December 22, 2020

Your Essential Sales Glossary—The 99 Terms You Need to Know

The Ultimate Sales Glossary, The 99 Terms You Need to Know | Mixmax

What’s the ASP of a typical bluebird deal? Which comes first—the disco or the demo? Aren’t sure? Don’t be afraid to ask. There are a lot of sales terms and even advanced sellers who move roles or organizations can find themselves relearning, well, the ABCs of ABC.

Below, we’ve gathered the most useful sales terms and deleted the obvious ones. Think of it as a quick-reference checklist for when you receive a head-scratcher of an email from your VP of sales or a prospect.

What are sales terms? Here’s an entire glossary

ABC

“Always Be Closing.” An acronym from early door-to-door sales methodologies that encouraged sales reps to always be looking for an angle to close the deal. It was popularized by the classic 1992 sales film Glengarry Glen Ross. Today’s version might be, “Always Be Building the Relationship” but ABBTR seems less catchy.

ABM

Account-based marketing. A bit of a misnomer—it really should be “account-based sales and marketing.” In ABM, rather than each owning their own piece of the sales funnel, sales and marketing team up and work together on a small list of named accounts.

ACV

Average Contract Value. The average value of an average opportunity, which could include several products. 

AE

Account executive. An entry-level sales role. Some find the word “executive” in this title confusing, given they aren’t an executive leader, but there’s a reason for it. First, good ones really do act like the CEO of that account and their territory. And second, some studies suggest that the mild title inflation makes prospects feel they’re getting more attention. A similar thing happened in finance—go look up any financial firm and at least one-third of the employees are vice presidents. 

Related Post: The Driving Forces Behind Successful Sales

AIDA

Attention, Interest, Decision, Action. This acronym describes the stages of a sales cycle—you get someone’s attention, you get them interested, etc. Like ABC, it was also popularized in the 1992 film Glengarry Glen Ross.

AR/AP

Short for accounts receivable or accounts payable. Two departments within a company’s finance organization. The former is responsible for making sure they’re paid. The latter, that they pay others. (At smaller companies, one person or team could wear both hats, while at larger companies you can expect teams to be leveraging AP automation platforms to minimize errors of working with large sets of data.)

ARR 

Annual recurring revenue. The “recurring” part is important—this isn’t the total amount of money the company makes—it’s the value of all the contracts that continue until canceled. (It’s a very important term in software.)

ASP

Average Selling Price. The average cost of a product sold across a territory or organization. It’s different from the “average list price,” or the pricing on your website because most deals are sold with some kind of discount. You want to keep your ASP high—the lower it drops, the more deals you have to sell to hit quota.

At-risk

The portion of a salesperson's income that varies based on their sales. If a salesperson’s salary is $150,000 and half of it is at-risk, that means they get a “base” of a guaranteed $75,000 and an at-risk portion of $75,000. If they sell nothing, they still get the base. Base plus at-risk is known as OTE, or on-target earnings, which is their total compensation. 

Automation

This has a specific meaning in sales—it means “reducing workload.” As in, “I automated some of my outreach with email sequences and it’s saved me a lot of time.” For clients, it’s sometimes synonymous with “AI.”

Pro tip: Be careful—if you automate your emails but don’t personalize them, you’ll upset a lot of people.

CAC

Cost of Acquisition. This is how much you have to spend to acquire a lead or account. If you run $1,000 in ads and get 100 leads, your CAC is $10.

B2B / B2C / B2B2C

Business to business, business to consumer, and, a combination of the two, business to business to consumer. These are shorthand for a company’s revenue model: Do you sell to businesses? To consumers? Or to businesses that then sell to consumers, like a pharmaceutical brand that sells to drug stores who then sell to consumers? 

Explained: The business model matters because it tells you a lot about how the company operates and what types of solutions are likely to be a fit.

BANT

An acronym for Budget, Authority, Need, and Timeline. In older sales methodologies, these are considered the four criteria that tell you whether a deal will happen. As a rep, your job is to uncover the presence or absence of these elements. A deal with budget but no authority, need, or timeline is not a very sure deal. They’ll probably evaluate forever.

Bluebird

A sales term for a deal that flies in from nowhere. E.g. “Then, on the last day, I got a bluebird deal and hit quota.”

Burnt bridge

A relationship that has ended, often because you pushed too hard or something went wrong. 

Business unit

A partition of a company that functions like its own company. For example, the AI division of IBM is a business unit. It has its own sales, marketing, support, and operations. It reports up to the overall business’ executives. It’s also sometimes called a “line of business.” Don’t confuse business units with departments—sales is a department. An AI division is a business unit.

CAGR

Compound annual growth rate. A formula for calculating a company’s growth over several years that takes into account the compounding value of the investment. See Investopedia for more.

Channel sales (channel partner)

A sales process where rather than sell directly to customers (direct sales) you sell through partners, sometimes called “a channel.”  It’s a very different challenge: Rather than teach your salespeople to sell, your salespeople have to teach others to sell—say, mom and pop IT providers—and it’s a bit of a telephone game. 

COGS

Cost of goods sold. Basically, all the costs that went into selling something. If you sold a $24,000 software deal but paid the salesperson a salary and commission during that time, you’d subtract the salary and commission as a COGS.

Complex sale / transaction sale

A complex sale is one that’s unusually difficult, perhaps because there are many stakeholders, the buyers don’t like salespeople, or it’s highly technical. An enterprise CRM sale is a complex sale—there are thousands of dependencies and it could take years to complete. It’s the opposite of a complex sale is a transactional sale, where someone can buy over the phone using a credit card.

Challenger sale

A sale completed using the Challenger™ sales methodology developed by the analyst agency Gartner. It’s also a book. The gist of challenger sales is that you as the sales rep need to be brave and confident enough to challenge your customer’s thinking. You don’t just sell them what they think they need—you help them see their problem in a new light, speak truth to power, and earn their respect.

Challenger / champion test

A type of A/B test but where there’s an established A variant, such as a headline you’ve always used, and a new B variant, say a headline you just dreamt up. You pit the challenger against the champion to see if it’s better. The challenger must win by a reasonable margin, otherwise, the champion wins the tie.

Churn

The percentage or rate of customers that cancel your service within a given period, usually per month or per year. Churn is the opposite of retention. If you subtract your retention percentage from 100%, you’ll get your churn percentage.

Clawback

A commission payment you received that you have to pay back because the customer canceled the service early. E.g. “I had a clawback that month, so I actually owed the company money.”  

Closed-Won

A deal that you’ve won. “Closed-Won” is the name of the sales stage in the CRM Salesforce that you select when you’ve won a deal. 

CPC / CPI

Cost-per-click and cost-per-impression. These are advertising terms for how the advertiser is billed—either by the number of clicks the ad generators or the number of impressions. To spend your money wisely, measure clicks.

Cycle

Short for “sales cycle.” This is the same thing as a buyer’s journey or buying cycle—it’s the period of evaluation. It starts when an opportunity is opened in the CRM and ends when it closes. 

Going dark

Sales slang for someone not getting back to you. E.g. “She said she’d sign, then went dark.”

DBA

An acronym for “Doing Business As.” It’s an adopted name a company is using, either because they don’t want to go through the paperwork to change the original name, or because the new name isn’t available. Go to any tech company’s terms of service page and look at what they call themselves—it’s often “Company, Inc. DBA Something else.”

Deal

A sales evaluation. The term is inclusive of everything about the sales cycle—the products involved, the calls scheduled, the meetings held. E.g. “I don’t have enough deals in my pipeline.” 

Decision maker

The person responsible for deciding whether they buy or not. Often an executive who holds budget.

Demand generation (demand gen)

A method for generating inbound buyer interest and leads. Could involve advertising, blogging, syndicating content, etc. It means something slightly different to everybody, so always clarify.

Demo

Short for “demonstration.” Typically a 60-minute web conference or in-person meeting where you show in detail how your product works. It may include a mixture of presentation slides, videos, or live software demonstrations. You shouldn’t schedule a demo until you have BANT.

Disco

Short for “discovery call.” This is typically the first step in a real sales evaluation—the salesperson and prospect hop on the phone to talk through the prospect’s needs and the company’s capabilities.

Explained: You should be evaluating your prospect just as earnestly as they’re evaluating you. Might they actually buy? Are there any red flags? If you don’t qualify deals on your disco, you may wind up wasting a lot of time on demos that aren’t going anywhere. 

Direct mail

A physical piece of mail. Aka snail mail. The “direct” part differentiates it from “email” so nobody gets confused.

Drip campaign

An automated sequence of emails that are timed to go out after set periods, such as days or weeks. This is the basis of most email marketing. When someone signs up, your system sends them an email every two weeks.

EOD / COB

“End of day” and “close of business” respectively. They mean the same thing—the standard time that a business closes in that time zone, usually understood to be 5pm. 

EOM / EOQ / EOY

End of month, end of quarter, and end of year, respectively. These are significant because they’re deadlines for salespeople—get your deal in before EOM or EOQ so it counts. 

Equity

A financial vehicle that gives an employee fractional ownership in a company. If it gets bought or goes public, they may get bought out. We say “may” because it’s not a guarantee. Read your terms closely. “Equity” can mean different things and it’s not regulated.

Firmographic

The characteristics of a business. This is a combination of “firm” and “demographics.” It’s demographics, like title, location, or interests, but for a business. 

Fortune 500

Any company on the publication Fortune’s list of the 500 highest-earning companies. More generally understood to mean, “A large and prestigious business.”

Funnel (also sales funnel)

A theory on how sales and marketing operate that likens the process to a funnel that guides water into a container. It starts big, but tapers off. In the sales and marketing conception of the funnel, it’s understood that the narrowing means fewer and fewer prospects progress to the next stage, but those that do are increasingly qualified and likely to buy. With the rise of account-based marketing, funnels have become sort of political. E.g. “Please, do not give me any more of that funnel talk.”

Gatekeeper

A pejorative and dated term for the people who answer company phones, such as secretaries and personal assistants. From this viewpoint, they guard the gate to the decision-maker. It’s an outmoded term because, for decades, smart salespeople have known these people can be your best ally. Instead of gatekeeper, call them what they are—admin assistants or office managers.

General manager

The manager for a line of business, such as the auto-parts division of a large manufacturer. It’s somewhat in vogue to appoint general managers at tech companies. Rather than own a specific role like “head of sales,” they own the sales, marketing, operations, etc. for that business unit.

Go to market (GTM)

A fancy and somewhat overused term for a company’s strategy for how they sell things. Whether you offer a free trial, how you price, how your sales team is organized, and what marketing channels you use are all part of your GTM.

Pro tip: Saying "your go-to-market" can make you sound more senior on the phone.

Inbound / outbound

Inbound means a lead (or source of leads) that find you and want to talk. Outbound is the process of reaching out to prospects to see if they’re interested in talking. 

Inside sales / outside sales

Inside sales reps sit inside the building or home office and tend not to visit clients in-person. They rely on emails and phone calls and give demos over webconference. An outside sales rep spends most of their time out of the office meeting with customers. Outside sometimes carries a cachet, as enterprise sales reps are often outside sales reps.

Intent

Used in the context of sales or advertising, “intent” refers to someone’s revealed intent to purchase something. It’s an educated guess—you see that someone Googled a very specific keyword related to your product or downloaded an ebook on how to implement it, and you infer that it’s because they have intent. You can have broad intent or specific intent, say, if you’re interested in just one of several products.

ICP

Ideal customer profile or persona. This is the ideal person for you to sell to—somewhat of a mythical combination of all the best characteristics of your buyers. For instance, a head of marketing in the tech space with budget, authority, need, and timeline. Companies have several ICPs. (Also see: persona.)

IaaS / PaaS

Acronyms for “Infrastructure as a Service” and “Platform as a Surface.” Somewhat nebulous derivations of the core term “software as a service”—IaaS means it’s SaaS offering that supports other SaaS offerings (I know, right?), such as a cloud-computing provider. Amazon AWS is IaaS. Paas is a more advanced version of IaaS—it’s infrastructure that’s already pre-built. Think Salesforce’s Force.com platform, where it comes with pre-build modules and objects that you can arrange like digital legos.

IPO

Initial Public Offering. This is the first time a public company’s stock is offered—it’s a high drama affair where everyone celebrates at the stock exchange and gets their picture taken before a blowup of the company logo.

Explained: The IPO is what’s known in the investment world as a “liquidation event.” This means that all the investors who put money in, as well as all the employees who received stock, get “bought out” by the public market. Their shares or interest are liquidated into cash. Sometimes though, employee shares simply get converted into public stock. But it’s usually a big increase in value.

IVR

Interactive Voice Recording. These are those company phone trees that say, “If you’d like to hear our store hours for the ninth time, press one.” Companies use them to weed out busy people with little patience.

Key accounts

A short list of the most important prospective buyers a company can have. 

KPI

Key Performance Indicator. This is a metric or number you track because it’s key to your performance. It’s quite overused, however, and nowadays just means “metric.” 

Landmine

A piece of information you arm your prospect with that you know will make your competitor’s life difficult. For example, your prospect says they’re about to see a demo from your competitor and you say, “Remember to ask about their REST API” knowing full-well they don’t have one and that it will make things awkward. 

Lead

A prospective buyer and their contact information. Strong leads are ones that are highly likely to buy. Weak leads are the kind most of us get.

No-show

When a prospect says they’re going to attend a call but then doesn’t show up. See: Ghosting.

LTV

An acronym for “Lifetime Value,” where for some reason, the “t” is capitalized. This is the same thing as “customer lifetime value,” or CLV. The LTV is the total dollar value of an average customer over the span for which they remain a customer. You can calculate it by multiplying the average number of years a customer remains a customer by their spend each year minus the cost of acquisition, or CAC.

Nurturing

The marketing strategy of sending prospects or customers periodic emails or messages to keep you top of mind. Theoretically, it’s also supposed to educate them on why they should buy and when they’re warm, kick them over to sales. In reality, this is quite a difficult thing to do.

Explained: To see a nurture firsthand, go download an ebook or white paper from a business. You’ll likely begin to receive nurture emails from them.

M&A

Mergers & Acquisitions. A term for the process or habit of big companies buying littler companies. If your firm has a very active M&A team, you’re likely constantly acquiring other smaller companies. 

MQL

A Marketing Qualified Lead. Sometimes known as not a real lead.

MSA

A Master Services Agreement. This is one overall agreement the customer signs with your company that then allows them to purchase several products with less paperwork and hassle. Lawyers live to edit these.

MVP

Minimum Viable Product. This is a product that’s not quite finished, but is just enough for people to use to test whether there’s demand. Popularized by the famous startup book The Lean Startup by Eric Reis. Most times you hear “lean” in the tech world, this is what it’s in reference to.

New business

A deal from a company that isn’t a current customer. It’s the opposite of existing business, which is an additional purchase from an existing customer.

North Star

A single metric or KPI that all other metrics filter up to. In theory, anything that improves the North Star improves the company, making it more profitable, more stable, or more innovative.

NPS

Net-Promoter Score® is a trademarked name for a rather common thing: You email customers and ask them to rate you on a scale of 1-10. If they give you a 1-6, those are detractors. If they give you a 7-8, they’re passives. If they give you a 9-10, they’re promoters. To calculate your NPS score, subtract the percentage of detractors from the percentage of promoters. If positive, paste it on all your marketing. If negative, keep quiet or redo the survey.

Net-15/30/45

These are shortcodes for contract payment terms. “Net” means due, and the number is the number of days within which the payment is due. “Net-30” is the standard and means someone has 30 days to pay the invoice, after which, it’s considered past-due. 

Pro tip: Need to reach your client’s AP people? Send something with Net-0 terms. 

Objection

An argument a prospect gives you for why they can’t or shouldn’t buy. It’s somewhat outmoded to think about “overturning” objections as early sales methodologies did. Instead, think about reframing or addressing them. 

Org chart

Short for organizational chart. This refers to a diagram most companies keep that shows who reports to who.

Opportunity

A potential sale. Could also refer to an actual object within the CRM known as the “Opportunity Object.” When a sale begins, you “open” an opportunity in the CRM.

Pitch

An argument you make to a client for why your product is the right one, or why your company is one they’d want to partner with.

Procurement

A very particular type of person, sometimes an entire department, who prides themselves on making salespeople’s lives difficult. They exist to eliminate waste and ensure the company doesn’t buy anything frivolous, and if it must buy something, that it gets the best deal possible. There are few scarier words to hear from a prospect than, “I just have to send this through procurement.”

Prospecting

A blanket term for finding and reaching out to prospective buyers. Includes research, list-building, and sales outreach.

PQL

Product Qualified Lead. Same thing as a marketing qualified lead, or MQL, except it’s a lead that took a free trial of your product, has proven they’re a good fit, and exhibits behaviors that may indicate they might upgrade. A PQL is considered higher quality than an MQL.

POC

Proof of Concept. Prospects ask for this when they aren’t sure something is going to work, and don’t want to be stuck footing the bill. If your product is really easy to install and people tend to find value quickly, it could be a no-brainer, though it will delay the sale. If your product is difficult, you may not offer them, because you’ll lose too much money installing it only to have them cancel.

Explained: Prospects often ask for a proof of concept, but what they mean is a trial. A trial just means they get to get into the product and play around with it, and is something you could even do supervised over a webconference. Always clarify. POCs are expensive.

PO

Purchase Order. A formal request buyers at large organizations must make to allocate the money for a purchase. People will say, “I have to raise a PO for this.” 

Prospect

A potential buyer. 

QBR

Quarterly Business Review. This is a recurring meeting some success teams hold with their more valuable accounts to check, gauge whether they’ll renew, and, if possible, sell them more. Customers appreciate QBR because it shows that the company cares and often, they want to know they’re getting value out of their purchase.

Quarter

One quarter of the calendar year, or three months. The calendar year quarters are:

Q1: January 1 - March 31

Q2: April 1 - June 30

Q3: July 1 - September 30

Q4: October 1 - December 31

Not all companies operate on a calendar year. Some stagger their years so it’s easier to report their earnings. Always ask whether people are on a calendar year or not—it tells you when their deadline to spend their budget is.

Quota

The total dollar value, number of calls, or type of products that a salesperson must sell within a given period. For SDRs, quota usually means a total number of calls plus being attached to a specific number of Closed-Won deals. For an AE, it’s usually the total dollar value sold within a few categories, or buckets—for example, 80% of their quota must come from software and 20% from services. If they sell tons of software but no services, they can still miss quota.

Ramp period

A grace period for new sales reps to attain productivity, during which they aren’t held responsible for their quota. Or, more commonly, they’re only held responsible for a percentage of their quota, which rises each month until the ramp disappears and they’re suddenly on full quota and wishing that ramp was longer. Usually, you’re paid your full quota while on-ramp, as if you had sold that amount.

Redlines

Edits made to an agreement or contract, usually by a legal team. They used to mark up contracts with red pens, hence the term. Redlines are bad. Do all you can to dissuade redlines, because it means your lawyers and their lawyers will have to go back-and-forth. 

Pro tip: Tell your prospective buyer that before their lawyers can redline, they’ll have to hop on the phone with one of your lawyers to talk it through. This usually resolves most concerns and avoids a lengthy and sometimes heated back-and-forth.

Reference

A customer who’s willing to talk to one of your prospects to tell them that they like the services, and to answer questions. References are doing you a favor, so use them sparingly. Whenever you have a customer you sold to who’s very happy, ask if they’ll serve as a reference, It’s sometimes flattering. 

RFP / RFI

A Request for Proposal, or, the request that comes before it, a Request for Information. Big companies are often required to go through a procurement process and evaluate multiple vendors, and to remain impartial. First, they may send an RFI, to find out what vendors are out there. Then, they’ll send an RFP, which is them asking you to spend a tremendous amount of time answering the same questions as every other vendor even though it’s time- consuming to write, time-consuming to read, and sort of a pain for all involved. 

Pro tip: Use an RFP software like Loopio to make responding to RFPs easier.

Sales engagement

If used as a verb, this is the act of reaching out to prospects to "engage" them. If used as a noun, it refers to a type of software that helps you personalize and send email. E.g. "For our sales engagement, we use a sales engagement software."

Pro tip: To increase your response rate, use sales tools that make responding to your emails easier. For example, rather than send an email that says, "Are you interested?" send one with buttons where they can simply click Yes or No. (Try this in Mixmax.)

 

Related Post: Sales Engagement vs. Sales Enablement: What's the Difference, and When Do You Need Them?

 

Sales video

When you use either QuickTime or a Chrome extension like Vidyard to record a video and send it to a prospect, usually via email

Salesy

When someone’s manner is overly rehearsed, dramatic, or nakedly manipulative. E.g. “Wow did you read that email? Soooo salesy.” 

Sandler

A proprietary sales training methodology known as Sandler Training offered by Sandler Systems, Inc. It can be highly useful though can stray into outright psychological manipulation, and largely consists of being unexpectedly candid and using reverse psychology or “reverse negatives.” Used with good intentions, it can diffuse tension and put prospects at ease. Used with poor intentions, or by junior sales reps, it can drive prospects mad.

SDR / BDR

Sales Development or Business Development Rep. Mostly interchangeable terms for a sales role whose primary job is to call and email prospects to get them to take a call with a more seasoned salesperson like an AE. Don’t mistake this for a junior role—this is some people’s forte, and older, wiser SDRs are a godsend for sales teams.

SC / SE

Solutions Consultant or Sales Engineer. Two flavors of the same thing: A person who understands the technical aspects of the company’s product, and can explain it in detail. A solutions consultant is less technical than a solutions engineer (or solutions architect). 

SLA

Service Level Agreement. This is a contractual agreement between two parties, usually written into the agreement, that the vendor will deliver things by a certain date or within a certain quality range. For example, an “uptime” SLA on software which guarantees that it will be available 99.99% of the time.

Solution selling

A sales methodology where salespeople focus on selling a solution to the prospect’s problem rather than selling a specific product. For example, rather than saying, “We sell hydro spanners,” the rep might say, “We help you get your warp drive working again.” This reframes the purchase in terms of what the customer wants and speeds deals along.

Spiff

A sales promotion where salespeople can be awarded a “spiff” for hitting a time-bound goal, like selling the most service packages this quarter.

SPIN selling

A sales methodology whose title is short for “Situation, Problem, Implication, Need-payoff.” In SPIN selling, you take customers through a series of questions tied to each of these ideas that lead them to your product as the solution. 

SSO

An acronym for “Single Sign-On.” This is a feature within a software or app where, rather than create a new account, you can sign in with your Google (or similar) account. It’s designed to reduce the number of logins people need and make work easier.

Stakeholder

An individual with a say in whether the account purchases. 

SME

Subject Matter Expert. This is someone who’s an expert at something in particular, like email deliverability or HIPAA compliance. You bring SMEs in to explain things to your buyer.

TAM

Total Addressable Market. This is one list of every possible company you could sell to, and none of the companies you can’t. When sales leaders plan sales territories, they carve up the TAM into sections with relatively equal opportunity, and place their best sellers in the most important or high-potential territories. 

Template

A pre-written message, or a message you've saved to reuse. E.g. "It would be great if our team could start using templates, I'm curious what's working for others."

Pro tip: At the end of each quarter, scrub your templates.

TOFU / MOFU / BOFU

Short for “Top of Funnel, Middle of Funnel, and Bottom of Funnel.” These acronyms refer to the sages of a sales funnel. You might say, “This is a TOFU campaign for people who don’t know us yet, so it doesn’t mention our product.”

Touches

This is when you reach out—whether by phone, email, LinkedIn, or otherwise. You need many touches to earn someone’s interest or keep a deal moving. E.g. “We use an outreach cadence with seven touches.”

Triggers

Actions that are triggered when the prospect does something, like fill out a form. For example, they might receive a triggered email, or their lead score might increase within the CRM.

Value prop 

Short for “value proposition.” This is a short summary of what someone will get if they purchase. Also known as a unique selling proposition or positioning statement. Your value prop changes based on who you’re talking to.

UX / UI

Acronyms for “User Experience” and “User Interface.” UX refers to how someone feels when they interact with a digital product like a website or app, and the UI is the actual software interface. You should always be trying to improve the UX of your UI.

Upsell / cross-sell

Upsell is when you convince a customer to upgrade, either before they sign or after. You could upsell an account in year two because they’ve outgrown their product tier. Cross-selling is when you sell an existing customer additional products or features.

Vertical

Another word for “industry.” E.g. “I can’t sell to prospects in the healthcare vertical.”

Warm intro

A warm intro is one where you’re introduced by someone the prospect is friendly with, either a colleague or their boss. Also known as a warm call or warm email. 


What are the types of sales?

Broadly, there are two categories of sales: Inbound and outbound. Inbound sales are when someone comes to you to buy. Outbound sales are when you reach out to someone and interest them in buying. Within inbound sales, there are also bluebird sales—a deal where a stranger you weren’t aware of calls up and wants to buy immediately. 

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