How product managers can learn to work with sales and business development

Originally published with podcast at https://shawli.substack.com/p/how-product-managers-can-learn-to-dad

As a product manager (PM) working in a B2B company, you’re interacting with sales and business development (BD). Yet many PMs don’t understand how sales and BD work. Some PMs describe sales as “spammy”. As for BD, what’s the difference from sales? To build a better working relationship with sales and BD, you have to understand how sales and BD people work so let me shed some light.

What’s sales and business development?

Sales is the activity directly focused on selling goods or services today. Let’s break it down.

  • “directly focused” -> The goal in sales is to convince you to buy. Prerequisite activities such as creating sales/marketing materials or determining pricing, while important in enabling a sale, isn’t the act of selling. Sales is selling.
  • “goods or services today” -> The current product, without changes. This isn’t figuring out what to build or how to change a product to make a sale. It’s about right now.

Business development is the activity of identifying and defining who and how you will sell in the future. Let’s break this down.

  • “future” -> BD is future oriented compared to sales. What are possible changes to product, marketing, and/or sales so you can sell in the future?
  • “who and how” -> Who are these external parties and how will we build a relationship with them for this envisioned future?
  • “identifying and defining” -> What projects need to be created with the external and internal parties to realize this future?

Jake Schonberger, former BD at FB said it best, “Sales is selling whereas BD looks at the larger picture [where external companies intersect product, marketing and sales].”

So while sales and business development are related because both focus on generating revenue, they differ in the timeframe and the tools to achieve this goal. Sales is focused on the now, convincing a buyer to exchanging cash for the current product/services. BD is focused on the future, identifying what’s possible, and gathering various people to build this future.

Practical Advice When Working with Sales

  1. Understand the sales stages and adjust your behavior accordingly. All sales people learn about sales stages. As a PM, if you understand them, you can adjust your behavior depending on the client and stage.
  • Prospecting / sales development stage: This stage, sales is focused on identifying potential buyers. Remember the persona you created from those customer interviews? A sales person uses the information for searches on LinkedIn Sales Navigator (e.g., by key words, demographics, job title, etc.) The goal is to identify a pool of potential buyers for the next stage: outreach. As a PM, you can help by translating the personas into quantifiable search criteria (e.g., recall that persona pain point doesn’t equal demographics). For PMs familiar in B2C, sales in this stage is similar to performance marketers who focus on marketing segmentation.
  • Outreach stage: Here, sales uses the information gathered in prospecting to write cold emails, make phones calls, or other outreach events (e.g., webinars, workshops, talks, etc.). It’s a balance between quality and quantity of outreach. Most sales folks use tools to track outreach (i.e., Streak, Salesforce, etc.), but PMs can make outreach more effective or efficient. One low cost method is to look through your own network for possible warm introductions to prospects. Another method is to A/B test different outreach methods or copy. Finally, seeking feedback from sales to refine the prospecting search criteria is helpful because translating personas to segments is usually imprecise and require tweaking.
  • Pitching stage: At this stage, sales goal is to persuade the individual(s) who responded to the outreach to choose your product or service. Depending on the complexity of the product or service, this likely involves persuading multiple individuals. PMs can best help in stage this by providing the “expert” voice. Jake, former BD @ FB said, “Even if I know the answer, I bring my cross-functional [product] expert because it’s more persuasive to my clients if the information comes from them.” For PMs, these pitch meetings can feel boring and inefficient (i.e., you’ve got so many other pressing issues on your plate rather than sit through a pitch to answer one basic questions). A tip here is to attend, but for shorter periods of time by coordinating with sales (e.g., 15 minutes at the end for Q&A). You can provide the needed “expert” voice, without sitting through a product demo.
  • Closing stage: Success! The buyer agreed to buy your product. But this isn’t the end for sales. Instead, it’s the the start of negotiations, contracting, and payment collection. Furthermore, there’s also work in “closing losers”, those potential buyers who didn’t move beyond the pitch. PMs can help sales in this stage in two ways. First, PMs should review contracts to ensure it adheres to the product value promise. This doesn’t mean you have to read the entire contract word for word. Instead, read the “deliverable” section to ensure the product can deliver the promise to the buyer. We’ll cover new product development contracts in BD, but sales should be focused on selling the current product and service, not making a bunch of changes to the product before delivering value. Secondly, because no sales person likes “losing a potential buyer”, PMs should create an recurring meeting (e.g., quarterly) for sales folks to share and vent about “lost deals”. This is a great way to build relationships with sales and learn from potential customers. Think of this as “ retrospective “ for sales without the terminology. The meeting isn’t a call to “immediate action/change”, but an opportunity to listen. A experienced sales person knows some clients don’t move forward because of buyer specific situations (e.g., timing not right, change in priority, change in people, lack of budget) and not the product. However, the same experienced sales person can also point out consistent issues in the pitching stage that’s causing buyers to stop (i.e., unconvinced). This should be assessed and addressed.
  • Post-Closing / Renewal: For many sales folks, the 1st sale is just the beginning. Contracts have duration so the renewals clock starts immediately. This means delivering on the product and service promise is important (see point above re: PMs need to ensure contract/product can deliver value promise.) PMs can help in the post-closing stage by staying candid and in periodic contact with sales. Candid means informing your sales person about outages, product issues, or enhancements, such as via release notes. Periodic contact means keeping scheduling separate meetings for reviewing existing clients relationships status vs. prospects. By keeping sales informed, you enable the sales person to do her job. No sales person likes to get a call about a problem from their client and be caught off guard.
  1. Recognize that being “likeable” matters. Technical PMs early in their careers often focus on tactics and execution. I’m guilty of this. If we could only figure out a way to make a product 10x better at solving the pain points, buyers will come flocking. While 10x better is fantastic, many products and features are only 1x — 3x better than existing solutions and that’s a pretty good outcome. Coupled with the pain of switching, even a 3x better product may not be worth the hassle for a buyer to change. That’s why sales folks spend energy trying to be “likeable” because “likeability helps sell”. I’ve personally made buying decisions for products when baseline features are comparable among vendors because one sales person was more friendly and kind. So while some PMs may dislike the small chitchats and “faked” personal interests during client meetings, it’s because you simply haven’t seen the great sales people who do the same, but are genuine at building “likability”.
  2. Monetary incentives drive sales behaviors. Sales people are paid from a base + commission. This structure drives different behaviors than PMs. Imagine your pay is dependent on getting a customer to buy? This is one reason why it literally is painful when a sales person “loses a sale.” PMs can help by understanding the sales person’s pipeline, sales quota/targets, and compensation timeframes, which helps you understand why a sales person is pushing to close a particular deal. You can then have a more productive conversation (e.g., “I believe you’re trying to close these 5 deals by end of this month, to hit the sales quota. However, I only have time to help with two because of my other responsibilities. Which of these do you think has the highest probability of closing where I can help?”).
  3. Don’t cut sales out when communicating to clients. PMs sometimes frustrate sales by talking directly to clients without sales’ awareness. Perhaps it seemed more efficient because sales was busy. Perhaps you wanted unfiltered feedback and have experience running customer interviews. Whether intentional or not, this act leaves sales people with a bad taste. The analogy is, sales talking directly to engineering or design without your awareness. It’s not the “direct communication” that’s problematic, but being “cut out” and unaware of the communication. However, this problem is easy to solve. Candidly share why you want to talk directly to a client with sales. Pick a low risk conversation topic and invite sales to join. This way, you build both credibility with the client and sales before you pursue more independence.
  4. When things do wrong, let sales communicate the good news. Invariably, things go wrong and clients are pissed. During the investigation stage, you might need to communicate directly with clients. (Remember, keep sales in the loop.) once you’ve resolved the immediate issue (e.g., no more outage) and have a plan for remediation (i.e., writing a patch to fix some data errors), you should communicate this good news to sales so they can communicate to the client. Be direct and tell your sales person you’re asking them to communicate the good news to help further a relationship with a client.

Practical Advice When Working with BD

  1. Understand BD’s focus area. It’s easy to get lost when working with BD because BD is focused on the future and BD intersects product, marketing, and sales. Thus, start a conversation with BD to define it’s focus area. For example:
  • BD focused on product: new products/services, major changes to existing product/services, “platforming”. BD’s focus on product is a method to drive future growth and revenue. Typically, the vision is a major change to the product to unblock a partnership opportunity. Some examples:
  • BD enabling marketing: co-marketing, referrals. BD is focused on expanding upon the marketing role. Examples:
  • BD enabling sales: new markets, new customer segments, new channels (B2B2C). BD is focused on kick starting and developing a repeatable process for new sales. Examples
  1. When BD is focused on product, align on the vision. Sometimes, PM will feel BD is doing a PM’s job when BD is focused on product. Specifically, it’ll feel like BD is performing some parts of product discovery. This is because they are. By talking to external parties (e.g., partners, customers, suppliers, etc.), BD is broadly interviewing and identifying opportunities to solve pain points. Thus, when BD focuses on product, it’s critical to talk with the BD person to determine where there is and isn’t alignment on product vision. Recall, that BD is future focused. During the conversation, discuss what are the risks/fears and how to validate/overcome them. Perhaps you have the same vision, but different expectations on execution timing, a common problem if BD isn’t experienced in delivery. Perhaps the concern is around the partners and their commitment (i.e., you don’t believe in the pain points because you didn’t get to talk to the partners: “what if we build it and they don’t come”). Lastly, you may disagree on the product vision. If you don’t have some of the tough conversations early, those problems will be only harder to discuss under delivery pressure.
  2. Did sales rebrand as BD? There is a trend to retitle sales as business, partnership or relationship development. At small startups (< 50 people), it’s also common to have the same person perform the sales and BD role. This can be extra confusing for PMs, so here are some signs if your BD person is actually doing sales.

Thanks to Jake Schonberger, former BD at FB for giving input that helped make this article possible.

Originally published at https://shawli.substack.com.