Your Business Development Team — Wise Investment or Money Pit?

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Oct 13, 2011

The sales team is the primary revenue source for most businesses. However, this revenue is not without significant cost. If not carefully managed, this revenue source can easily become a money pit. There are five areas business executives should watch to ensure they make a wise investment in their sales team.


In most organizations, if a new idea is proposed that will cost $20,000 to implement, blue ribbon panels are commissioned, meetings are held and a decision is ultimately made. After all, the company is considering a significant investment, which requires careful consideration.

However, when a company is hiring a business development person at a salary of $20,000, there isn’t nearly the same level of due diligence performed. Yet, it’s the same $20,000! In essence, the worst mistake a company can make is to hire business developers. Adding headcount to a business development team should be viewed as an investment made in revenue. Recognizing that this is an investment is a critical first step toward driving sales team profitability.

As executives evaluate candidates, there is a perception that they can hire great sales people. Unfortunately, there are no great sales people. They don’t exist! The issue is the word “great.” Greatness isn’t a stand-alone quality, but rather an attribute of the relationship between the sales person and the business development role in your company. Don’t believe it? How many people have you hired – great resume, fantastic track record, polished appearance – who have failed in your company?

If you believe that there is this entity called “great sales person,” you must also agree to one of the two of the following statements:

“When the sales person arrived at my company, she completely forgot how to sell.”

“Our company and our clients are the absolute worst to sell for in the history of business.”

After all, what other choices could there be if this person is truly a great seller? Companies with highly profitable sales teams don’t search for great business development people. Their quest is to find the right people who have the potential to be great in their role. While this may seem subtle, its impact is not.

This quest begins with the development of a highly-detailed, ideal business developer profile which identifies every factor that affects a seller’s ability to succeed in the role. Once created, a sales talent screening program is put in place that allows them to compare and contrast the candidates with this profile. With that in place, instead of looking across the desk wondering if this person is a “great seller,” potential investors (which are what the management team becomes when adopting this philosophy) are looking for synergy – or lack thereof – between the candidate and the profile.


Many business owners believe that once they’ve hired a business developer, the hard work is over. And, why shouldn’t they believe that? They’ve just hired a great sales person! Hand the new sellers a phone book and send them off to sell.

Highly profitable companies recognize the real work is only about to begin when a new seller investment is made … for both the new business developer and the company. This work comes in the form of an onboarding program. Onboarding is commonly seen as completing new hire paperwork and getting the office ready to go. While administrative work needs to be done, it does nothing to protect the new investment or ensure a healthy return.

During the recruiting process, the sales talent screening program helped the investors make an informed decision prior to extending an offer to the candidate. Now, the new seller arrives at the company with potential, but a program is needed to ensure the potential becomes reality – in as little time as possible. After all, every minute that the seller is on the bench, not yet ready to sell for the company, she is merely a cost on the books.

The starting point in the development of a sales person onboarding program is the end. In other words, without identifying the program objectives, it’s impossible to create an effective onboarding program. The investors need to clearly identify the finish line for the onboarding program based on expectations they have of those new sellers who successfully complete it. Those expectations are identified in the context of KNOW-DO-USE.

What do they KNOW?

KNOW refers to information like product knowledge and territory analysis.

What can they DO?

DO refers to actions like conducting sales calls or delivering a client presentation.

What can they USE?

USE refers to tools or systems like a CRM, ATS, or back-office utility.

KNOW-DO-USE provides the framework to identify the finish line for onboarding. With that, the sales person onboarding program is then designed to lead the new sellers to this finish line and should conclude with testing and assessment. After all, investors want visibility into the performance of their investments. Completion of an onboarding program is one of the milestones providing that visibility. Testing can come in the form of written exams, practicals and mock sales calls.

If the new seller is not able to demonstrate proficiency based on what the investors have documented as their expectations of someone who has successfully completed the onboarding program, it’s an opportunity to protect the company by ending the investment early.


There is an age-old debate on micro- versus macro-management. Micro-management is often defined as constant, in your face management. Macro-management is aligned with the French laissez-faire philosophy of leave them alone. The debate seems to be limited to these two extremes. Yet, top performing companies cast this debate aside and take on a different philosophy.

Hiring and onboarding are seen through the lens of an investment in revenue. Managing the business developers falls in line with the investment philosophy as well. Each person on the team represents an investment made on behalf the company. When investors consider opportunities, they look for a well-developed business plan. This is the same philosophy highly-profitable sales teams have in place to ensure there is a strong return on investment.

The investor team develops a sales business plan template which is structured in a “wizard-format.” The plan is designed so that the investors can get a high level of confidence in the strategy, tactics, and measures for each business developer. Once the plan is completed by the sellers, an investor call or meeting is held during which the sellers present the plan for acceptance. During the meeting, the investor team asks questions to instill confidence in their investment decision. Once accepted, periodic meetings are held to update the investor team on sales business plan implementation progress.

Rather than argue micro-management or macro-management, these companies have a management structure in place that positions them for a high return on their business development team investment. Those sellers that perform well receive additional investment (time, dollars, resources, etc.). Those that don’t, they find their business ventures no longer funded.


There is no end to the data associated with sales and it’s easy to get lost in it. Worse yet, it’s common for executives to focus on the wrong data points. Companies that recognize that the sales team is a revenue investment develop their sales metric management system designed to help them analyze performance.

Many start their system with “revenue” identified as their first metric. Yet, revenue is not a metric. It’s a result of the right metrics being delivered upon by the business development team with the right frequency. Companies can’t affect revenue, but they can affect the behaviors that lead to it. The investor team identifies a series of metrics that indicate that the business is on track. There are four criteria for each metric that is to be included in a sales metric management system:

  1. Measureable. It is easily quantifiable as opposed to merely gut-feel.
  2. Meaningful. The data point indicates something of importance to the business and seller performance.
  3. Trainable. If a seller is deficient in this area, training can be provided to improve performance.
  4. Goal-oriented. As it is measurable and meaningful, a driver is needed to ensure it is achieved.

With a sales metric management system in place, the investors have the ability to monitor the investment and take swift action.


“You’re only as good as your last sale;” or in the recruiting world, your last placement. This is one of the worst expressions ever uttered as it conflicts with how businesses are measured. Wall Street looks at tomorrow much more than yesterday. And, it is this expression that leads companies to develop flawed compensation strategies.

Traditional thought is that sellers are paid an incentive over their salary because they sold something yesterday. Profit-focused companies pay an incentive to get more sales in the future. Their focus is on growing a healthy sales pipeline in addition to winning accounts. When companies pay for yesterday’s news, their performance chart resembles an EKG.

The common starting point when developing a sales compensation plan is to ask, “How much do we want our sellers to make if they achieve plan?” While this is an important question, it should not serve as the foundation for the compensation plan. Since paying dollars beyond salary is a further investment made by the company, the foundational question to be asked is:

“By paying an incentive (bonus, commission, etc.) to our sellers, how will that help us get more of the sales we want in the future?”

The answer to that question helps to guide the development of a sales compensation plan that not only rewards for yesterday’s results, but for a healthy sales pipeline as well.

Each of these five areas has a major impact in the profitability of your business development team. While it may seem like a large undertaking, the result of transitioning your team to a revenue investment philosophy is exactly what your company’s bottom-line needs.

Lee’s eBook, Sales Person Onboarding Best Practices, was recently published and is available FREE for a limited time. You can access your copy by clicking on this link.

image source: Patrick Hoesly

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