Are you being paid for Business Development or sales?

I recently had a conversation with a friend who just took a business development job. She wanted to compare notes and hear some assurances that this was a good move for her. Starting with the requisite exchange of business cards, she pointed out that her new title was “business development.” We are fighting the same fight, I thought.

I asked her a question that had implications far beyond what I had intended. “How are you compensated?” Her answer did not surprise me, but it became instantly apparent where the disconnect was. “I’m getting a base of $…, some house accounts and rest in commission…” What became immediately clear is that regardless of her title she was being paid as a sales person, not as a business development person, and both are necessary for a healthy pipeline.

The problem here is that the best business development person in the world can fail in this scenario. The amount of time pursuing and closing deals is where a salesperson needs to live, while the business development professional is spending their time with a long term investment in building relationships and future opportunities – not exclusively closing deals. For this role they are paid a larger base with minimal, if any, commission.

In order to clarify and move towards a solution, let’s apply the Pareto Principle, or the 80/20 rule. Salespeople may spend 80% of the time finding and closing deals with 20% of the time developing long term relationships. Business development professionals spend 80% of their time developing and nurturing relationships and 20% of the time looking for a faster path to a new project or deal. Both are necessary and accomplished seamlessly by most business owners, not hired staffers who are concerned with the structure of their compensation package and living up to a performance review.

Bottom line, at the end of the year my friend will not be happy because most likely she only brought home a modest base salary for all of her work. The employer is equally unhappy, having spent $ and not understanding or appreciating the value that was received. The solution begins when communication is clear and responsibilities are agreed upon. The most important component of all is that you must agree on what success is, without that definition all the conversations and job descriptions are meaningless!

Gary Anzalone