Business Monetisation and Business Development

Monetisation delivers economic value. Business development delivers customer acquisition. They are not the same job, and confusing them costs money.

Is the business development manager living up to the title? Does monetising a product or service really fit inside a sales mandate? Is originating, negotiating and executing complex, financially driven commercial deliverables a pure sales function?

The business development role in early-stage entrepreneurial businesses has grown in status, alongside the funding available to founding teams to chase growth. And with funding comes an immediate need to justify it with measurable traction.

Management teams push to raise revenue to validate product-market fit. On the surface that is customer acquisition, a sales initiative, driven by business development — think of partnerships negotiated to bring in new customers. Because it sits with sales, the KPIs used to measure it are sales KPIs. But for those partnerships to work they have to be commercially driven, which means structured and measured against specific financial and qualitative metrics.

Monetisation is about financial performance against measurable metrics.

Digitally driven marketplaces involve diverse user groups: customers, suppliers, service providers. Servicing and monetising each of them takes flexibility. One price point for everyone no longer works. You have to think about each user's needs and value expectations, and about how those users depend on each other across the marketplace and the wider supply chain.

In a vertical market, sales targets specific buyers. In a platform economy, network effects turn every user into a potential supplier and a potential customer, transacting on immediate need and on their interdependence with each other. Converting those users into loyal customers requires a commercially driven strategy, not a sales-driven one.

So whose deliverable is it, finance or sales?

Creating a meaningful proposition for every user on a platform means understanding the value proposition relative to each of them, then structuring and negotiating pricing to deliver it. That is the role of a business monetisation leader.

From my experience working with growth companies, the deliverable is a commercially driven customer acquisition strategy rather than a sales-oriented one. Ownership of business development partnerships, including the strategy and the negotiation, belongs under the commercial leadership of the business.

Chief executives need to focus on originating and implementing customer and product monetisation strategies, and on generating high-margin, sustainable cash flow from diverse user groups.

Further reading: Blitzscaling, by Reid Hoffman, on why growth strategies need to be anchored in economic value and financial metrics.

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