Part 3! Sales≠BD≠Partnerships
What each function has in common and how to maximize client value
I keep bumping into a refrain from my Partnership Leaders colleagues who believe the first step in maximizing value with clients is creating proper alignment of goals between yourself and your client. I don’t disagree. After all, good partnerships are win/win and that can’t happen if one side wants something different than the other. But therein lies the problem. A salesperson wants something different than a BD person, who wants something different than a partnerships person. I believe that in a properly staffed organization, these are 3 distinct job functions. Given the different desired outcomes from each role, it’s understandable that some may confuse what to expect from a client or partner.
I have two objectives here: First, to define the unique attributes I see in each job function. And second, to highlight how to align goals towards each function’s target to maximize value in each case.
Let’s start with Sales. It’s the easiest to define and certainly the most common of the three functions. Sales is transactional. A salesperson takes money from a client and in exchange provides a product or a service. It’s a one time deal. It may renew or recur. But in its essence, it is a single transaction. Examples of Sales outcomes are Insertion Orders or Purchase Orders. Sellers are quota based, look for short sales cycles and focus on a KPI of revenue growth.
Not too far away is the world of Business Development. It’s in the same family of job functions but true BD requires a different skill set. It’s a pet peeve of mine that these two titles are used interchangeable and at small start ups I understand why. But done right, BD is a different animal. If Sales is going on a single date, then BD is in a long term relationship but with the same result. The outcome of a BD deal could be an annual SaaS deal, an engagement with an agency, or a license product partnership with a vendor. In all cases the “deal” is long term, revenue based, and often closed based on the BD person’s skills and less on the deal terms which dominate close rates on Sales deals. With BD deals, the client buys You and not necessarily your product.
A kissing cousin to Business Development is Partnerships. The quintessential way to look at Partnerships is as the ongoing relationship between two companies in business together. Money is important but the value of the Partnership can often be measured with other KPIs like access to a new inventory source, use of a new product feature or some other indirect revenue generator. Partnership deal cycles can also be long. They are often consummated in part to a strong relationship between the parties and again, less due to deal terms (although price and other key terms are alway important no matter who’s involved).
To illustrate the 3 differences, let’s look at how Zynga may work with all these distinct functions.
A sales deal would be a 1-off IO with an ad network to run a month long marketing campaign. A BD deal would be an engagement with an attribution or marketing analytics platform (e.g. Appsflyer, Adjust, or Singular)used by Zynga for install attribution or analytics. A partnership would be between Zynga and a social network (e.g. Facebook) for equitable deal terms (e.g. reduced fee rates) that provides ongoing access to the platform on which Zynga’s games can be played.
I recognize there is overlap sometimes so let’s look at this in a chart:
TL;DR is that these are unique job roles with distinct outcomes that nevertheless get used interchangeably. So it’s no wonder that alignment between a client side partner and a Seller/BD/Partnerships person gets tilted. Each party wants something unique from their respective client. How can this be resolved? Three ways: 1)Transparency, 2)Avoid unnecessary deal terms, and 3) Make an effort to understand your client’s KPI.
Transparency sounds easy but it’s not. Too often we open with deal terms that build in padding and “room to negotiate” so that our first offer is immediately rejected which inevitably sets everyone down the wrong path. I’m not suggesting to open with your best offer, but don’t demand everything you may want at the open. Once you are in the deal ballpark (AKA the “deal zone”) I think its OK to tip your cards a little and ask your client where he/she wants to end up on price, rate, or key deal terms. I believe in the quick close and extended negotiations may yield a few extra points but often at the cost of delayed launch dates and bruised relationships.
Avoiding unnecessary deal terms also seems like a no-brainer but here again I see a tendency to ask for things that are out of scope or just not core to the deal at hand. Do you really need to get pre-cleared press release rights on a simple sales deal? Do I need to pre-approval to use your logo? Must I make termination always one sided when I know you’ll ask for it to be mutual? If a deal is a good for both sides, then none of this matters because the request for these issues will be an easy Yes. If the deal is bad for either or both sides, none of this matters either because you’ll never realize those ancillary issues you fought for. Just bring good value to the other.
Finally, and perhaps most important, learn your client’s goals. Do they need what you are selling? What are their product requirements and how can you map backwards towards them? If you just need to sell to hit a quota, good luck to you because no one will want to buy. If you are looking to a partner to pay for a product that was designed without client feedback, then what do you expect? If you aren’t listening to your potential partners, then none of this will work. But once you are transparent, straight forward on deal terms and honest about marrying partner goals to your own, then the deals come easy (~ish).
To wrap up, I’ve combined two related notions into one business lesson that took me years to learn. Sales does not equal business development which does not equal partnerships. Separating these 3 functions with a focused outcome liberates the person in the role. It also helps to explain why a target may be missed — because the yard stick used to measure success was not necessarily the right one.
Let me know what you think. Agree/disagree/something to add?
How can I help?
