Using the right vocabulary is one of the most important parts of good communication. When pitching to a customer, or presenting to your boss, using apt terms makes you a better presenter. The world of terminologies is overwhelming, especially that of sales. Knowing the right usage and context for each term and being able to recollect them at the last minute can get tricky, so we are here to make it a little easier for you. Here are some of the most common and uncommon terms and what they refer to in the domain of sales. Be it strategies or numbers, we got your back.
Generic Sales Terms –
- Discovery call – This is the first conversation a sales person has with their lead/prospect to identify the need or pain points and figure out a product / service from their portfolio that could address their problem. This involves a lot of probing and qualification of the lead.
- Positioning Statement – How a product / brand solves the consumers problems or improves their life or business.
- Value proposition – Why a given product or service or brand should be selected by the prospect or customers over other competitive offers. It includes the benefits(tangible and intangible) delivered to customers.
- Sales Funnel –A marketing term used to capture and describe the journey that potential customers go through, from awareness of your brand to interest to negotiation to purchase decision and renewals.
- Sales Cycles – A sales cycle is a series of events or steps sales people follow to make a sale. It is from finding leads to qualifying them, presentation, objection handling and closing.
- Closed Won – When a sales representative closes a deal and succeeds, it is considered a successful closed won.
- Closed Lost – When a prospect formally confirms their intent to not go ahead with the deal, then it is considered a closed lost opportunity. Here, the decision of the prospect could be for the time being or may be forever, and the reasons could be either from prospect side or from the seller side.
- Closing Ratio / WIN rate – As a term used generally to evaluate the performance of sales representatives, it is the ratio of the number of deals closed to the number of prospects in hand (Number of closed wins). This ratio can also be used to predict and forecast sales performance.
- B2B Sales – When a business sells to another business, it is called a B2B sale. The decisions here are more complicated, and sales representatives follow a more relationship-building-based approach owing to the business growth graph.
- B2C Sales – In this model, a business sells directly to the customer. Sales representatives follow a selling approach and observe more impulsive, simple approaches from buyers.
- Deliverables – It is a project management term used by clients regarding the output your product or service or projects delivers upon the competition of purchase. Deliverables could be tangible and intangible but are quantifiable.
- Service Level Agreement (SLA) – It is a contract between a service provider and customer defining the types and standards of services to be offered
Buyer/Lead related terms
- Lead Conversion – It refers to the process by which a lead is converted to a prospect (opportunity) Tools like the sales funnel are used to execute the process of lead conversion.
- Lead Scoring – It is the process of ranking leads based on the value they can add to the business. Sales reps use this to allocate their time, resources, and strategic approaches to optimize their efforts in acquiring and converting leads.
- Buying Criteria – This term refers to the estimation of a customer buying the product to address a particular need. Understanding the buying criteria helps the sales teams to anticipate questions and prepare for selling them.
- Buying Intent – It is the process by which sales teams measure the probability of a lead turning into a customer within a certain time.
- Buyer Persona – It defines the profile of the ideal customer of your business. For example, if you are running a business that sells protein powder, your ideal buyer can be a 35-year-old adult who works out regularly and maintains protein intake, etc. This persona is an important part of defining marketing strategies and target audiences.
- Churn Rate – This term refers to the calculation of customers lost over a period divided by the number of customers present at the beginning of that period. The churn rate is used to calculate and estimate the business being lost.
- Buying process – Defines the process of a buyer identifying a problem, understanding the available market options, and deciding the buy. The stages are named Awareness, Consideration, and Decision Making, leaving room for sales representatives to use different strategies based on the stage.
- Gatekeeper – A person who decides which information reaches the decision-makers. Sales reps often work on strategies to get through to the decision-makers by convincing/winning over these gatekeepers
Sales Strategy Terms
- BANT Framework – Used by sales teams to determine if the lead is worth pursuing
B – Budget – To determine the financial capability of the business
A – Authority – To identify the right decision-makers
N – Need – To understand if the business needs our product
T – Time – To estimate the timely purchase by the buyer
2. A/B Testing – It is a comparison method of sales data used to determine and qualify leads and which factors influence the sale.
3. Account Based Selling – It involves a customized approach followed by sales reps to target a particular lead and sell the product to address a specific need. Generally done in the case of large enterprise prospects.
4.Challenger Sales Model – This is an approach where the sales team follows an authoritative approach to convince the customer that they need a particular product.
5. Social Selling – Using social media platforms like Facebook, LinkedIN, Twitter, etc. to build relationships as part of the sales process.
6. Bluebird Sales – An unexpected/easy sale that does not demand great efforts from the team, usually observed in inbound marketing.
7. Consultative Selling – This strategy concentrates on building a relationship with the customer and overselling to them. Sales reps usually follow a customer-first approach in this strategy.
8. Conversion Path – It defines how a lead is converted into a customer, irrespective of the stage and approach.
9. Up-Selling – Sell a better version or product to an existing client while generating increased business.
10. Cross-Selling – This strategy is used to address more than one need of the customer at any stage of the deal and sell more than one product or service to the customer.
11. Sales Enablement – For a sales organisation, it is the process of equipping sales people with right strategies, training, tools, content and other resources that help them sell better and smarter for increased closings.
Sales Metrics Terms –
- Annual Recurring Value (ARV) – As a huge asset to long-term planning, this value determines the growth of the subscription and recurring revenue of a business.
- Monthy Recurring Revenue(MRV) – Predictable revenue expected each month from a customer
- Annual Contract Value (ACV) – It is the average annualized revenue per customer. It is compared with the customer life cycle value to check how long it will take to reach a break even with the customer acquisition cost.
- Customer Lifecycle Value (CLV) – It is the prediction of profit from a customer’s deal over a period. It is affected by various factors like CAC, Churn rate, etc.
- Customer Acquisition Cost (CAC) – The cost calculated in gaining a new customer to buy the solution. It is often used to understand the profit margins of a company.
- Lifetime Value – It is used to predict the net profit that will be gained through the entire journey with the customer. This metric is often used to compare profitability concerning the ACV.
- Sales WIN rate – Percentage of opportunities(prospects) converted into sales
- Net Promoter Score – The probability of a customer recommending your solution, which indicates customer satisfaction is called the Net Promoter Score. It is usually collected as feedback or a survey.
The greatest enemy of Knowledge is not ignorance, it is the illusion of knowledge.
Stephen Hawking
Will cover more terms in the next part. Until then,
