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Why You Are Wrong About The Differences Between Marketing and Business Development

We often see ourselves as marketers or business developers. In my experience, people see a clear distinction between those two things.

You’ve probably met marketers who just aren’t comfortable with business development and business developers who think that marketing just isn’t their thing.

There was a time when I believed I knew what the clear differences between marketing and business development were. But boy, was I wrong!

And if you have the beliefs I once held, you might be hindering your effectiveness (and maybe even your career).

Let me explain.

What I Thought A Business Developer Did

I believed business developers would go out and develop “relationships” with potential clients. These potential clients would have heard of your firm because marketers got your firm’s name in their head.

Then I believed the business developer would come back with an opportunity (usually in the form of a RFP) and some inside knowledge about the client’s needs.

The business developer would direct the marketers to create a persuasive document meant to convince the client to shortlist your firm.

Then the business developer would make a persuasive presentation to the client and win the job. Or maybe they’d coach their team to make this presentation.

I thought there were clear lines drawn. But I wasn’t looking close enough.

What’s Really Going On Here?

For this scenario to work, as I’ve described, several things have to fall into place.

Someone will have to:

  1. Identify potential clients (i.e. buyers).
  2. Learn about the client’s needs.
  3. Craft a customized message that persuades the client to choose you.
  4. Find ways to get in front of said client.
  5. Present your message (by different means) to the potential client.

In any other industry, this would all be marketing. Let me prove it. Say you were marketing a new body soap. Here’s what you’d have to do:

  1. Identify potential clients (i.e. buyers). Who is your market? Men ages 18-24? Women in their 40s?
  2. Figure out how to get in front of said clients with your message. What do they watch? What do they read? Where do they go to buy body soap? Where do they congregate?
  3. Learn about the client’s needs. What do these people desire? Young looking skin? A scent that drives the girls wild? To feel like a manly man?
  4. Craft a customized message that persuades the client to choose your product. What makes this new body soap the better choice than what’s already on the shelf?
  5. Present that message (by different means) to the potential client. See ads, commercials, product placement, mailings, meetings, calls, etc.

It’s All Marketing

Identifying potential clients, learning about their needs, crafting messages, determining the best avenue to reach clients, and presenting messages…this is all marketing.

And guess what…it’s all business development too!

The Real Fundamental Difference

My “official” title is “Manager, Business Development.” But what I do is the things identified in the previous paragraph.

Let’s say I set up a landing page (which I showed you exactly how to do). Then I send a cold email to a potential client who clicks on that landing page and signs up. She then recieves our regular blog posts in her email. She then contacts us with a problem we can solve. So I arrange a meeting between her, my principal, and me.

That’s one example how I’ve brought in new clients.

Was that business development or marketing? I think most people would describe that as marketing. You might even go one step further and call it a particular type of marketing known as lead generation.

Let’s turn that scenario on its head. I’m at an event where a potential client is speaking. Afterwards, I walk up to the client and provide a compelling reason they should meet with me and my principal for 15-minutes.

The meeting goes well. I follow up with a email that takes them to a landing page. They sign up, get the emails, and call us with a problem we can solve.

What about that scenario? Even though the only real difference is the order in which I actually speak (face to face) to the client, I believe most people would describe that as business development.

The only reasonable conclusion you could make is the fundamental difference between business development and marketing is attending an event.

Why That’s A Problem

In my years, I’ve met many unsuccessful business developers. And I’ve met many unsuccessful marketers.

The unsuccessful business developers think what they do is go to events and build rapport with people. They think, foolishly, that if someone likes your personality that’s enough reason for them to hire your firm. Unfortunately, that’s true in only the rarest of circumstances.

They completely ignore the research, messaging work, and focus needed for success. I’ve seen it over and over again.

Then there are the unsuccessful marketers. They’re all about logo love. Let’s give out trinkets with our logo, print t-shirts, and send newsletters about how great we are.

They completely ignore the objective, which is to convince real people to choose your firm to help them accomplish their objectives. Some might say these marketers are “ignorant of the bottom line.”

And that, my friends, is why so many business developers and marketers fail.

Choose Both

Here’s my advice. Don’t be “ just” a marketer or business developer. You need to be both. Whatever your title is, whatever your job description is…consider yourself in both roles.

That doesn’t mean you need to go to every local event and schmooze. And it doesn’t mean sitting at your desk all day strategizing.

But it does mean you have to ask what your clients’ challenges and objectives are, how can you craft a compelling message, and how best to deliver that message.

The True Distinction

It comes down to this. It’s the job of marketers and business developers to help people make the right decisions. And that’s true whether those decisions relate to body soap or building a school.

Sure, there are unethical marketers and business developers who profit from convincing people to make bad decisions. But there are unethical doctors, lawyers, and librarians as well.

If you concentrate on understanding people’s challenges and helping them make the right decisions…

…you can be good at and feel good about your role as a marketer and business developer.

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The Procurement Method That Actually Puts The Incumbent At A Disadvantage

Over the last year, particularly on federal contracts, I’ve been seeing the rise of a very disturbing procurement process. It’s “Brooks Act” compatible. It is a safe method for procurement professionals to use. And it actually puts the incumbent at a disadvantage. What is it?

It is called Lowest Price Technically Acceptable (LPTA for short).

Wait a minute, hasn’t this been around forever? Yes, it has. But, based on what I’m seeing, reading and hearing, the use of this procurement method has dramatically increased since 2013. And it’s now being used to procure everything from construction management, design, consulting, and even training services.

What Is The Lowest Price Technically Acceptable Process?

Here’s how this works (at least from what I’ve seen and been told). The buyer/procurement team identifies technical and qualification requirements that the proposers must meet. For example, they might ask for a project manager with a degree in civil engineering and 10 years experience managing federal construction projects.

Then it provides a scope and asks for a price.

Once you submit your proposal, it goes to a procurement officer. The procurement officer sends the lowest priced proposal to the decision maker(s). The decision maker(s) determines whether that proposal meets the technical and qualification requirements.

If it does, the contract is awarded. If it doesn’t, the decision maker(s) will receive the next lowest priced proposal. Rinse and repeat.

But here’s the kicker. After you win one of these procurements, your price will be communicated to everyone who proposed. And it is possible that you will never be told when your pricing was sent out or who it was sent to.

Therefore, when the contract is reprocured, the incumbent is at a direct disadvantage. Everybody knows their price. But they do not know who proposed on the previous contract and what the losing proposers’ pricing was. Nor do you know how many other firms met the technical requirements.

It would be basically insane for the incumbent to use the same pricing the next time around, since every single competitor knows it. So, the only strategy I know of is to price even lower and hope that you can again “out price” your competitors.

The Basic Flaw With That

Here’s the problem with that strategy. Let’s say you had the contract for three years. The people who worked on it, the people who meet the technical requirements, now cost you more. Theoretically, they did a good job and you gave them raises.

Now, you will have to pay more for them while charging less to the client. I’m no math or economics expert, but that just doesn’t seem like it’s sustainable for the incumbent.

Another Challenge With The Lowest Price Technically Acceptable Process

A key component of the success for any LPTA process is the correct identification of technical criteria. I have to imagine this can be a challenge.

For example, let’s say I’m using this method to procure a brain surgeon to perform surgery on me. What do I know about brain surgery? Nothing. I don’t know what separates a good brain surgeon from an incompetent brain surgeon. So, I have to pull technical criteria out of the air and hope (pray) that I got it right.

Think for a minute about how tough this is. I can require that the brain surgeon have a medical degree, spend 2 years studying under a brain surgeon, and have performed 10 similar brain surgeries. But think about it, the absolute worst brain surgeon in the world probably meets those criteria, right!?! If you don’t know what separates a good brain surgeon from a bad one, it’s essentially a shot in the dark coming up with technical criteria.

Why In The World Would Anyone Use That Procurement Method?

There are two scenarios where Lowest Price Technically Acceptable procurements make a lot of sense.

  1. Reducing the prices the government pays for services.
  2. Covering the procurement official’s butt.

What I think people who submit proposals sometimes don’t fully appreciate is that procurement officials who break the rules can be charged with a crime, like this guy or this lady. So, their decisions are often based on their interpretation of, sometimes nebulous, procurement laws and their tolerance for personal risk.

LPTA procurements are great for people who have no tolerance for personal risk because it takes all the qualitative factors out of the decision process. In a way, it takes all the judgment out of the decision. It’s also transparent because you provide everybody who proposed with the final price.

The Lowest Price Technically Acceptable Debate

In January of this year, David Cox, the president of the American Federation of Government Employees defended its use in Government Executive Magazine. He said, among other things, that contractors hate this process because it reduced their profits. That their “bowls of caviar are not quite as full.” He described it as part of the Pentagon’s “war on profits” and explained there is nothing wrong with trying to get the best price for tax payers.

You can imagine the responses to this. Eric Crusius, of Fed Nexus Law shared an opposing view stating that LPTA procurements have severe limitations, are often used when it shouldn’t be, and end up costing the government more. He said the LPTA is “simply a road leading to mediocrity.”

Then in March, the Department of Defense sent out a memo warning of the overuse of LPTA. So, at this point, it seems even the Feds are recognizing that LPTA’s use has exploded.

How This Affects You

Even if you don’t work in the federal market, rest assured that what happens in the federal market often finds a way to trickle down to the state and even local level. Just ask yourself whether you’ve filled out any SF330s for state and local agencies.

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