Because we are The Clueless Company, we take it upon ourselves to be your knight in shining armor.
How?
Because we save you from being clueless, duh?
This time, I am going to share all about the sales terms and definitions I have come across since 2007. How old were you then? 😆
A
- ABC: This stands for ‘Always Be Closing’. Here, closing literally means getting a new customer onboard. It is often used as a motivation (or a gentle reminder) that they should always be prepared for closing a customer.
- ABE: Also known as ‘Account-based Everything’, it indicates everything that is done to target and close a particular niche of accounts for a business.
These accounts are first segmented based on parameters, targeted through account-based marketing (ABM) and closed accordingly.
- Account: An account is referred to as a paying customer who has transactions with your brand. In SaaS, an account also means a separate product login created for a user.
- Account Manager: An account manager is someone who handles and maintains the accounts (customers) through first-hand service. SaaS and service-based brands should consider having an account manager.
- AIDA: Stands for ‘Awareness, Interest, Desire, Action’, AIDA represents a funnel, or a pipeline which each buyer goes through. Ideally, this is how each prospect should be engaged, with each stage focusing on different aspects of the stage.
- Analysis: A widely used term, analysis is when you observe and understand how a particular something is faring over a period of time.
Analysis is also done to optimize current performance and run a forecast for the coming months.
- Annual Contract Value: ACV or Annual Contract Value indicates the total sales revenue you earn from a customer over a one-year period.
- ARR: ARR is ‘Annual Recurring Revenue’, a metric for brands charging subscriptions to their customers, either monthly, quarterly or annually. It indicates the annual revenue earned through subscriptions, which is due to be followed or recur periodically.
Say, you have 10 customers paying USD 10K each, every year, then your ARR would be USD 100,000.
- ATC: ATC, or ‘Attempted to Contact’ is a stage where sales reps have attempted to contact the prospect, but an interest-based conversation hasn’t happened yet.
- Awareness: Awareness is rather a mindset, which drives strategies across departments in an organization.
For a brand to sell their product or service, they need to raise awareness of the solution they have to a problem their target audience faces.
B
- B2B: This stands for ‘Business-to-Business’, meaning, a business that is selling their products or services to other businesses.
TCC is a B2B business, and we cater to other B2B businesses 🙂
- B2C: Quite different from B2B, B2C is ‘Business-to-Consumer/Customer’. It indicates businesses catering to customers with their offerings.
A restaurant is a business that caters to people like you and me, the customers.
- BANT Framework: BANT stands for ‘Budget, Authority, Need, Timing’. It is a framework sales teams implement to understand their audience and sell their products better.
Prospects are judged and pitched based on their BANT parameters, which in turn affects customer experience.
HubSpot has explained BANT framework beautifully here.
- BDE & BDM: BDE is ‘Business Development Executive’, and BDM is ‘Business Development Manager’. They are roles of a sales team, which generally mean different things for different brands.
Factually speaking, these roles are responsible for business development (in numbers, literally) through different strategies, channels and approaches.
- Billing Cycle: A billing cycle refers to the timeline of a payment received from the customer.
Say, a customer is with you on a monthly subscription model, and they pay for the first month on 10 February, their billing cycle would last from 10 February to 9 March, followed by 10 March to 9 April and so on.
- BOFU: BOFU stands for ‘Bottom of the Funnel’. As the name suggests, it falls at the end of the audience awareness funnel, representing those who are almost unaware of your brand or the solution you are selling.
- Buyer: A buyer is someone who pays for and buys your product to achieve a purpose. That buyer can be a direct consumer, or even a business.
- Buyer Persona: A buyer persona is like a character of your ideal customer.
Because, ideal essentially is fictional these days, a buyer persona helps you pan out the characteristics and qualities of your ideal customer, which further helps you target and sell your product better.
You can have multiple buyer personas based on your demographics and parameters.
- Buying Intent: Any prospect carrying a buying intent has a higher probability of purchasing from you. These prospects are aware of what they need, and are willing to understand your offerings better.
The buying intent is also supported by the queries prospects use on search engines and during conversations.
C
- Channel Partners: Channel partners are those businesses or individuals who collaborate with you to promote and sell your products to their audience.
They are also referred to as distributors or resellers.
This is, in effect, a great way to expand your business in numbers and demographics.
- Channel Sales: Sales generated by your channel partners are referred to as channel sales. They are usually accompanied with a commission, either a flat amount or a percentage of the entire purchase price.
I have explained this in detail in our B2B sales channels blog.
- Churn Rate: Churn rate is represented by the ratio of customers lost against the total number of customers in a particular time period.
Say, you have a total of 100 customers in 2022, and you lost 5 of them. So, the churn rate would be 5%.
- Closed Leads: Sales reps close those prospects for whom they have got no further discussions to do.
- Closed-lost: Sales reps mark those prospects as closed-lost with whom they have no hopes of having a further conversation, or who have not displayed any intent to purchase from your brand, or even those who have purchased from your competitors.
- Closed-won: The prospects which are closed because they have converted into a customer are marked as closed-won.
- Closing Ratio: The closing ratio is indicated by the number of prospects you close against the number of unique prospects you receive in a certain time period.
Say, you closed 5 prospects out of 20 received in a month’s time, then the closing ratio for that month would be 25%.
- COB: This stands for ‘Close-of-Business’, also known as End-of-Business (EOB).
Every business has working hours, and any transactions or activities happening within those hours are recorded by EOB/COB.
- Cold Calling: Cold calling is the method of approaching and calling the audience that has not expressed interest in purchasing from your business.
- Cold Leads: Leads or prospects generated from cold outreach campaigns are referred to as cold leads. They might take a bit more time to convert into customers.
- Cold Outreach: Cold outreach is a strategy marketing and sales teams use in order to generate more leads, and thereby business.
The audience here is not particularly interested in your offerings, but they fall under your buyer persona, which makes them an ideal target market.
- Commission: It is the amount you pay to your sales reps or channel partners for each sale they bring for your brand.
Sales is often an incentivized job, which acts as a push towards performing better.
- Conversion Rate: Conversion rate is defined as the ratio of number of prospects you received against the total number of visitors in a particular time period.
It indicates how effective your content, design and user experience is.
- Cross-selling: The approach of selling related or complementary products to what the customer has already purchased is called cross-selling.
It is often used by brands having various, integrated products to increase their average revenue per user.
Interchanged with upselling, we have recently written a blog differentiating both the concepts.
- Customer: A customer is referred to as someone who uses your products and services by paying for it. They are synonymous with buyers.
Customers are one of the primary sources of revenue for businesses.
- Customer Acquisition Cost (CAC): The customer acquisition cost is a metric calculated to understand the cost incurred to the brand in order to close a customer.
This includes sales & marketing costs, infrastructure and resource costs, as well as overheads and taxes.
Your CAC should merely be a fraction of the CLV (Customer Lifetime Value) and even the customer contract value.
- Customer Relationship Management (CRM): The CRM is an application which helps businesses automate and thus improve their relationship with their audience and customers.
CRMs are essential for an aligned marketing, sales and customer experience strategy. Here’s why.
- Customer Success: This refers to a strategy as well as an approach that businesses take in order to ensure good customer experience.
Growing brands have a separate department to handle customer success, which is in fact helping customers make the most of their products and services.
D
- D2C: Like B2B and B2C, D2C is a sector and a business type that stands for ‘Direct-to-Consumer’.
Homegrown brands and some small businesses are examples of D2C brands.
- Data Mining: Data mining is the process of collecting and extracting information from available sources.
Businesses deploy data mining executives to build databases of prospective customers.
- Deal: A deal happens when both parties involved in the transaction come to use a product or service.
- Decision Maker: A decision-maker is a person who holds the authority and responsibility to make the purchase of your products and services for their organization.
- Deferred Revenue: Deferred revenue or payment refers to a situation when you have received a payment for products and services that are to be delivered in the future.
- Direct Sales: Direct sales indicates the sales closed by sales reps working directly with your organization, without having to pay any additional commission.
- Discount: Discount is a strategy salespeople use which includes waiving off a particular amount from the actual product price, in order to acquire customers.
- Discovery Call: A discovery call, also known as a pre-sales call, is essentially the first conversation that happens between a sales person and a prospect, after the prospect has expressed interest in purchasing your product.
E
- End of Day (EOD): End of Day refers to the end of a business day, which can vary based on different time zones and factors.
- Engagement: Engagement indicates a two-way interaction between the customer or prospect and the sales person, which further defines their relationship and customer experience.
- Escalation Matrix: An escalation matrix is a system or a process in place that defines when an escalation should happen in a customer service journey, how it should be handled, and who it should be directed to.
F
- Features/Modules: Features and modules are a part of the product a brand is selling. These features and modules simplify the users’ tasks.
- Field/Outbound Sales: Sales conducted outside the office premises, and on-location of your prospects, are defined as outbound or field sales.
- Flywheel: A flywheel represents a sales funnel, where prospects go through stages like attract, delight and engage in a continuous manner.
This is a step up from AIDA where the prospect goes through it just once, whereas flywheel indicates that it is in fact a continuous process to keep your customer happy.
- Follow Ups: Follow ups are activities performed to keep your prospects engaged to ensure that they don’t forget about your offerings.
Follow ups are taken with a purpose to remind them to buy from a brand.
- Forecast: It is the process of determining an estimate of future sales and the revenue that would be generated from it.
- Forward Revenue: Forward revenue is found in your transactions, which indicates the revenue that would be earned in the future.
- Free Trial: SaaS brands provide a free trial of their products, where a prospect can try their product for free, without investing any money. This is done to help them understand and evaluate the system better.
- Fresh Sales: Fresh sales refer to the unique sales closed in a particular time period.
G
- Gatekeeper: A gatekeeper is a term used in cold calling, which refers to someone who stands between a salesperson and the decision maker. Gatekeepers have to be handled in a different way to gain access to the actual prospect.
- Go-to-Market (GTM): The go-to-market or GTM is a strategy that brands practice in order to gain traction for a new product or service. It is vital to have a strong GTM in order to avoid a failed startup.
H
- Hard Sell: Hard sell is an approach sales reps take to selling aggressively, in order to close the sale in a short period of time.
Hard sell also falls under the push mechanism.
- Hot Leads: Sales reps usually categorize prospects based on the possibility of converting them into customers.
Hot leads are those having the highest chance.
I
- Ideal Customer Profile (ICP): Also known as Lead Profiling or Prospecting, ICP is the process of building a hypothetical, fictional profile of your ideal customer, which helps you segment and fixate your marketing efforts better.
When you sketch your ideal customer, you need to consider how your solutions will benefit them, and if they would be willing to invest in them.
- Inside/Inbound sales: In contrast to Outbound/Field Sales, inbound sales are those that happen inside the premises of your organization (not literally).
The customers you win from the prospects that expressed interest in purchasing from you are considered a part of inbound sales.
- Intent: An intent is loosely connected with the purpose with which a prospect comes knocking on your doors.
It can either be to understand more about your offerings, or make a purchase, or just to window-shop.
K
- Key Performance Indicators (KPIs): KPIs are metrics that help you measure and analyse your current performance, compare it with previous time periods, and build a better strategy to meet your goals.
- Knowledge-base: The knowledge base is a system in place that helps answer a majority of questions your prospects and customers have about your offerings.
A knowledge base is often the first-place customers are directed to if they face any queries or troubles while using your product.
L
- Lead Generation: Lead generation is the process of acquiring prospects to purchase your products or services by means of marketing and outreach.
- Lead Nurturing: The act of engaging your prospects with different activities throughout their journey with your brand, with a sole purpose of retention is called lead nurturing.
- Lead Scoring: Lead scoring is a technique or methodology sales and marketing teams follow to predict the relevance and worthiness of a lead.
This scoring ideally happens according to various criteria and parameters set, such as the BANT framework, intent and more.
- Leads: Leads, or prospects, are those who have expressed interest in buying and engaging with your brand.
- Lifecycle: Lifecycle, or lead lifecycle is an approach that helps brands map the entire journey of a prospect to becoming a loyal customer.
Brands use this approach to execute well-thought-out marketing campaigns and customer experience strategies.
- Lifecycle Stage: A lifecycle stage is defined as the state of a prospect in their lifecycle and buying journey.
Are they just exploring? Or genuinely interested in purchasing from you? Or do they not fit into your ideal customer profile?
All of these define a lifecycle stage, which are managed beautifully in a CRM.
- Lost Lead: A lost lead is the one who is no longer interested in engaging with your brand.
Reasons can be: pricing, availability of a better product, their experience with you so far, or something else.
M
- Mark Up: Mark up is an amount, either flat or percentage amount that you add to your product pricing to make money.
Say, your product costs USD 70, but you are selling it at USD 150, then USD 80 is your mark up. Generally, this markup adds to the profit margin and the revenue you earn.
- MOFU: MOFU, or ‘Middle of the Funnel’ is at the center of the awareness funnel which consists of an audience that is somewhat aware of your product, but is willing to know more and eventually, pay for it.
MOFU may also include those who have previously used or engaged with your competitors, and are looking for a better alternative.
- Monthly Recurring Revenue (MRR): Just how I explained about Annual Recurring Revenue (ARR), if you calculate it monthly, it becomes MRR.
Monthly Recurring Revenue or MRR is calculated as the revenue you generate every month from all active subscribers. Brands in SaaS should keep up with this metric.
- MQL: MQL or ‘Marketing Qualified Lead’ is a lifecycle stage where the prospects may not show signs of buying from you, but they’d definitely want to listen from you from time to time.
Keeping MQL leads engaged and nurtured with emails, follow ups and insightful content would turn them into probable customers.
N
- Negotiation: Negotiation is a step in the sales process or rather a process on the whole where sales reps and the prospects agree to mutual payment terms and deliverables of the entire contract before they become your customers.
It is a crucial step, since it determines the trajectory of your business and customer experience.
P.S Not to brag, but I am a PRO at negotiating. It is an art, I tell you. 😎
O
- Objection Handling: Objection handling is a stage of addressing and answering all concerns and questions a prospect may have for your product/s.
A sales rep thus “handles” these doubts in a way that instills confidence and trust for your brand in the prospect’s mind. Nail this stage and you score a customer.
- Onboarding: Onboarding is a process that technically falls between the sales and customer experience stages (departments).
New customers are made familiar with your product, their dedicated account managers and even trained to use it effectively in onboarding. It is just like onboarding new team members to your family.
- Opportunity: Opportunity is one of the lifecycle stages, that comes right before a prospect becomes your customer.
It indicates that you now have an opportunity to earn revenue from that prospect.
P
- Paid Invoice: Paid invoice is what you send to your new customers once they process the payment for their purchase.
- Pain Point: A challenge or a problem your audience faces is referred to as a pain point, which is then solved by your products and services.
For example, our audience faces the problem of stagnant or no growth, or dealing with multiple vendors and unorganized operations before they find their solution in TCC.
- Payment Terms: Simply put, the terms you set out for your customers in order to simplify and speed up the payment process are payment terms.
- Point of Contact (POC): A point of contact acts as a middleman between two parties.
They are responsible for getting clear communication and understanding among the stakeholders with an end goal of meeting expectations.
- Pricing: The pricing is the amount you levy on your customers for your products and services.
- Pro rata: Pro rata is generally a term and methodology for charging customers based on the intensity or frequency of the use of your product.
Say, your customer signs up on 20th of a month, and your billing cycle generally starts on 1st of every month, then you would charge your customer on pro-rata basis from 20 to end of that month.
- Product Demo: A product demo or demonstration is the process of explaining your product along with its features and benefits to prospective customers.
SaaS brands leverage from these product demos by getting familiar with their leads and establishing a rapport with them.
- Profit Margin: A profit margin is a metric that tells if the brand or the product makes money, or if it is even capable of making money.
It is the difference between the cost of selling a product and that of producing it, in layman terms.
- Proof of Concept: Proof of concept is a demonstration of your brand and the product’s ability to make a difference for your customers.
It is a representation of your potential, which also establishes your credibility for prospects.
- Proposal: A proposal is a document or a plan that contains the value proposition and exact offerings to the prospect from your brand.
Ideally speaking, the lead should accept the proposal before moving ahead with other steps.
- Purchase Cycle: The purchase cycle, also known as the procurement cycle, is what a business goes through while transacting with any third-party vendor.
Because startups and SMEs don’t have a big budget for vendor investments, their purchasing cycle is short and to the point.
In SaaS terms, a purchase cycle is the time between the day a lead is generated and becomes a customer.
- Purchase Order: A purchase order is an official document sent by a buyer to a seller, including details of the product they are interested in purchasing, and requirements they are wishing to be fulfilled.
It is similar to a buyer rolling out a tender to procure resources for a project.
Q
- Quarter: A quarter is four equal parts of something, usually a time period.
For example, a year is divided into four quarters.
- Queries: Prospects raise queries related to your product, which when answered, simplifies making a decision for them.
R
- Referral: A referral is a lead that you receive from your existing customers through word-of-mouth recommendations.
- Repeat Sales: Repeat sales are simple to understand. They indicate your existing or past customers coming back to you for a purchase.
The higher your repeat sales, the better your brand credibility and reputation.
- Retention Rate: The retention rate is the percentage of customers who continue to use your product or service after and over a given period of time.
Say, you have 10 customers by 2022, and of those, 5 customers continue using your services by the end of 2023, then your retention rate is 50%.
- Return on Investment (ROI): The return on investment is defined as the ratio (percentage) of the profit or loss against an investment.
Say, your initial investment was USD 100, and you earned USD 120, with a net profit of USD 20. The ROI in this case would be 20%.
- Revenue: Revenue is the money you receive from your customers, partners and other stakeholders.
S
- SaaS: Software as a Service is a business model brands use to sell their cloud-based products and services on a subscription basis.
- Sales Automation: It is a process that digitizes and automates the repetitive tasks of a sales team, which fuels simpler yet effective sales cycles and customer journeys.
Tools like CRM, lead gen software and messaging systems enable sales automation.
- Sales Consultant: A sales consultant is an individual or an organization responsible for helping you implement business development strategies.
A sales consultant works with your team, trains and even mentors them with an end goal of boosting your sales numbers.
Do you know: TCC is a sales consultant.
- Sales Enablement: Sales enablement is the process of providing tools and resources to nurture and help your sales team perform better.
Collaterals like presentations, brochures, automations are some examples of sales enablement.
- Sales Funnel: A sales funnel is the journey or touch points leads go through while on their way to become a customer.
The TOFU, MOFU and BOFU are the three primary stages of a sales funnel. Brands implement a dynamic marketing strategy for leads at each stage of the funnel.
- Sales Pipeline: A sales pipeline is similar to the lifecycle stage of a lead. Sales reps use this term and the pipeline while they handle and nurture a lead to become a customer.
- Sales Pitch: A sales pitch is what the sales reps present to a lead to explain the benefits, USPs and features of the brand and the product they are selling.
- Sales Process: A sales process is a bunch of pre-defined steps sales reps take to complete their sales cycle and accomplish their goals.
- Sales Strategy: A sales strategy is the approach and plan that is executed in coordination with the entire organization to meet overall targets and raise the bottom line.
- Sales Training: As the name implies, sales training is the process of educating and guiding the sales team with necessary steps, the strategy and approach they should follow to ensure that the brand’s standards are met to achieve the sales targets.
- Segmentation: Segmentation is the process of dividing and categorizing the data (here, your audience) into small, targeted groups to align your marketing efforts in the same direction.
- SLA: SLA or the Service Level Agreement is a document that contains the list of deliverables, roles and responsibilities of the buyer and the seller alike, as well as the essential clauses to see the contract to fruition.
- Smarketing: Smarketing is a combination of Sales + Marketing; a concept framed to bring both the fields together for the greater good of an organization.
- SME: ‘Subject Matter Expert’ (SME) is an individual who is well versed in a particular topic or subject, and is generally the go-to person for technical assistance or otherwise for teams.
- Social Selling: Social selling is the application of using your personal brand on social media and establishing a dialog with your audience with the purpose of selling your product.
- Soft Sell: On the contrary to hard selling, soft selling is the approach sales reps take where they don’t actively use the push mechanism and pitch the product hard.
Rather, the approach is subtle, and passive, with a focus on relationship building.
- Sound Bite: Sound bite is referred to as the common phrases and terms sales reps use to make their point while talking to leads.
- SQL: SQL stands for ‘Sales Qualified Lead’. It is a lifecycle stage that comes right after MQL, meaning, once a lead is ready to hear from you on a regular basis, the probability of making a sale to them increases.
T
- Targets: Targets are the goals set for individual team members and the entire sales department, which are in line with the total business goals.
- Ticket Size: The ticket size is defined as the total amount a customer is spending in their entire journey with your brand.
If a brand sells multiple products, each product would contribute with a separate ticket size.
- TOFU: TOFU, or ‘Top of the Funnel’ is the audience that stands at the top or the highest position of your sales and awareness funnel.
They are the ones who are completely aware of their pain points, your product and what you can offer to them.
U
- Unqualified Lead: An unqualified lead is someone who is not qualified or fit for your product or services.
It is rightly said that not everyone from your target audience can be your customer. Those are unqualified leads.
- Upselling: Upselling is the approach of selling a better and higher-end version of a product or service than what the lead came looking for.
People would say that it is just another way to earn more money, rather, it is the idea of offering something for the lead’s benefit.
- USP: USP is a brand and product’s ‘Unique Selling Point’, something which sets you apart from others in the market.
This is also what attracts your audience to you, primarily.
V
- Value Proposition: A value proposition can be something as simple as a statement which states the value or the benefit a prospect would get from your product or service.
W
- Warm Leads: Warm leads are those who fall between cold and hot leads, who are neither completely excited about buying from you, nor believe in giving you a cold shoulder.
It doesn’t take more to turn a warm prospect into a cold or a hot one.
- Warm Up Call: A warm up call is a call to touch base with a lead who has had prior contact with your brand.
- White Label: White label is a term when products are sold, not under the manufacturer’s brand name, but under a third-party.
Takeaways
Pheww! That’s all I know about sales terms.
Too many, and I am not even 10% done. Don’t worry, I won’t bore you with any more now.
Hope these sales jargons and definitions help you out when you seek answers.