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- Business development versus sales. In this video, we're gonna talk about the difference between the two, how each of them work, and which one you should focus on in your business. (light music) What's going on, everybody? My name is Patrick Dang, and welcome to my channel, where we're gonna talk about modern sales strategies to turn total strangers into paying customers. Now, the first thing we've gotta do is, we've gotta define sales and business development, so let's go ahead and start with sales first. Now, for this particular video, I'm gonna be talking about B2B sales, business to business sales, and the definition we're gonna use for B2B sales is, it's basically a sales model where a business sells their product or service to another business, and this typically happens either over the phone, in person, or over email. Some important things to note about business to business sales is that it's usually more transactional, versus strategic, and we'll talk more about that in this video, and when you're doing B2B sales, usually, the product or service that you're selling doesn't really change. You have what you have, and somebody will buy it, and to generate more money off B2B sales, you either have to sell more of the same thing, renew a customer, or sell related products similar to the first thing that you sold. Now that you understand a general definition of business to business sales, I'm gonna give you a concrete example to help solidify your understanding. Now, one of my first sales roles that I ever had was actually a sales internship at a streetwear sales agency, so basically, there would be these big brands that would come to this agency and say, hey, agency, can you help get my products in stores, retail stores across America, right, so I was part of the sales agency, as an intern, and so, we worked with brands like M-Case, G-Shock, Marshall, Super Footwear, so all these different streetwear brands at the time, so basically, this is how it generally works, right? You have salespeople that work at this agency, so let's say you get one salesperson, so they might be in charge of one brand, or they might have multiple brands, depending on the situation, but let's say they have one brand, right? So one person might be a salesperson for the brand G-Shock, the G-Shock watches, and what they're gonna do is, in their assigned territory, right, it could be something like the West Coast, or certain states in America, they're in charge of finding out who would be the best fit to buy these products, so they might say, okay, let me reach out to all the surf shops in California to see if they wanna carry our watches. Let's hit up all the malls, or all the skate shops, right? So basically, this salesperson is doing anything they can to get in contact with all these different stores, from large retail chains, to mom and pop shops, and what they're gonna do as a salesperson is cold call, send cold emails, meet these people at trade shows, and meet with them in person, and try to sell the product there, and this is very straightforward sales example, right, you have a certain product, whether it's a watch, or clothing, or any type of product, or even service, as a matter of fact, and then, you go out to all these potential customers, and you see whether or not they want to buy your product or service. The product or service doesn't change. You have what you have, and if people buy it, they'll buy it. If they don't wanna buy it, it's okay, and if they wanna buy more over time, you either just renew the customer, and that's pretty much how that works, and from a sales example, if you want to generate more sales, typically, what's gonna happen is, you're gonna have to hire more salespeople, right, because if you're a salesperson, you can only talk to so many people in a day, and if you wanna start expanding, you're gonna need more people to do the same type of sales activity, and just start dominating your territory, so that's B2B sales. We're gonna put that into one bucket, and now, we're gonna talk about business development. Now, the definition of business development is essentially the process of developing growth opportunities and relationships with other organizations. How it's different from sales is that it's a lot more strategic versus transactional, and I'll talk more about that, and you're essentially developing opportunities for growth. It's not as if you're just selling something, and as many as possible. It's really more about building a partnership, and long-term relationship that benefits both sides, so let's go ahead and take a modern example, right, so recently, there's been some news that Yeezy, the brand by Kanye West, is doing a collaboration, multi-year deal with Gap, right, and for those of you who may not be familiar, Gap is a very large clothing manufacturer, and they have stores all over the U.S. and I believe all over the world, so how does business development come into play as these two different entities come together? Well, pretty much what's going on is that Gap, if you haven't noticed, the stock price of Gap has been declining, and Gap's brand and relevancy has been on the down. Now, Yeezy has been on the rise, so what's gonna happen is, Gap is a large company, right, they're doing a lot of numbers in terms of revenue, but then, they're declining in popularity, so they need this juice. They need to partner up with somebody that will co-sign them to make them cool or relevant again, right, and Yeezy, why they would do a partnership with Gap, right, even if Gap is not the coolest company, Gap is a legacy brand that can be turned around, right, so brands like, let's say, Champion, at one point, weren't cool, and then, they turned that thing around, and now, everybody's wearing Champion, so Gap is trying to do something similar by partnering up with Yeezy because Yeezy has the brand recognition, it has the cool factor, and it has good design right, so once you apply these non-tangible things into the infrastructure that is Gap, then, you have a powerful combination because you're gonna have the best designs, and you're gonna have this coolness and relevancy, and you're gonna have Gap's infrastructure, and their ability to produce clothing at scale at an affordable cost. Now, to make this deal happen, right, it sounds like a miracle deal, but to make it all happen, it's not as if Kanye West is just going to meet the Gap CEO, and saying, hey, we should do a partnership. It doesn't really work like that. How it typically happens is that Gap is gonna have a whole team of people dedicated to making this work, and Yeezy's gonna have a whole team of people, as well, also dedicated to trying to make this work, right? So when it comes to the business development side, you've gotta think about which side is reaching out to who first, right? Who's that first, initial contact? Who's sending that first email? How are you getting the first introduction to even start this conversation? That's all business development, and once you have your first couple of meetings, then, it comes to how are you gonna negotiate the deal, what are the terms, and how are each side going to work together to create the best quality product for the customer, right, and these conversations can literally take months, or even years before even one product is released to the public, so as you can see, it's very different from the regular B2B sales that I talked about in the first example because in B2B sales, it's, you have a product already. You're just going to all the stores, and you're saying, hey, you wanna buy it? Cool, how much? But then, when it comes to business development in the second example I'm talking about with Gap and Yeezy, it's not as if Yeezy and Kanye are just coming in and saying, hey, we've got a bunch of shirts. Can you put them in the Gap store? It doesn't work like that, right? That's not, that's very transactional. That's a sale, but we're talking about business development. That's when two entities work together to create a growth opportunity that's a win-win situation for both sides, and obviously, it's gonna take a lot longer, however, when you have two entities working together, you create something more special, and supposedly, it will be better for the customer. Now, once this product is created, and whatever clothing that they turn out is out and ready for the public, then, once they start selling it in the stores, and things like that, then, that's regular sales, but to make that all even happen, that's all business development, so when you're thinking about your business, and whether you should focus on B2B sales, or business development, you gotta think, well, what exactly is your product or service, and how do you bring value to other people? If you already have a product or service that's a commodity, doesn't really change that much, and you're just trying to get it into as many stores as possible, then obviously, B2B sales is the way to go, but if you have a product or service where you're really, deeply integrated in another person's company, and you work together to create something new, then that's gonna be business development, and why business development might be advantageous is that if you don't have a big sales team, and you just have a small group of people, or maybe you're just working by yourself, when you do business development, you can work with another company who has leverage, right? Maybe they already have an audience, so if you work with them, and you create a product or service, they can sell that product or service to all of their audience, so you only need maybe one, or a team of people to build that connection to reach a wider audience, whereas for B2B sales, it's more a numbers game where you have to just reach out to as many people as possible, whereas business development, it's reaching out to the right people that can really move the needle in your business. Now, depending on what you're selling, and what you wanna do, both strategies work. You can build huge companies using either strategy, but the more important part is understanding which one is gonna fit best for you and your customers that you're trying to serve. So that's it, and that's gonna be the difference between business development and sales. If you enjoyed this video, make sure to give it a like, subscribe, and turn on notifications. Let me know in the comments what's your number one challenge when it comes to either sales or business development so I can make a video for you guys, and help you out. Now, if you're interested in learning more about business development, I actually have another video where I go even more in depth on the business development topic. Make sure you click the link somewhere on the screen to get access to that now. So, with that said, my name is Patrick Dang. Thank you for watching. I appreciate all of you guys, and I'm gonna see you guys in the next one.