Customer or Business Development

Do you ever get asked this question:

what’s the difference between customer and business development? Aren’t they broadly the same thing?

My best short answer is somewhere along the lines of “Yes, lots of overlaps – no, completely different – and, it depends on the person”.

If we take a look at the job section at LinkedIn. How many jobs can you find for “Customer Development” UK? How many can you find for “Business Development”UK? I make it 15 vs 1072, but if you dig further and take a look at the individual specs for the 15…. I make it ‘0’ or there-a-bouts. Many of the CDM roles are for customer service managers or account management roles. You can do a similar exercise for the USA with a similar picture… ‘0’ vs ‘7000’. To sum up, it looks like there’s no explicit demand for customer development… but lots of demand for business development. So I can see the argument for ‘Yes, let’s say they’re broadly the same thing’. Let’s be pragmatic, if people see this as business development – go with the flow, it’s business development. That many people can’t be wrong?

Ok, let’s put that thought to one side. Come on, these are completely different processes! Business Development (BDM) and Customer Development (CDM) are two different disciplines. Look no further than the first line of an American job spec for a VP Customer Development –

Develop, monitor and execute business plan for assigned customer

There’s the problem. Here’s a role masquerading as customer development, but it’s about executing the business plan. Let’s play that through:

  • Day 1 – Read the business plan: the operational plan and the associated financial plan.
  • Day 2 onwards. Execute the plan. Build the organisation, manage the customers, cram the pipeline, nurture our ecosystem of partners and cash the checks.

Did we miss something? Yes, if it’s a startup department/business. You don’t have any customers. You don’t have a product. You definitely don’t have a product/market fit. The ecosystem of partners… couldn’t care less at this point… you are way down their priority list. All you have is a bunch of assumptions about those things. The job maybe a VP Business Development, Account Management or Sales. It’s (probably) not Customer Development.

There are differences:

  • CDM aims to build the business model, BDM want to scale the business model
  • CDM needs to find customers, BDM wants to build partnerships to round out the customer’s solution
  • CDM needs to define the simplest product that this unknown group of customers will want to buy, BDM wants to improve the core offering
  • I’m not sure if this is in St. Steve Blank’s gospel – but I’m pretty sure he describes CDM’s aim as “creating a plan for the plan”.

OK. Let’s say they are different roles for different points in the company’s evolution – aren’t the skill sets the same. Can’t a BDM (or Sales guy) learn these skill sets and just switch mode? (Search versus Execute mode).

Answer: It depends on the person. More helpfully, it depends on their skill set. Can they negotiate,   can they open doors, can they ‘position’, gather and prioritise requirements, use the canvass, have they relevant experiences… do they see the ‘planning’ problem? IMHO – I think that last point is key. The skill sets overlap, but if the BDM person doesn’t see the ‘problem’ of startup departments/businesses then they are unconsciously incompetent. To get the results they need, they need to be lucky or surrounded by others that pull them through. It’s possible that it will all work out fine when hiring that BDM guy for a CDM role. It’s just not probable.

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