Sales terms
If you’ve ever taken sales training of any kind, you know that mastering sales vocabulary is shockingly difficult. Many sales terms sound
interchangeable when, in fact, they mean drastically different things. And with an enormous number of sales words thrown around
casually or used incorrectly each day, it’s no wonder even sales experts get confused sometimes.
That’s why we compiled a list of the 100 most useful sales terms every salesperson needs to know. Let’s dive in.
# A few basic sales terms
Account
Customer accounts, also called customer profiles, are created the first time a customer buys a product or service from your business.
These accounts contain important information about the customer, including purchases, interactions, contact information, and
preferences.
Business-to-business (B2B)
Business-to-business (B2B) refers to sales that happen between one business and another. These transactions can be with partners,
distributors, suppliers, or clients. Many B2B companies sell to individual customers, too, but they often have separate departments for
both, as B2B sales are more complex with a longer sales process.
Business to customer (B2C)
Business-to-customer (B2C) refers to sales that happen between businesses and individual consumers. B2C sales include your typical
purchases from various stores—clothing, furniture, groceries, and everyday essentials. Compared to B2B sales, B2C sales are usually
more spontaneous and generate a lower profit per sale.
Lead
A lead is any potential customer who expresses interest in your company’s products or services. Leads can be inbound (the customer
reaches out to you) or outbound (you reach out to them). Most companies focus their efforts on outbound leads through marketing
strategies, social sales, and ad campaigns.
Prospect
A prospect is a lead that has interacted with someone in your company. This distinction allows your sales team to identify who needs
initial outreach and who is officially at the beginning of the sales pipeline. If you need help remembering, think of a prospect as a
prospective buyer: someone in the store looking at products. Leads are outside the window thinking about coming in.
Sales metrics sales terms
Annual contract value (ACV)
Annual contract value (ACV) is the average revenue generated for a particular customer per year. ACV is primarily used in B2B
businesses or in subscription-based B2C businesses where customers make regular, repeated purchases. While ACV can be useful in
calculating expected annual revenue, it’s more frequently used to figure out how long it takes to recoup the costs of acquiring that
customer.
Annual recurring revenue (ARR)
Annual recurring revenue (ARR) is the amount of money a business expects to earn over one year—from all its customers, not just one.
ARR significantly helps with accurate long-term planning and future pricing considerations. Note that ARR only includes repeat
purchases, not first-time customers.
Churn rate
Churn rate is the percentage of customers who stop buying from your company in a given time frame. This metric is calculated by
dividing the number of lost customers at the end of the time period by the total number of customers at the beginning of the period.
Closing ratio
The closing ratio is a sales metric used to measure sales agent success. It compares the number of closed deals to the number of
prospects the agent interacted with. A closing ratio can also be used to predict future sales or make strategy adjustments. For instance,
if the best agents in the company are averaging a 5-percent closing ratio, it’s probably not a reflection of their work ethic.
Conversion
A conversion is any prospect that moves to the next step in the sales pipeline. Conversions can refer to sales, but they can also refer to
prospects setting up a meeting to discuss pricing. In that case, the meeting is the conversion metric.
Conversion rate
Conversion rate is the percentage of prospects that completed the desired action. Just like conversion, the conversion rate can refer to
a sale. But it can also refer to a non-transactional process, such as a prospect signing up for a company’s emails.
Customer acquisition cost (CAC)
Customer acquisition cost (CAC) refers to the amount of money spent on the process of acquiring a customer. CAC includes marketing
expenses, sales rep pay and commission, and work hours dedicated to wooing that customer. For a company to be profitable, the
amount of money coming in from the customer needs to exceed the amount spent on attracting that customer.
Customer lifetime value (CLV)
Customer lifetime value (CLV) is an educated prediction of how much money an individual customer will give your company over their
lifetime. CLV differs greatly between companies due to churn rate, average profit, price of goods, rate of repeat purchase, and length of
the customer lifecycle.
Forecasting
Sales forecasting is the process of predicting future sales so your company can make budgeting, supply, and marketing decisions.
Forecasts come from a variety of factors, including past profits, industry trends, supply chain status, and sales rep success metrics.
Key performance indicators (KPIs)
Key performance indicators (KPIs) are numerical measurements that reflect how a business or individual employee is performing. KPIs
are normally set as goalposts, not requirements. Common KPIs include annual growth, conversion rates, number of cold calls made,
and number of products sold.
Lead scoring
Lead scoring is a ranking system that prioritizes leads by their potential value to the business. This helps sales reps identify which leads
are the most likely to buy the product. Top-ranking leads are in a financial position to purchase the product, would benefit from the
product, and actively need the product.
Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) is the same concept as annual recurring revenue (ARR) but is measured on a monthly scale. This
term is almost exclusively used by subscription-based companies
Net Promoter Score® (NPS)
NPS is a metric used to assess customer loyalty. It’s measured via a survey that asks customers how likely they are to recommend the
business or product to someone they know. Respondents select a number between 0 and 10, and their answer places them into one of
three categories: promoters (repeat, satisfied buyers), passives (satisfied but wouldn’t necessarily recommend the product), or
detractors (dissatisfied and wouldn’t promote). Companies want as many customers as possible to be promoters.
Profit margin
Profit margin measures a company’s gross profit relative to its revenue. To calculate profit margin, divide your gross profit (sales minus
all expenses) by your revenue for a given time period. Then, multiply that result by 100 to get a percentage. You want your profit margin
to be high.
Quota
A quota refers to the number of sales a rep is expected to achieve over a specific time frame (usually a month). Quotas are used as
ideal numbers for reps so they have a sales goal to work toward. However, it’s rare for every sales rep to meet their quota, so it
shouldn’t be used as a marker for company profit.
Sales performance management
Sales performance management is a set of sales processes created for maximum efficiency. Good sales performance management
involves understanding sales rep compensation, quotas, and lead delegation, and then using that knowledge to shape how the sales
team works.
Sales pipeline coverage
Sales pipeline coverage is a ratio that measures how full the sales pipeline is compared to the quota you want to achieve at the end of a
given time period. This gives reps and managers a better picture of growth and quota possibility. If there aren’t enough leads coming in,
then reaching the quota isn’t possible and strategies must be adjusted.
Value chain
Value chain refers to the value your company brings to the market. Value can be measured in many ways, but generally, companies try
to be either cost-effective (extremely low cost) or benefit-effective (extremely high benefit). The more value a company offers, the higher
its chances of success.
Sales strategy sales terms
ABC
ABC stands for “always be closing.” It’s a sales strategy that reminds reps that every step they take in the sales process is one step
closer to closing the deal. Though it’s not a universally accepted strategy (different customers react differently to tactics and every rep
needs to adjust accordingly), it is a nice reminder of the end game when things feel frustrating.
Account-based selling
Account-based selling is a sales strategy where the entire company focuses on converting a few high-value leads rather than casting a
broad net. This isn’t a long-term strategy, but it can be extremely useful if a company wants to use a high-profile client as a marketing
pull for lower-profile customers.
BANT framework
The BANT framework is a checklist used during lead qualification.
B = Budget: Can the lead afford the product?
A = Authority: Is the lead a decision-maker with the authority to buy the product?
N = Need: Does the lead or their business need the product?
T = Time: Is this lead likely to purchase the product in the next sales cycle?
Leads that check all four boxes are extremely qualified and should be nurtured.
Benefits
Benefits refer to how a product solves a prospect’s problems. Benefits should not be confused with features; benefits are the positive
outcomes of features. For instance, time saved is a benefit, while automation is the feature that causes that benefit. When selling, reps
highlight benefits, then describe how the product results in those benefits down the line.
Cold calling
Cold calling is the process of making an unsolicited phone call to a qualified lead in the hopes of turning them into a prospect. Cold
calling is universally acknowledged as a difficult strategy, but it can produce results. It’s also a fast and personal way to contact
numerous leads in a short amount of time.
Cross-selling
Cross-selling is the act of selling an additional product or service to a customer. It occurs when a sales rep discovers that a prospect or
client can benefit from more than one solution. For example, a rep for a mattress company can persuade a prospect to buy new pillows
with their new mattress. In this case, the rep can potentially increase the value of the sale by directing the prospect to a different product
within the same company.
Direct sales
Direct sales are sales that don’t require a middleman. The products are sold directly to the consumer from the seller. Direct sales has
become synonymous with multi-level marketing, but they’re not the same. Multi-level marketing is direct sales through distributors who
work as independent contractors for a larger company.
Discovery call
A discovery call is an initial conversation a lead (soon-to-be prospect) has with a sales rep. This can be a cold call or a scheduled call
based on an information request. The discovery call is crucial in determining the prospect’s pain points and setting a positive tone for
the relationship.
Feature
A feature is an aspect of a product that directly benefits a customer. For instance, mass email automation is a key feature of most
marketing and sales software that helps the customer by simplifying large-scale marketing campaigns and saving time on outreach. It’s
important to remember that the feature is not the benefit—it simply causes the benefit.
Hard sell
A hard sell is an aggressive sales tactic in which the rep directly challenges the prospect’s objections. This is largely an outdated selling
style, but in certain circles, it still pulls in large amounts of revenue. However, most companies now prefer a softer approach.
Markup
A markup refers to a price increase for a product or service. It’s usually done to compensate for expensive production costs or dips in
revenue and profit. Mark-ups can be risky because they can deter current customers, but they can also save a struggling company from
a bad month or quarter.
Objection
Objections are any concerns raised by prospects during a sales conversation. Common objections are about the price of a product or
the necessity of a product. Many reps use sales scripts to address these objections while still acknowledging the concerns.
Pain point
A pain point is a specific problem for a lead—a problem that can hopefully be fixed by a product or service from your company. Being
able to understand and identify customer pain points is a key sales skill for reps. If a customer’s biggest need is ecommerce software
and you’re trying to sell them customer service software, you’re unlikely to make the sale.
Positioning statement
A positioning statement is a semi-prepared statement used by sales reps to start conversations with potential customers. A strong
positioning statement lets the customer know who the sales rep is, who they work for, and what solutions they offer.
Prospecting
Sales prospecting is the never-ending process of identifying and contacting potential buyers. Many companies have departments
dedicated to this task because a strong sales pipeline requires constant movement and new leads. Prospecting tools can greatly help
with this process.
Sales enablement
Sales enablement describes the process of providing your sales team with the tools, training, skills, or resources they need to succeed.
This includes everything from sales software and mobile access to social media sales training and individual sales coaching.
Sales script
Sales scripts are written dialogues or guidelines used by sales reps while they’re interacting with prospects. These scripts can be
extremely detailed and word-for-word, or they can simply be key points for a sales rep to touch on. Sales scripts help keep company
branding and sales strategy consistent.
Smarketing
Smarketing is a newer term referring to the alignment of the sales and marketing departments for smoother workflows and consistent
branding.
Social selling
Social selling is a sales strategy in which reps and companies use social media as a way to interact with prospects and existing
customers. With social selling, social media is typically not where sales take place, but rather a means of communication and lead
nurturing.
Soft sell
A soft sell is a strategy in which sales reps take time to build trust with the prospect and work with them to find the ideal solution. Soft
sales are extremely popular in the consumer market right now and are used by many sales reps.
Sound bite
Sound bites are small phrases that sales reps use to communicate simple matters to prospects. Usually, sound bites are answers to
commonly asked questions or objections that make the rep’s life easier.
Upselling
Upselling is a tactic in which a rep tries to increase the value of a sale by encouraging a prospect to buy a higher-end version of the
initial product they were interested in. Depending on the type of company, upsells may include additional features, more expensive
products, or subscription upgrades.
Value proposition
A value proposition is a breakdown of all the benefits provided by a product or service. Sales reps may choose to emphasize or omit
certain benefits from this list depending on the prospect.
Improve your sales process
A good sales process is the foundation of any successful sales organization. Learn how to improve your sales process and close more
deals.
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Sales job sales terms
Account executive
Account executives are responsible for managing customer accounts. They handle current and prospective clients daily. Account
executives are slightly more specialized than sales reps, as they’re frequently assigned to high-profile accounts.
Account development representative
Account development representatives are responsible for creating new sales strategies, identifying potential clients, and understanding
market trends. They consult with sales managers to keep strategies current.
Business development representative (BDR)
Business development representatives (BDRs) focus on outbound leads for a company. These are not necessarily individual sales, but
rather partnerships that could be beneficial for the company’s future.
Commission
Commission is an additional payment that sales reps earn after closing a deal. Commission rates and policies vary from company to
company.
Field sales rep
Field sales reps often work outside of an office and travel to potential and current customers to negotiate deals in person. These reps
can be B2B or B2C and are highly valued by sales companies.
Inside sales rep
Inside sales reps work from an office and primarily interact with their clients by phone or online communication methods.
Sales coach
Sales coaches work with sales teams and individuals to improve skills and self-confidence on the sales floor. Sales coaches can be inhouse managers with additional training or be hired as third-party consultants.
Sales development representative (SDR)
Sales development representatives (SDRs) are inside sales reps who work to convert inbound leads. They’re the primary contact
between leads, prospects, clients, and the company itself. Depending on the size of the business, SDRs may also handle outbound
leads.
Service level agreement
A service level agreement (SLA) is a contract between sales and marketing outlining each department’s expectations for the other.
SLAs ensure alignment and accountability between the two teams.
Sales customer sales terms
Bottom of the funnel (BOFU)
Bottom-of-the-funnel (BOFU) prospects are very close to making a purchase decision. They have all the facts they need, they’ve
connected with the company, and they’re ready to buy.
Buyer behavior
Buyer behavior refers to the choices consumers make when they’re moving through the sales funnel. Buyer behavior is never consistent
and can be influenced by internal factors (needs, mood, etc.) and external factors (economic environment, market prices, etc.).
Buying criteria
Buying criteria are pieces of information a customer requests to see before they make a purchase. These criteria include factual
information (such as pricing) and persuasive information (why your company is a better choice than your competitor).
Buying signal
Buying signals are indicators that a customer is ready to buy. Sales reps use these cues to figure out when it’s time to push for a close.
Some buying signals include signing up for demos or asking specific contract questions.
Buying intent
Buying intent refers to the odds of a prospective customer making a purchase. Many companies use tracking analytics to keep tabs on
leads who research their products and target those with the highest buyer intent.
Consumer
A consumer is anyone who uses your product or service. It’s important to distinguish between consumer and customer. A customer is
someone who gives you money in exchange for the product, while a consumer is someone who uses it. A parent purchasing baby
clothes is a customer, but the infant is the consumer.
Customer success
Customer success is the process of making sure customers get the most value out of their purchase from a business. Some companies
have departments in charge of this process, which includes everything from customer relations to tech support.
Decision-maker
The decision-maker is the person who can sign off on a sale. When you’re reviewing a lead’s authority qualification in B2B sales, you’re
often looking to see if they are the decision-maker or if they have direct contact with the decision-maker.
Middle of the funnel (MOFU)
Middle-of-the-funnel (MOFU) prospects are in the middle of the sales funnel. At this stage, the prospect has a relationship with the sales
rep and is learning more about the products and solutions.
Opportunity
An opportunity is largely interchangeable with a qualified lead. It refers to a prospect that’s completed the qualification process and
shows promise as a customer.
Top of the funnel (TOFU)
Top-of-the-funnel (TOFU) prospects are at the beginning of the sales funnel. They may have expressed interest or contacted sales, but
they’re not completely sure what their pain points are or what features they need from a product or service.
Sales software sales terms
Ad-hoc reporting
Ad-hoc reporting is a sales reporting tool that reflects user parameters. Many sales software programs automatically generate certain
sales reports (overall quarterly reports, etc). Ad-hoc reports are generated by request and usually answer specific metric questions (for
instance, What is the combined conversion rate for sales rep 1 and sales rep 2?)
Business intelligence
Business intelligence is an umbrella term for any tool or process that a company uses to make data-driven decisions. This includes data
analysis, KPI comparison, or data visualization.
Cases or tickets
Used interchangeably, cases and tickets refer to any post-purchase customer issues. They are compiled and handled by the customer
service team, but all departments should have access to them through company software.
Customer relationship management (CRM) systems
Customer relationship management (CRM) systems are sales software programs that help businesses track every aspect of sales and
marketing, from sales metrics to customer profiles. CRMs also integrate with other sales technology software to streamline company
activities.
Cloud-based CRM
Cloud-based CRM software refers to any CRM that is capable of being hosted in the Cloud. This makes all relevant data accessible to
every user—regardless of their location—enabling inside sales agents and field sales agents to stay on the same page.
CPQ software
CPQ (configure price quote) software is a form of sales automation software. It helps sales agents automate customer quotes and
proposals, resulting in faster communication, better accuracy, and an improved customer experience.
Contract management
Contract management is the process of handling contracts with customers, vendors, partners, and employees. Different departments
often manage different types of contracts, but they are all considered contract management.
CRM analytics
CRM analytics refers to the analysis of data in a CRM. These analytics can be used to improve sales and marketing tactics.
Enterprise resource planning (ERP)
Enterprise resource planning (ERP) is business software that manages a company’s financials, supply chain, operations, commerce,
reporting, HR, and manufacturing. An entire company can be managed with the right ERP, particularly when it’s combined with the right
CRM.
Escalations
Escalations refer to the process of customer cases or tickets being moved to a higher-authority agent or manager. This usually happens
when a lower-level member is unable or unqualified to fix the customer issue.
Knowledge base
A knowledge base is an online collection of information about a business. It can include everything from product information to sales
scripts to marketing plans. Internal knowledge bases are meant to be used by employees, while external knowledge bases are
customer-facing, often in the form of FAQs and product usage information.
Lead management
Lead management refers to the entire process of generating, qualifying, and tracking leads. It also includes prioritizing leads in order of
buyer intent for the sales team using lead management software.
On-premise CRM
In contrast to a Cloud CRM, an on-premise CRM is CRM software hosted solely on the company’s server. On-premise CRMs are more
common for businesses handling large amounts of sensitive information.
Opportunity management
Opportunity management is the process of organizing, delegating, and tracking all the deals in a sales pipeline. This ensures equal
distribution and more likelihood of closing. Opportunity management is handled within a CRM by a sales manager.
Sales dashboard
A sales dashboard is a visual picture of real-time sales data that keeps everyone in your company up-to-date on metrics. Sales reps can
use the sales dashboard to easily monitor daily, weekly, and monthly goals.
Sales pipeline and sales funnel sales terms
Bad leads
Bad leads are leads that are low-qualified and unlikely to make a purchase. These leads should not be pursued—no matter how few
leads the sales team has—because it will probably be a waste of time.
Buyer persona
A buyer persona is a detailed description or fictional representation of the perfect customer. Most companies have multiple buyer
personas, depending on their target demographics. Buyer personas help marketing and sales teams shape their tactics to best fit the
ideal customer.
Buying process
The buying process is a three-step journey every buyer takes to go from the beginning to the end of the sales funnel. The three steps
are awareness (TOFU), consideration (MOFU), and decision (BOFU). Knowing where a prospect is in the buying process lets reps
know which sales techniques to use.
Closed opportunities
Closed opportunities are buyer journeys that come to an end, whether positively or negatively. It doesn’t matter if a sale is made or if the
prospect decides not to buy—the opportunity is considered closed.
Closed-won
Closed-won refers to closed opportunities that end in a sale.
Closed-lost
Closed-lost refers to closed opportunities that did not end in a sale. But it also includes opportunities that simply require follow-up in a
few months (for instance, the prospect can’t invest in your solution while they’re under a contract with another company, but they’re still
interested).
Conversion path
The conversion path is the process a potential customer goes through to become a lead. This includes customer actions (such as
signing up for a newsletter) and marketing actions (like creating enticing calls to action).
Demand generation
Demand generation is the marketing process of creating brand awareness and interest in a company. This includes activities like
nurturing programs, content creation, and SEO (search engine optimization).
Gatekeeper
A gatekeeper is anyone who allows or prevents a sales rep from contacting a decision-maker. This term is used in B2B and B2C sales
and includes everyone from assistants protecting bosses to children answering calls they shouldn’t.
Lead generation
Lead generation refers to the process of attracting people to the company so they can become prospects. Common tactics to generate
leads include social media sales, email marketing, and optimized web content.
Lead qualification
Lead qualification is the process of evaluating a lead to see if it’s worth pursuing. Every business uses specific criteria to determine if a
lead is qualified before passing their information to the sales team.
Marketing-qualified lead (MQL)
A marketing-qualified lead (MQL) is a lead that ticks the qualification boxes for marketing but not necessarily for sales. MQLs are
qualified based on engagement with marketing materials, but sales-qualified leads (SQLs) also have to check the boxes for financial
stability and decision-making.
Pipeline management
Pipeline management refers to any activities that go into managing the sales team and the sales pipeline. Pipeline management is
frequently handled by sales managers and includes delegation, metrics management, and training.
Qualified lead
A qualified lead is a lead that has a high probability of converting into a customer. This means they meet certain requirements that
indicate they’re a good fit for a product or service, and the sales team should plan on reaching out to them.
Sales funnel
The sales funnel illustrates the steps of the customer journey. It runs parallel to the sales pipeline (which outlines the sales rep’s
journey). The sales funnel is typically broken down into five stages: awareness, interest, evaluation, engagement, and purchase. You
can track these stages via a sales funnel platform within your CRM.
Sales process
The sales process is an umbrella term that covers the processes of the sales pipeline, the sales funnel, and the buyer’s journey.
Essentially, it is all the steps that turn a lead into a paying customer.
Sales pipeline
The sales pipeline covers the steps each sales rep takes as they guide a prospect through the stages of the buying process. The sales
pipeline runs parallel to the sales funnel and should be a repeatable process, no matter what tactics the sales rep uses.
Weighted sales pipeline
The weighted sales pipeline is a sales pipeline broken down by opportunity value. This helps sales reps determine where to direct their
focus. A high-value prospect in the TOFU stage might be worth more attention than a low-value prospect in the MOFU stage, even
though the second prospect is farther along in the process.
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81 Crucial Sales Terms: The Only Sales Glossary You Need
Mary Clare Novak
If the sales field is one thing, it’s complex.
Pleasing difficult clients, stressing out over hitting goals, and mastering your company’s sales process can overwhelm just about
anybody. On top of all of that, there’s a bunch of sales terminology you need to keep track of.
There are countless terms used in the sales realm, and even the experts use certain words incorrectly. Mastering every sales term is no
easy feat, however, it’s necessary for communicating effectively in your sales department.
Common sales terms
Whether you’re an aspiring rep, a marketer working with your company’s sales department, or an experienced seller looking to brush up
on your vocabulary, we’ve put together 81 fundamental sales terms to act as a refresher or a starting guide.
ABC
ABC is an acronym that stands for “always be closing”. This is a sales strategy that is rooted in the idea that every action a sales rep
takes throughout their sales process is in pursuit of closing a deal.
Account
An account contains all the records of customer interactions, including contact information, preferred services, and transactions with
your business. An account is created after the first time a customer buys from your business.
Account-based selling
Account-based selling is a strategy where the entire company coordinates to pursue high-value accounts. The departments that are
most typically involved in account-based selling are sales, marketing, and customer success.
Account executive
An account executive is the person responsible for managing customer accounts. They communicate with both prospects and current
customers to understand their pain points, address concerns, and close deals. An account executive needs to have extensive
knowledge of the business’s value proposition so they can relate it back to the needs of a particular customer.
Account development representative
An account development representative develops sales strategies, identifies potential customers, maintains a solid understanding of the
current market, and participates in any other activities that help a company meet their sales goals.
Annual contract value (ACV)
The annual contract value is the average annualized revenue per customer contract. ACV is usually compared against customer lifetime
value to see how long it takes to pay back the cost of acquiring a customer.
Example: If you have a customer who signed a 4 year contract for $100,000, your ACV would be $25,000.
Business development representative (BDR)
A business development representative is a member of the sales team that focuses on outbound leads. This means they reach out to
people in hopes they will become a sales opportunity.
Business to business (B2B)
B2B refers to businesses that sell solutions to entire businesses.
Business to consumer (B2C)
B2C refers to businesses that sell solutions to individual consumers.
b2b vs b2c
Bad leads
A bad lead is a lead that is unlikely to become a paying customer, wasting the time of a sales representative.
BANT framework
BANT is an acronym used when sales representatives are qualifying leads.
B = Budget: determines if the business has the budget to purchase the solution
A = Authority: identifies key decision-makers in the business
N = Need: verifies that the business has a real need for the solution
T = Time: checks if the business is likely to make a timely purchase
Sales representatives use BANT to help them decide whether or not a prospect is qualified, meaning they are worth pursuing.
Bottom of the funnel
The bottom of the funnel is the stage in the buying process where the customer makes a buying decision. They have moved down the
sales funnel from the top (becoming aware of their problem and potential solutions), to the middle (showing interest and comparing
options), to the bottom (taking action and showing loyalty to a brand).
Buyer behavior
Buyer behavior is the manner in which a customer chooses solutions. It can be influenced by their wants, needs, aspirations,
occupations, and environment.
Buyer persona
A buyer persona is a representation of the ideal customer for your business. Companies create buyer personas based on market
research and data about existing customers. Having a buyer persona in mind is important for marketers creating a target audience and
for sales representatives qualifying leads.
Example: David is a 28-year-old architect living in Michigan who is looking for a software that will help him keep customers, accounts,
and projects organized and up to date.
Buying criteria
Buying criteria is any information a customer might request so they can make a well-informed buying decision. A customer might ask
about particular benefits, how your business is different/better than the competition, and how much the solution costs.
Buying process
The buying process is the stages that a buyer encounters on their journey to find a solution and buy a product. The buying process can
be broken down into more specific stages, but they are all grouped into three main steps:
Awareness: the customer identifies their problem and seeks to understand it.
Consideration: the customer does further research to find a way to resolve their problem and considers their options.
Decision: the customer decides on a solution.
Buying signal
A buying signal is a verbal or nonverbal cues that show a customer is ready to make a purchase, such as signing up for a free trial or
asking about contract specifics. Picking up on these signals can help sales reps better focus their attention on customers that are giving
off more buying signals.
Buying intent
Buying intent is the likelihood of a person making a purchase, which is realized through monitoring online buying journeys. Businesses
can use tools like G2 Buyer Intent to learn the companies researching their product and find the right people to contact.
Churn rate
Churn rate is the percentage of customers that stop doing business with a company over a certain period of time. The churn rate is
calculated by dividing the number of customers you lost by the number you had at the beginning of the chosen time frame.
Example: If you started your first quarter with 100 customers, and lost 8 over the course of that quarter, your churn rate would be 8%.
Closed opportunities
Closed opportunities include both closed-won and closed-lost opportunities. However, some businesses use this term to mean only
closed-won opportunities.
Closed-won
Closed-won is when a sales rep closes a deal and the customer purchases a solution.
Closed-lost
Closed lost is an opportunity that does not end with a sale being made.
Closing ratio
A closing ratio is the number of deals closed compared to the number of engaged prospects. This ratio can be used to evaluate the
performance of an individual sales rep and forecast sales.
EXAMPLE: If you gave 50 value demonstrations and won 5 deals, your closing ratio would be 50:5, or 10%.
Cold calling
Cold calling is making an unsolicited call in an attempt to identify prospects and talk to them about their needs and how that company’s
solution can resolve them.
Commission
Commission is additional compensation that is earned based on performance. The money typically comes from a portion of the sales
revenue. Any sales related position is a common commission based job, but the percentage will be different from business to business.
Example: If a salesperson made a $100,000 sale and they get 15% commission, they would earn an additional $15,000 to their salary
from the sale.
Conversion
A conversion is a person that completes a desired action, such as making a purchase or subscribing to your email newsletter.
Consumer
A consumer is someone that uses a product or service. This doesn’t always mean the consumer is buying the product. If you buy a gift
and give it to your friend Bob to use, Bob is the consumer.
Conversion path
A conversion path is the steps a person takes to become a lead. The stages involved typically include people interacting with a
business’ content and calls-to-action.
Conversion rate
The conversion rate is the number of conversions divided by the total number of site visitors.
Example: If you had 100 site visitors and 15 of them resulted in a conversion, your conversion rate would be 15%.
Cross-selling
Cross-selling is when a sales rep finds more than one solution that will help a particular customer. This can either happen at the time of
the first purchase or later on once the sales rep has created a relationship with the customer.
Customer acquisition cost (CAC)
Customer acquisition cost is the cost associated with getting someone to purchase your solution. CAC is a good indicator of profitability
- the amount of money extracted from customers is compared to the cost of acquiring that customer.
Example: If you make a profit of $1,000 from a customer, but acquiring them cost $1,500, you might want to reprioritize.
Customer lifetime value (CLV)
Customer lifetime value is a prediction of the profit that will result from a relationship with a customer. CLV can be affected by the length
of the customer life cycle, retention rate, churn rate, and average profits by customer. There are two types of CLV:
customer lifetime value
Customer relationship management (CRM) systems
Customer relationship management software acts as a database full of customer information. There are three types of CRM tools:
Operational CRM: manages day-to-day information
Analytical CRM: analyzes customer data and behavior
Collaborative CRM: streamlines communication with customers and makes it easy to share information across any customer-facing
department
Contact information, past interactions, and previous purchases can all be found in a CRM tool. CRM is designed to help sales reps
create relationships with customers and give customers a personalized experience, resulting in more sales.
Customer success
Customer success is a business practice, or department, that ensures customers achieve their desired outcome when using a business
solution. This creates a mutually beneficial situation for the business and the customer - the customer resolves their pain point and the
business increases the likelihood of earning that customer’s loyalty.
Decision maker
A decision maker is the person who makes the final decision of a sale. This person needs to have the authority to buy.
Demand generation
Demand generation is a marketing process that builds awareness and interest in a company’s solution. Demand generation activities
include lead nurturing programs, content marketing, and search engine optimization.
Discovery call
A discovery call is the first call a sales rep makes to a prospect. This stage can also include lead qualification and determination of pain
points.
Field sales rep
A field sales rep is a traveling salesperson who presents value demonstrations to potential customers. Their goal is to close and make a
sale.
Forecasting
Forecasting is the act of estimating future sales so companies can make better business decisions and predict performance. Forecasts
can be based on past sales data, industry comparisons, or economic trends.
Gatekeeper
A gatekeeper is a person that either enables or prevents information from reaching the intended person at a company. An example of
this would be a personal assistant giving a message to a decision maker, the intended recipient.
Inside sales rep
An inside sales rep is a salesperson that conducts most of their business over the phone or online.
Key performance indicators (KPIs)
A key performance indicator is a measurable value that indicates how effectively a business is reaching its goals and objectives. KPIs
exist at multiple levels - a high-level KPI would focus on overall performance, such as annual growth, and a low-level KPI would focus
more on day-to-day activities, such as sales emails sent.
Lead
A lead is a person or company that has expressed interest in another company’s solution that might eventually become a customer.
Businesses can gather leads through marketing, trade shows, or networking.
Lead generation
Lead generation is the process of attracting people and converting them into prospects through activities such as website optimization,
social media, and email marketing.
Lead qualification
Lead qualification is the process of determining whether or not a lead is worth pursuing. Sales reps use the BANT framework to qualify
leads and draw conclusions about whether or not they have a high chance of becoming a long term customer. If a sales rep finds out
that the lead doesn't have the budget or need for the solution, they will make them a low priority.
Lead scoring
Lead scoring is a method that ranks prospects according to the value they can add to the business. The purpose of lead scoring is to
help sales reps understand how they should prioritize their time and energy to make the most profit.
Mark-up
A mark-up is the amount added to the price of a solution to cover overhead.
Marketing qualified lead (MQL)
A marketing qualified lead is a lead that is qualified as interested in a business based on engagement with their marketing materials.
Middle of the funnel (MOFU)
The middle of the funnel is the part of the buying process where a lead conducts research to find a solution to the problem at hand. At
this point, a lead will likely be looking at the features specific to your solution and customer reviews.
Monthly recurring revenue (MRR)
Monthly recurring revenue is the amount a business receives per month. This metric is usually used if the business is subscriptionbased.
Net promoter score
A net promoter score is a customer satisfaction metric that measures how likely a customer is to recommend your solution. This data is
usually collected using a survey. Based on the rating they give, a customer is either considered a detractor (wouldn’t buy the solution
again or recommend it), passive (satisfied but wouldn’t necessarily promote the solution), or a promoter (a repeat buyer that acts as a
brand ambassador). Some industries use a scale of 0-10, while others use 0-100.
Objection
Objections refer to any questions or concerns from a prospect after a sales rep has performed a value demonstration. Common
objections have to do with budget, authority, need, and timing (BANT). Handling these objections is a step in the sales process and a
necessary skill of any sales rep.
Onboarding
Onboarding is the act of introducing your solution to a customer and getting them set up to use it after they buy. It can also refer to
hiring and training a new sales rep.
Opportunity
An opportunity is a contact or prospect that has been qualified and is considered worthy of pursuing. It is important to note that the
definition of an opportunity can vary across businesses. The general idea is that they show potential for becoming a customer.
Pain point
A pain point is a customer’s need. Identifying the pain points of a particular customer and showing how their solution can relieve them is
necessary for sales reps trying to close a deal. Common customer pain points include spending too much on a solution, wasting time
when buying, experiencing a bad selling process, and not getting enough post-sale support.
Positioning statement
Positioning statements are comments or questions a sales rep uses to engage the prospect. The purpose of a positioning statement is
to start a conversation with the consumer and learn about their pain points.
Profit margin
Profit margin is a ratio of profitability that reveals how much money a company actually makes. It is the amount by which revenue from
sales exceeds costs. To calculate profit margin, divide your gross profit (revenue-cost of goods sold) by revenue.
Example: If your gross profit was $500, and your revenue was $2000, your profit margin would be .25, or 25%.
Prospecting
Prospecting is the process of looking for potential buyers. This is the first step in the sales process, and the goal is to move these
prospects down the sales funnel and convert them into loyal customers.
Qualified lead
Qualified leads are leads that have been deemed more likely to become a customer based on certain criteria they provided or you
discovered. There are two types of leads.
Sales qualified lead: a prospective buyer that has been vetted by sales.
Marketing qualified lead: a prospective buyer that has shown interest in a business by engaging in their web content.
Quota
A quota is a set amount of sales that a rep is expected to meet over a given time frame.
Sales development representative
A sales development representative is an inside rep that focuses on inbound leads, which are leads that approach your business and
express interest in your solution.
Sales enablement
Sales enablement is a strategy that enables a sales team with the tools, processes, training, and other resources they need to improve
their performance and help provide for the customer.
Sales funnel
A sales funnel is a model that outlines the customer journey in six key stages: awareness, interest, consideration, intent, evaluation, and
purchase.
Sales methodology
A sales methodology is the framework that outlines how your sales reps approach each step in the selling process. A sales
methodology includes philosophy, values, and principles.
Sales process
A sales process refers to the concrete steps and actions a sales rep goes through to make a sale. These are repeatable steps to
convert a prospect into a loyal customer.
The sales process and sales methodology are often confused, so let’s break it down visually.
sales process vs sales methodology
Sales pipeline
The sales pipeline represents a step by step process that a sales rep takes to move someone from being a prospect to a loyal
customer. The pipeline is divided into stages based on the customer’s readiness to buy.
Sales pipeline coverage
Sales pipeline coverage is a ratio that compares how full your sales pipeline is against your quota in a given period. It acts as a good
indicator of sales team performance and helps forecast your company’s ability to grow.
Service level agreement
A service level agreement is an agreement between the sales and marketing departments of a business that defines their expectations
for each other. The service level agreement exists to make sure the sales and marketing departments are aligned and complement
each other’s work.
Smarketing
Smarketing refers to aligned sales and marketing efforts. The word sounds silly, but the principle behind it is crucial for the success of a
business. Marketing and sales need to support each other, and that requires a lot of communication and collaboration.
Social selling
Social selling is the act of using social media to interact with prospects. Oftentimes, this includes providing answers to simple questions
that will help the prospect better understand their pain points and potential solutions.
Sound bite
A sound bite is a series of words or phrases that a sales rep has prepared to help them quickly and effectively communicate with a
prospect.
Top of the funnel
The top of the funnel refers to the first stage in the buyer’s journey. At this point, buyers are still trying to understand their problems. On
the selling side, it’s the job of marketers to provide content that will help educate the buyer about their problem and point out possible
solutions.
Upselling
Upselling occurs when a seller finds a higher-end solution to provide an existing customer. An example of this would be when you buy a
subscription to a software tool, and the next month the sales rep attempts to upsell by showing you the ropes of a more expensive
version with better features.
Value proposition
A value proposition is the presentation of the benefit(s) that a solution provides to its customers. A good value proposition (that is
presented during the value demonstration stage in the sales process) will cater to the individual needs of that particular customer.
Weighted sales pipeline
A weighted sales pipeline is a version of the sales pipeline where a value is placed on each opportunity based on their current stage in
the sales process.
CRM terms
A significant part of understanding the basics of sales is grasping customer relationship management (CRM) software. CRM is the
primary tool used by businesses to track prospect interactions and deal progress. It aids in drawing conclusions in regards to finding the
most effective methods to attract, convert, and retain customers.
You’ll find that a lot of the CRM terms listed below refer to the management of a related sales term mentioned above, especially when
referring to a stage in the buying process or sales funnel. This is because CRM is a system for sales reps, marketers, and customer
service agents to find ways to better manage the customers in each one of these stages or their overall sales process.
Ad hoc reporting
Ad hoc reporting refers to the business intelligence process that creates reports with real-time data sets as needed by users. These
reports are put together to answer a specific question in response to a particular event. Essentially ad hoc reporting shows the after
effects of a certain business action.
Business intelligence
Business intelligence refers to a wide range of tools used to transform data into actions for companies to take in regards to their overall
business goals, strategies, and tactics. This process uses data analytics to examine information and present relevant findings in the
form of reports, dashboards, or other types of data visualization.
Cases
A case refers to an issue that a customer has presented to a sales rep that needs to be addressed. These cases can be opened for a
variety of reasons, such as needing support on using a product or making changes to information in a customer’s profile.
Cloud based CRM
A cloud based CRM is CRM software that is hosted on the cloud. This means that all of the information stored on a CRM can be
accessed by authenticated users on the internet, as opposed to a physical piece of hardware.
CPQ software
CPQ software, also known as configure price quote software, helps businesses automate the process of quoting and sending proposals
to customers. This cycle starts when a customer expresses their needs to a business and ends when a quote is sent over. The purpose
of using CPQ software is to accelerate the process, produce an accurate quote, and improve customer relations.
Contract management
Contract management refers to the process of governing the life cycles of contracts with customers, vendors, partners, and employees.
Contract management begins when a contract is drawn up, and ends when it expires. However, within that time frame, the contract
might be renewed or the terms may change, requiring management.
CRM analytics
CRM analytics is the analysis of data held within your business’ CRM tool. Insights gathered from the results are specific to customers
and your sales pipeline, such as buying trends and areas of improvement within the sales process.
Escalations
An escalation occurs when a customer issue is directed to a higher-up department so it can be resolved more effectively. It’s possible
that an issue will be presented to a department that doesn’t have the appropriate knowledge, resources, or power to resolve it. This is
where escalations happen.
Lead management
Lead management refers to the process of generating, tracking, and prioritizing potential customers. Once these leads are generated
from other marketing or sales actions and qualified as worthy of pursuing, they are arranged and approached based on their likelihood
of making a purchase. After that initial contact is made, they are nurtured and hopefully converted into customers. This whole process is
referred to as lead management.
On-premise CRM
On-premise CRM is software hosted on the company’s own server. This version of CRM is often accompanied with access to the
source code, so it can be customized to fit the needs of that particular company. It also gives businesses complete control over the data
being held within the CRM.
Opportunity management
Opportunity management refers to the administration of deals within a business’ sales pipeline. The purpose of this added layer of
attention to opportunities is to enable sales reps to easily and conveniently close as many deals as possible.
Pipeline management
Pipeline management works to streamline every stage of the sales process and customer journey. It refers to the process of moving
leads further down the pipeline, with the ultimate goal of converting them into customers.
Sales dashboard
A sales dashboard is a method of data visualization that portrays your most important sales metrics in a way that is easy to understand.
Sales dashboards can be created for a variety of sales department matters, such as performance, conversions, and activities
completed.
Sales performance management
Sales performance management refers to the organization of sales processes to improve efficiency and effectiveness. Areas of sales
performance management include compensation plans, quota setting, and territory management.