acquisition Costs (CAC)
The cost of acquiring a new paying customer.
Customer Content Plan
A collection of articles, videos, podcasts, or other media that you can use to relate to your potential customers and build trust within the industry.
Customer Lifetime Value (CLV or LTV)
The total lifetime value of one customer by total revenue that you will receive, on average, before they churn.
Providing something useful to a customer who recognizes the worth of your actions.
Direct sales or relationship communication sent via email.
Fundamental economic drivers that collectively propel the business forward towards more revenue and customers. The growth engine is dependent on the business model and financial opportunities available to the business.
Industry or Market Analysis
Documented research of the current state of competitors, actions, and future plans of a particular industry or within a particular market.
A lasting stream of revenue that comes from partnerships, strategies, or other opportunities.
A BD strategy that positions the business to enter a new market and obtain new business. This strategy is often used when the current market has become saturated.
Numerical data used to determine the success or failure of a specific part of your business.
A back-and-forth discussion of specific terms between two parties with the intent to reach a mutually beneficial agreement.
Observing the Market
Watching a client, industry, or overall market to learn more about the actual problems potential customers face.
The process of introducing a new customer to your product or service and getting them ready to maximize the use of what you offer.
A relationship between two businesses or organizations that help boost overall growth for each party.
Specific key performance indicators that measure the success of your partnership.
Partnership Business Development
Teams focused on building partnerships that drive long-lasting business revenue.
A technological presentation that is used to pitch your product, service, or partnership opportunity to a potential customer or partner.
Product management is the process of driving the development, launch, and continual support of a company’s digital products. The product management role within an organization is tasked with the responsibility of a product’s overall success.
The application of specific knowledge, techniques, tools, and processes to achieve specific objectives. The goal of project management is to oversee the execution of delivering value to a customer, group of people, or business.
Contacting leads in an effort to spark an interest in your product or service, or in a specific partnership.
The first version of a product, strategy, or partnership that is used to determine the probability of success when it is deployed to customers.
The method of generating new leads or partners through a third party recommendation.
Connections based on trust or respect that can be built, managed, and leveraged to create a mutual value.
Return on Investment (ROI)
A performance measurement used to evaluate the financial profitability of an investment of resources. ROI is calculated by dividing the benefit of the investment (i.e. the revenue received) by the total cost of the investment.
A strategic plan that defines a desired outcome and lists out the milestones to achieve the end result. Roadmaps are typically in written form and measured by specific metrics.
Scalable Partner Process
An executed plan with an outside partner that can be done over and over again because the return on investment increases each time it is completed. Typically, the ROI is either the compounded from the same result each time it is completed or the ROI per completion increases each time.
A market entry strategy where multiple markets are entered simultaneously to diversify potential outcomes.
Strategic Business Development
Oversight for the alignment of business development processes and procedures with the strategic goals of the business. Strategic business development is much more about coming up with plans and processes to grow revenue instead of looking for ways to find new outside partnerships.
A relationship between two businesses or organizations to work together in order to benefit both parties.
A written guide to execute business development strategies off of milestones to meet in order to hit a final objective, similar to a roadmap.
Specific strategies or actions a BD professional takes to improve traction with building a partnership or growth program internally.
A specific geographic location or demographic that groups potential customers into a similar classification. These markets are used to sell products or services.
Tools for BD Professionals
Refers to software, templates, scripts, or other forms of technology that enables a BD professional to work more effectively or efficiently.
A promise of value that you plan on delivering which you communicate to your customers or potential customers.
A market entry strategy where you enter one market at a time, learn from that market, and then use that knowledge to enter the next market.
A market entry strategy where you enter multiple markets at the same time but the number is limited and selectively chosen.
Business Development and Sales are not the same things, but they do have some terms that overlap or that you’ll need to understand as you interact with your internal sales team. We’ve listed these important sales terms below.
A role that is in charge of closing deals or turning qualified leads into paying customers.
Contacting prospective customers to arrange a time to discuss a potential partnership or for a sales meeting.
A team or role that focuses on different sales channels and not just a single one. For example, a channel sales professional could be selling to dealers and in-house teams at the same time.
Actions that a sales team takes to persuade a customer to make a purchase or commitment.
Reaching out to businesses or individuals without an existing relationship with the intent to make them a customer or partner.
Customer Relationship Management (CRM)
A software or tool that helps businesses track and manage its sales pipeline, each individual prospect, and other activities throughout the sales cycle.
The individual within a business who has the authority to make a purchase or partnership decision.
Activity within the sales cycle that occurs as a result of a potential customer directly approaching or engaging with your business.
Individuals who can impact the decision of a sale within a business but don’t have the authority to make the final decision.
The process of generating interest around a product or service through any method.
A collection of like-minded individuals that meet regularly with the intent of passing referrals to one another.
Qualified leads that are potentially a good fit for your solution based on your predetermined benchmarks.
Cold calling or warm calling with the intention of converting leads into sales without the prospects showing interest in your business,service, or product offering.
A visual representation of the stages a prospect goes through, and where each is currently at, during the sales cycle.
Unique Selling Proposition (USP)
The defining reason(s) that give your business a competitive advantage in the marketplace.
Sales Development Representative (SDR)
Role on a sales team that is focused on initial contact and appointment-setting.
Stages of the sales process that a potential customer goes through from initial contact to closed transaction.
An event that showcases the product or service that a company is selling to prospective customers.
A business development strategy that uses both inbound and outbound efforts to acquire new customers for the business.
Senior-level executive that oversees the operations of an entire sales team. Typical responsibilities include formulating strategies, managing team managers, setting the department budget, and is accountable for overall sales growth.
Leader of a team of sales professionals who is responsible for the growth and development of every person on the team.
Reaching out to individuals with whom you’ve had prior communication with but haven’t engaged in lengthy sales conversations.
Understanding these terms, or using these as a reference point, should make it easier to interact with BD teams and familiarize yourself with the work you’ll be completing. We will continue to add to this list as new terms become relevant to the daily work of business development professionals. Check out our other articles on the basics of business development to learn more about how you can obtain a BD role and succeed in this growing field. If you have something to add to this list, we’d love to hear from you.
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