As an inventor, startup or small business owner, the way you define your business development needs and terms plays an essential role in how you engage help and grow your business.
Why Do You Need to Define Terms First?
Because, if you don’t know how to describe what you need, it’s challenging to get the right help or for people to contribute effectively.
A Little Background
I’ve spent the last couple of years meeting business owners at networking groups. People would always ask me what I did. I would say a combination of commercialization, marketing, and business development.
As a way to make conversation, I would ask, “what do you think marketing, commercialization and business development mean?” I’d explain that everyone I’ve met has a different understanding of the terms and I was curious to hear their thoughts.
The Most Common Answers
I asked nearly 200 people the same questions. Here are the most common answers.
For What is Marketing, the most common answer by far was advertising. After that, it was a mix of websites, SEO, social media, or some other promotional tactic. Sometimes branding would come up too.
For Business Development, most people assumed some form of professional sales; as in drumming up new business. Occasionally, someone would suggest a focus on how to operate and scale a business.
For Commercialization, the most common response was not knowing what it means or that they don’t use that term.
How Would You Answer?
What do you think these terms mean? How would you ask for help?
There’s No Agreement on Anything
Did you know that even amongst industry professionals, there is little agreement on these terms? Even a basic question like, “What is Marketing?”, must be operationally defined. With all the assumptions and disagreement on terms, you must be careful not to assume understanding or agreement on anything.
Before jumping into definitions, let’s discuss why it matters.
Defining Wants Versus Requirements
When you ask for help, are you describing what you want or what you require?
Examples of Wants:
- A website
- A video
- Advertising, etc.
Examples of Requirements:
- A commercialization strategy
- Leads and sales to new clients
- Client retention and repeat sales
- ROI and earnings growth
What’s a Business Owner to Do?
If you’re not clear on your wants versus requirements, get some help clarifying them first. By defining your requirements, and your financial constraints before you start, it will help keep you on track. Constraints are things like your budget, timeline, profit margin and max cost of sale, etc.
How Do People Seek Help?
Most people look for help by asking a friend for a referral or they go to Google and type Marketing Companies or Advertising Agencies. Some will look for Marketing Consultants and fewer yet will look for Commercialization Companies.
Worse yet, people focus on their wants and go looking for tactical specialists. The specialists are often great at what they do, but they rarely confirm what you’re asking for is what you require versus what you want.
Definitions Are Important
This is where understanding the difference between terms is essential. If you know what’s required and can ask for the right type of help, your odds of success improve immensely. Let’s clarify some terms.
What is Commercialization?
Investopedia defines Commercialization as “the process of bringing new products or services to market. The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service.” Commercialization takes a big-picture or systematic view of the business development process. The focus is on pulling together a business system designed to produce economic outcomes.
What is Marketing?
Marketing is more complicated to define, as there is little agreement on its definition.
One of the definitions I like is from Wikipedia. They say “marketing is the study and management of exchange relationships. Marketing is the business process of creating relationships with and satisfying customers. With its focus on the customer, marketing is one of the premier components of business management.”
The emphasis is on the customer and the business processes that forge economic relationships.
What is Advertising?
Dictionary.com defines Advertising as “the act or practise of calling public attention to one’s product, service, need, etc., especially by paid announcements in newspapers and magazines, over radio or television, on billboards, etc.”
Advertising is an important facet of Marketing. Advertising is not marketing. We always look at advertising as the last step in a 20-step marketing process.
What is an Advertising Tactic?
A tactic is a specific form of advertising. There are dozens of different types. They include traditional advertising on TV and in print, out-of-home advertising such as billboards, signage, tradeshows, direct mail, online advertising, search engines, directory listings, social media, email campaigns, catalogues, videos and so on.
What is Business Development?
Investopedia sums up Business Development nicely with their definition: ”business development can be summarized as the ideas, initiatives and activities aimed towards making a business better. This includes increasing revenues, growth in terms of business expansion, increasing profitability by building strategic partnerships, and making strategic business decisions.” The emphasis is on creating long-term strategic value creation in the business.
The business development process includes strategy, sales, marketing and more.
The term New Business Development is where I think the confusion comes in. This term generally implies the act of going out and finding new customers, or the so-called outside salesperson or Rainmaker role.
What is Professional Sales?
Professional Sales or the position of Rainmaker, is a role people play within a business. The role involves developing trust relationships with a network of people, for the purpose of generating referrals, sales transactions and forging long-term business relationships. The sales role is often described as running a business within a business. This is because the sales professionals are often compensated for their performance rather than paid a salary.
So How Did You Do?
Did your definitions align with the ones presented? Good for you if they did. If not, you’re in good company. Hopefully, these definitions help you appreciate the important differences and how they might direct your search for suppliers.
What’s the Takeaway?
In the words of Stephen Covey, “Start with the End in Mind”. It’s important to approach marketing and business development from a requirements perspective. To learn how to ask for what you need and not to assume a common understanding of terms. For more details see our article on how to hire a marketing company.
Try to make clear to providers, you don’t care about tactics. What you care about are results. The ensuing results-focused conversation will be radically different than the tactical conversations that normally occur.
Why? Because few single tactics are capable of generating results on their own. To generate results, you need to look at your business development system as a whole and isolate the gaps preventing you from achieving results. You’ll also need to track your conversion rates at each significant stage in the process, and then expect to iterate to fine-tune system performance.
Where to Start?
To get you started, we’ve prepared a series of free marketing eBooks and a book called Mastering Marketing. Mastering Marketing breaks the business development process down into three phases and twenty logical steps. The goal is to help you get clear on needs and to approach marketing systematically. We’ve also prepared several articles to help you shift your approach away from random acts of marketing to a focus on earnings growth.