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73 Crucial Sales Terms: Definitions and Examples
Written by: Victoria Yu
Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on July 12, 2023
73 Crucial Sales Terms: Definitions and Examples
The sales world is vast, complicated, and utterly confusing, further compounded by the fact that everyone seems to have their own definition for certain terms or use different terms interchangeably. Even experts get confused, so it’s no wonder newcomers might be baffled by the mileage and tonnage of sales terms and definitions.
That’s why we’ve compiled a comprehensive glossary of 73 crucial sales terms, complete with definitions, examples for more complex terms, and synonyms. Hopefully, you’ll walk away with a more thorough understanding of sales terminology so you can read reference materials and participate in discussions like a sales pro.
Your Sales Team
Terms relating to your employees.
- Sales representative – An employee in your sales department who sells your product or service and represents your company. Sales representatives usually nurture leads and close sales. Also called a sales rep, sales agent, sales professional, or salesperson.
- Sales development representative (SDR) – A sales rep that only focuses on the first part of the sales process (identifying and qualifying new customers) rather than taking them all the way to close. Focuses on qualifying inbound leads.
- Business development representative (BDR) – A sales rep that only focuses on the first part of the sales process (identifying and qualifying new customers) rather than taking them all the way to close. Unlike SDRs, BDRs focus on finding, prospecting, and qualifying outbound leads.
- Sales leader – An employee who recruits, trains, and manages your team of sales reps, and oversees the team’s goals and processes. Also called a sales manager.
- Field sales representative – A sales rep who travels out of company premises to visit potential customers and sell to them in person. The opposite of an inside sales representative.
- Inside sales representative – A sales rep who stays within the company grounds and sells to potential customers remotely through phone, email, or online channels. The opposite of a field sales representative.
Terms for managing your sales department, communicating your sales strategies, and analyzing your sales department’s effectiveness.
- Business-to-business (B2B) sales – Companies that sell products and services to other companies rather than to end consumers.
- Business-to-customer (B2C) sales – Companies that sell products and services directly to consumers.
- Sales methodology – A department-wide philosophy that guides your sales reps’ actions. Using a sales methodology ensures that your sales actions and processes match your sales goals and the persona you want to display to customers. Companies often have different sales methodologies for different stages in the sales process.
- An example is the conceptual selling system, the idea that customers buy the concept of a solution. Using this sales methodology, a company’s sales reps would focus their sales conversations on uncovering the unique concept each customer has of the product and match their pitch to the vision of the solution the company has. This would be opposed to a product-based sales methodology that focuses on a product’s concrete features and attributes.
- Account – The collected profile and records of a single customer or business client. Includes their contact information, transaction history, preferred services, and more. An account can be made before or after a sale.
- Account-based selling (ABS) – A sales strategy that targets one specific high-value account (customer) to drive sales rather than attempting mass selling. A related term is account-based marketing.
- For example, if you were selling chocolates in person, an ABS sales strategy would be to directly approach your chocolate-loving uncle, who’s likely to buy a few boxes on the spot. This is opposed to a general sales strategy of setting up a sidewalk booth for any passersby to purchase chocolates.
- Customer lifetime value (CLV) – A projection of how much total revenue a customer will generate for a business throughout their relationship. Mostly used for subscription-based product models, but can also be used as a way to represent customer loyalty and repeat purchases.
- For example, a company usemight invest more in retaining customers with a high CLV (based on their spending patterns) and implementing loyalty programs to keep them coming back rather than focusing marketing on less profitable customers.
- Closed opportunities – How many deals sales reps have processed, whether closed-won (the sale was made) or closed-lost (the sale was not made).
- Key Performance Indicator (KPI) – A quantifiable metric used to evaluate a business’s progress toward its goals. What KPIs a business tracks varies by its goals, but some common sales KPIs are sales volume, sales revenue, and conversion rate.
- Conversion – When a lead or customer completes a desired action that moves them further down the sales funnel, such as clicking on your advertisement or making a purchase. Conversion is usually described using a conversion rate, or the ratio of conversions to the total number of leads in that category.
- Sales playbook – A collection of practices, resources, and information that guides sales reps through the sales process. A sales playbook standardizes rep actions and makes them more efficient.
- Sales script – A predetermined dialogue, guide, or framework that shapes sales reps’ conversations with customers. A company usually has several sales scripts for sales reps to use at different stages of the sales process and for different products and customer segments.
Now we’ll look at different names to define the customer, customer traits, and types of customers.
- Lead – Any potential customer for your business. Leads are described as a cold lead if they’re not very likely to make a purchase, a warm lead if there’s a possibility, and a hot lead if they’re highly likely to buy.
- Inbound lead – A lead who initiates first contact with your business and is interested in learning more about your company and product. Inbound leads result from good marketing and promotion tactics that entice customers and encourage their curiosity.
- Outbound lead – A lead that your company discovers, researches, and initiates first contact with. Unlike inbound leads, the potential customer isn’t aware of your product before the sales rep reaches out to them through phone, email, or online messaging.
- Sales prospect – A lead who is qualified (judged) to be a little more likely to make a purchase based on certain company-specific criteria. Your company has likely established a relationship with them and is working to move them through the sales funnel. Also called a prospect. See sales qualification for more detail.
- Sales opportunity – A sales prospect with a very high chance of closing a sale.
- Ideal customer profile (ICP) – A description of the ideal customer for your business. Includes factors such as budget, location, company size (for B2B businesses), demographics (for B2C businesses), behaviors, and pain points.
- Buyer persona – A semi-fictional personification of an ideal customer for your business used to help marketers and salespeople make more human and appealing promotions and content. Beyond your ideal customer profile, your buyer persona should have a specific name, hobbies, and job title – they should feel like a real person to your staff.
- For example, if you sold sneakers, your buyer persona could be a 35-year-old man named Steven who works as a financial advisor, has low-arch size 10 feet, runs as a hobby, and wants to be one of the first 50 people to finish in an upcoming marathon.
Marketing and Lead Generation
- Lead generation (lead gen) – The process of identifying, attracting, and nurturing potential customers to your business with hopes of making a sale.
- Inbound lead generation – A type of lead gen where a company promotes itself to attract customers and get them to make first contact, usually through website optimization, social media, search engine optimization, and advertisements.
- Outbound lead generation – A type of lead gen where a company researches and reaches out to customers first, usually through cold calling, email marketing, and door-to-door sales.
- Prospecting – The process of identifying and contacting potential customers, usually on a one-to-one basis, with the goal of making a sale. Also called sales prospecting.
- Business proposal letter – A formal document sent to prospective clients or business partners explaining why they should do business with your company. Used in formal collaboration proposals and larger contract deals.
- Cold contacting – When a business sends unsolicited messages to a lead. Usually takes the form of cold calling, cold emailing, and cold messaging through social media platforms.
- Lead generation funnel – A framework to describe your lead generation process, expressing how a potential customer becomes aware of your company and expresses interest before being moved through to the sales funnel.
- Conversion path – The steps a person takes to become a lead from the customer’s point of view.
- Lead magnet – A tool used in a lead generation funnel. A piece of valuable content, such as an article, discount, or tool, offered to leads online in exchange for their contact information so marketers can follow up with them and nurture their interest.
- Content marketing – The creation and sharing of online material that doesn’t explicitly promote the brand, but encourages viewers’ interest in the company’s products and services. Some examples of content created and marketed are videos, blog posts, and social media posts.
- Referral marketing – When current customers promote your brand to their friends and family, usually in exchange for rewards in a company’s referral program.
- Influencer marketing – A partnership with an online influencer who promotes your company and products to their own audience. Influencers usually have thousands of followers who are willing to buy what the influencer recommends, so influencer marketing can be an effective way to gain credibility and spread awareness of your brand.
- Social proof – The concept that consumers are more likely to trust the word of other consumers rather than the word of a business. Social proof explains why referral marketing and influencer marketing are so much more effective than traditional advertisements.
- Lead management – How a company identifies, nurtures, and manages leads until they make a purchase.
- Lead distribution – How a company assigns incoming leads to sales reps. Effective lead distribution management ensures that only one rep is assigned to a single lead, and that leads are followed up on in a timely manner.
- Lead qualification – The process of evaluating a lead based on a certain set of criteria to judge their likelihood of making a purchase. Usually involves matching them to your company’s ideal customer profile and the BANT framework.
- BANT Framework – A shorthand for Budget, Authority, Need, and Timeframe, four common criteria businesses use to determine a lead’s likelihood of making a purchase.
- Lead scoring – The process of assigning numeric scores to your leads depending on how qualified they are. A way of prioritizing leads that are most likely to result in a sale.
- Qualified lead – A lead who meets some of your company’s lead qualification criteria. Synonymous with a sales prospect.
- Marketing qualified lead (MQL) – A lead who has interacted with a company’s marketing materials and is judged by the marketing team to be likely to become a customer.
- Sales qualified lead (SQL) – A potential customer who expresses an interest in purchasing from the get-go and has a strong chance of making a purchase. However, they still need to be qualified further to ensure their needs match the product.
The Sales Process
These next terms describe activities and tools a business uses to get a lead to make a purchase.
- Sales process – The concrete and repeatable actions sales reps take to nurture a lead to a sale.
- Sales cycle – The process of converting a single lead or prospect into a paid customer.
- Sales pipeline – An visual representation of a company’s sales actions, tracking leads as they progress through the sales process and describing how sales reps can move them to a sale.
- Sales funnel – A model of your customer journey from beginning to end, showing how many leads are at each stage of the sales process. Generally has three stages: TOFU, MOFU, and BOFU.
- Top of the funnel (TOFU) – The beginning stage of the sales funnel where consumers are aware of your company.
- Middle of the funnel (MOFU) – The middle stage of the sales funnel is where consumers consider your company’s products and evaluate if it matches their needs.
- Bottom of the funnel (BOFU) – The final stage of the sales funnel, where consumers complete their purchase and become paying customers.
- Objection handling – Alleviating any questions and concerns a potential buyer has about purchasing. Buyers usually raise objections regarding the BANT criteria.
- Pain point – The specific problem a consumer faces that a company hopes to help them resolve by purchasing their product.
- Closing technique – How a sales rep asks a potential customer if they’ll make a purchase. Closing techniques vary in how aggressive or passive they are, known respectively as hard closes and soft closes.
- For example, a hard closing technique would be directly asking the prospect, “Will you buy this today?” A soft closing technique is the assumptive close technique, where the rep progresses the conversation as if the customer has already agreed to purchase, such as by saying, “Would you like this in red or blue?”
- Customer relationship management (CRM) – The strategies, processes, and tools a company uses to track its lead and customer data through the marketing, sales, and customer service processes to personalize and optimize each interaction and create positive customer interactions. CRM software systems track a lead through the sales process, help sales teams manage leads, and act as archives for all customer data.
- Collaborative CRM – A CRM system focused on breaking down information silos and facilitating communication between different company functions.
- Analytical CRM – A CRM system focused on collecting and mining customer data to make projections about customer behavior and lead fit.
- Operational CRM – A CRM system focused on using automation and data management to handle repetitive tasks. For example, an operational CRM could draw from its customer database to pre-populate forms or automatically move prospects down the sales funnel based on certain actions they take.
- Cloud-based CRM – A CRM system hosted and maintained by the CRM vendor, rather than on the client company’s premises.
- On-premise CRM – A CRM system hosted and maintained by the purchasing business as a long-term investment. Though less flexible than cloud-based CRM, it has perks in security and reliability. It can also be spelled as on-premises CRM.
- Supplier relationship management (SRM) – The strategies, processes, and tools a company uses to track its relationships with suppliers, objectively ranking and determining a supplier’s value to a company so the business can optimize its supply chain.
- Enterprise resource planning (ERP) – A shared database of operational and financial information spanning almost every business function from production, order fulfillment, accounting, sales, and more. ERPs manage the flow of goods and connect them to company financials, providing a birds-eye view of all of a business’s activities.
- Marketing automation – A software tool that automates monotonous marketing work such as email marketing, social media posting, or ad campaigns. Usually comes as a feature or tool in a CRM system.
- Business intelligence (BI) – Strategies and technologies used to analyze business information and present it in easy-to-read reports, graphs, dashboards, and charts to enable decision-makers to digest information faster and make more knowledge-driven decisions.
- Ad-hoc reporting – A business intelligence tool where reports are generated on request as needed by users, usually to uncover the results and aftereffects of a certain key event.
- Cross-selling – Selling a different product or service to an existing customer, usually goods that are complementary to their original purchase.
- Upselling – Encouraging customers to buy a higher-end version of the product they intend to purchase.
- Net promoter score (NPS) – A measurement of how loyal a customer is and how likely they are to recommend you to another consumer. Scores range from -100 to +100.
- To calculate your NPS, first ask customers to rank how likely they are to recommend you on a scale from zero to ten. Calculate the percentage of promoters (people who answered nine or 10) and the percentage of detractors (people who answered six or less), and subtract the percentage of detractors from the percentage of promoters to find your NPS.
- Onboarding – The process of setting up and familiarizing a new customer or client with their purchased product or service and ensuring that they can implement it properly. Also used to describe the hiring and training of a new sales rep.
- Support ticket – One interaction between a customer and a service representative. Used by businesses to track and manage individual customer support cases. Also called a work ticket, service ticket, or work order.
- Escalation – The process of transferring a customer support ticket to a customer service agent with more seniority, authority, or specialized skill because the first responder agent is unable to resolve the customer’s issue.
- Customer success – Ensuring customers reach their desired outcomes when using a company’s product or service by anticipating customer challenges and questions and preemptively providing solutions. A sales methodology used to reduce the need for customer support by designing the product and sales process to resolve customer issues before they can arise.
Sales is a large and complicated industry, so it makes sense that there are thousands of different words used to describe its activities and management. Though this isn’t an exhaustive list by any means, hopefully these definitions and examples have given you a thorough understanding of the sales basics so you can expand your sales vocabulary, increase your knowledge base, and manage your sales more effectively.
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