Should Business Development Report to Sales? [Part 2 of 4]

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You have validated your products, proven your markets, established your vision and formulated a plan for scaling your success.Screen Shot 2015-04-30 at 1.25.04 PM

At the expansion stage, many B2B companies, however, have still not figured out the best way to drive the volume of high-quality leads they need to execute on their plans.

The solution is to establish a business development team, known in some organizations as sales development.

The question is how to successfully manage it?

In the first post of this three-part series, we examined the pros and cons of having your business development team report up through the marketing department to the head of demand gen.

Today, we will consider the advantages and disadvantages of housing your business development team in the sales function of your organization.

Business development value

When structured and led effectively, your business development team can speed up the sales process, lower sales costs, increase brand visibility, identify crucial market intelligence and deliver high-quality, qualified leads to your sales staff.

The Bridge Group Inc. found, on average, 45% of company revenues are sourced by the business development function. For SaaS companies, the numbers are often closer to 63%.

Here are some of the pros and cons of having business development report to sales:


Strong sales and prospecting skills

When a tight connection between the sales team and the business development team exists, the sales skills of the development team are inherently strengthened.

Skills such as value selling, overcoming objections, and pipeline management can significantly increase as business development reps work closely with sales and learn the tricks of the trade.

Prospecting skills for business development reps can improve with this structure but they can also decline.  Much of this depends on the style of the business development team leader.

Clear path for sales development reps

Most business development reps are future salespeople — not future marketing pros.

When business development reps report to sales, their career path is better aligned.

Reps can look directly to anchor points within the company for growth, and this has some implications for lessening companywide turnover.

However, in this model you will always lose your best business development reps to the sales team.

By cherry-picking your own talent, you run the risk of managing a business development team with little, to no, experience.

Data-driven hiring assessments can help you identify which candidates are more naturally suited for business development and which ones are more likely to succeed as closers, which is helpful in the pre-hire as well as the promotional process.

More seamless hand-off

With business development reporting directly to sales, the lead hand-off between the business development team and the inside or outside sales team is often more seamless than it is when the business development team is housed in marketing.

This is especially true in an enterprise sales model where the hand-off is almost nonexistent as business development reps are constantly working with inside sales or field reps to more deeply connect with customers or find new and better contacts.

A word of warning, though: When the sales team dominates this hand-off, it can create an improper balance of power that often leads to trouble.

The two functions are supposed to provide a check and balance for each other, but if sales is given too much power they will start to show up late to appointments, pick and choose which accounts they accept and do not accept, and turn BDR reps in to sales assistants.

If sales account executives ever start to feel like they “own”  business development reps and the work they do, watch out.


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Weak response times and follow-up activity

The primary focus of the sales culture is to close deals, which means that inbound activity often becomes less prioritized.

If reps find themselves spending a lot of extra time researching and qualifying leads, or staying on calls and assisting sales reps they cannot prioritize inbound demand generation so those leads often don’t’ receive the focus they should.

Campaign language is poorly used

When structured separately from the marketing department, the business development team is not as integrated in marketing campaigns. Consequently, they are less familiar with campaign language and connections that would aid them in their calls.

This is most often where we see “bucket calling.” Reps take every lead source and treat them as if they are the same. By doing so, reps lose the context that is so important to build rapport with prospects.

Too much focus on sales

When the business development team is housed within the sales function, the reps’ focus becomes centralized to closing deals, rather than developing new opportunities.

This focus is so strong in some companies that the opportunity is often “sold twice.”

The business development rep qualifies, closes, and then hands the deal over to the inside sales rep who again qualifies  and closes. This defeats the purpose of specialization.

Structure that works for you

One can easily argue that the industry trend at the moment is weighted in favor of housing the business development team within the sales function.

Data from The Bridge Group shows that 73% of business development reps report up to the VP of sales.

And while I agree that often sales is the best place for the business development team, it’s important to consider your company and your unique needs.

I’ve worked with some companies where it was best to have the lead response reps report to marketing and the outbound sales development reps to report to sales.

There is, additionally, argument to be made that business development should govern itself — not reporting into either sales or marketing, but being managed by its own business development leader who eventually rolls up to the chief revenue officer or the chief operations officer.

The merits of this option will be explored in the third and final part of this series:

5 Reasons Your Business Development Team Should Stand Alone.

In the meantime, see the whitepaper below for 12 high-velocity metrics to accelerate your sales, and subscribe to The Sales Insider so you don’t miss the final post in this series.

The series in its entirety can be viewed here:

Should Business Development Report to Marketing? [Part 1 of 4]

Should Your Business Development Team Stand Alone? [Part 3 of 4]

Where Business Development Belongs in Your Organization? [Part 4 of 4] 

12 High Velocity Sales Metrics That Actually Increase Results

Free Cheat Sheet: 12 High Velocity Metrics

Learn the 12 sales metrics that every inside sales team should measure to increase results.

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