39 common sales terms that all salespeople and marketers should know

When sales and marketing teams align to share insight and resources, they can generate more leads, increase prospect engagement and ultimately create more revenue.

According to LinkedIn’s research, 90% of sales and marketing professionals agree that aligning their teams’ initiatives and messages positively impacts the customer experience. Around 85% think this type of collaboration is the largest opportunity for improving business performance.

For marketing and sales to work well together, members of both teams must be able to speak the same language. That’s not a given when there are so many marketing and sales terms to know.

In this sales terms glossary, you’ll find definitions for the most important words and phrases you’re likely to hear in your next sales-and-marketing strategy meeting. Brush up on old knowledge or use it as a go-to reference guide next time you need clarity.

An A-Z sales glossary for reps, managers and marketers

Activity-based selling

Activity-based selling is a sales strategy where reps focus on a series of clearly defined, cascading actions that make a sale happen, rather than prioritizing the closing of the deal itself (results-based selling).

This approach helps reps stay organized and motivated by giving them control over how much time they spend on certain tasks and allowing them to set short-term objectives.

For example: “I need to make 10 sales this month. I typically need to send 100 proposals to reach that target, so this week my goal is to send 25 proposals out to leads”.

(See also: consultative selling)

Annual contract value (ACV)

Annual contract value, or ACV, is a measurement that shows how much an ongoing customer contract is worth by averaging and normalizing its value over one year.

You can use ACV to gauge the dollar value of customer accounts that involve monthly subscriptions, differently priced plans and multi-year contracts.

(See also: annual recurring revenue)

Annual recurring revenue (ARR)

Annual recurring revenue, or ARR, is a metric that shows the amount of recurring income a business generates from all of its subscription accounts.

ARR is particularly useful to measure sales performance within a SaaS (software as a service) business.

(See also: annual contract value)

B2B (business to business)

B2B describes the relationship between a buyer and seller in which both parties are businesses. For example, Pipedrive provides sales CRM and pipeline management software to other companies to empower their sales teams, so we operate a B2B model.

(See also: B2C)

B2C (business to consumer)

B2C describes the relationship between a buyer and seller when the seller is a business and the buyer is an individual consumer. For example, Netflix sells its streaming service to individual users, so it operates a B2C model.

(See also: B2B)

Buyer persona

A buyer persona is a semi-fictional representation of a business’s ideal customer based on market research and existing customer data.

Inbound marketers use buyer personas to define their target audiences so they can create content that reaches and resonates with potential customers.

Sales reps can use the same profiles to qualify leads (e.g. “This website visitor matches the demographic profile of our ideal customer, so they’re more likely to be interested in buying our product and are therefore worth spending time on”).

Buying criteria

Buying criteria are pieces of information a consumer needs to make a buying decision.

While all buyers have their own criteria, this type of information generally includes answers to questions such as:

• What is the product?

• Why should I buy it?

• How will it benefit me?

• How much does it cost?

• Why should I buy it from your business?

Buying process (also called a buying/buyer/customer journey)

The buying process is a sequence of steps that a buyer takes to become a customer.

While theories vary in detail, most buying processes follow a similar pattern:

1. Problem recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Purchase

6. Post-purchase evaluation

As with customer lifecycles and sales funnels, the stages of the buying process help salespeople understand what their prospects might be feeling and looking for at any time.

(See also: customer lifecycle)

Churn rate

Churn rate is a measure of how many customers stop using a product or buying from a business.

To calculate churn rate, divide the number of customers you lose in a certain timeframe by the total customers at the start of the same period. Then multiply the result by 100 to get a percentage.

For example:

1. 20 customers lost in March ÷ 250 customers on board at the start of March = 0.08

2. 0.08 x 100 = a churn rate of 8%

Cold calling

Cold calling is an outbound sales technique where a rep makes first-time calls to prospective customers who haven’t expressed interest in their product before (but do match the ideal customer profile).

While the recipient of a cold call might not be aware of the brand contacting them, a good sales rep will qualify prospects first by making sure they fit their business’s ideal buyer profile.

Consultative selling

Consultative selling is a “buyer-first” sales approach that prioritizes customer relationships over selling a particular product.

A salesperson using consultative selling will focus on their customer’s needs and biggest pain points, before they try to provide a solution.

This way, the solution they put forward (and how they frame it) is relevant and personalized.

(See also: activity-based selling)

Conversion

In sales, a conversion is when a prospect becomes a lead, or a lead becomes a customer.

In marketing, the term broadly describes when the recipient of a marketing message completes a desired action, like when a website visitor signs up to your mailing list or provides their contact information.

You can measure the success of sales and marketing efforts using conversion rates. In sales, you could calculate this by dividing the number of qualified leads by the number of converted customers.

Cross-selling

Cross-selling describes a sales opportunity that involves selling different products to an existing customer.

Cross-selling usually involves selling a product or service that is related to or complements one the customer in question already owns. For example, an electronics sales rep who sells a mobile phone to a consumer could encourage them to buy a wireless charger or protective case.

(See also: upselling)

Customer acquisition cost (CAC)

Customer acquisition cost, or CAC, is a measurement of the total sales and marketing cost a business requires to earn a new customer over a tracked period. The cost comprises all spending in these areas, including salaries, commissions, bonuses, sales tools and travel expenses.

By measuring and subsequently reducing its CAC, a company can determine and increase its profitability.

(See also: sales metrics, lifetime customer value)

Customer lifecycle

The customer lifecycle is a multi-stage (and repeatable) journey customers go through, from first hearing about a brand to becoming one of its ambassadors.

There are seven stages in a typical customer lifecycle:

1. Awareness

2. Engagement

3. Consideration

4. Conversion

5. Support

6. Loyalty

7. Advocacy

Salespeople and marketers can use the stages of this buyer’s journey to understand their customers’ needs and emotions. For example, during the consideration stage, a prospect needs the type of information that will help them compare one product to others on the market.

(See also: buying process)

Customer lifetime value (CLV)

Customer lifetime value, or CLV, is a metric that indicates the total revenue a business can expect from a single customer account during a B2C or B2B sales relationship.

To calculate company-wide CLV (with the right data, you can do it for distinct customer categories, too), you’ll need the following information:

Average purchase value

Average purchase frequency

Customer value

Average customer lifespan

CLV

When you increase CLV by improving customer experience (to increase customer loyalty), your business becomes more profitable and efficient.

Customer relationship management (CRM)

Customer relationship management, or CRM, describes the technology and processes an organization uses to manage relationships with prospects, leads and customers.

The use of the word “customer” in CRM encompasses many types of relationships. As well as buyers, sales CRM tools like Pipedrive help businesses monitor and maintain relationships with:

• Employees

• Suppliers

• Partners

• Brand advocates

• Marketing contacts

• Candidates

Some CRM software includes automation features that help sales managers, account executives and reps to automate repetitive tasks such as scheduling follow-up and discovery calls.

Decision-maker

A decision-maker is a person at an organization who has the final say over B2B purchasing decisions.

Sales reps don’t always talk directly to decision-makers when selling (they might negotiate with a representative instead), but they’re worthwhile prospecting targets as long as they have a direct line to a decision-maker.

If possible, communicate directly with decision-makers. This way, you can:

• Convey your value proposition without it being diluted or miscommunicated

• Shorten the sales cycle to increase efficiency

(See also: gatekeeper)

Forecasting

Forecasting is the act of using historical data to estimate future sales performance over a forecast period.

Accurate sales forecasts help reps plan their time and allow managers to set expectations around performance goals and expenses.

Gatekeeper

A gatekeeper is a person at an organization who decides which information gets through to a decision-maker within their business. For example, a receptionist who screens calls for a procurement manager is a gatekeeper.

Personal assistants and office managers often act as gatekeepers, too.

A great sales rep will have a range of tactics to get past gatekeepers, so they’re able to communicate effectively and efficiently with buyers, especially when cold calling and cold emailing.

(See also: decision-maker)

Incremental sales

Incremental sales is a measurement of the value of products or services a business sells during a tracked period that goes beyond what it might normally sell.

A company might monitor incremental sales to determine the impact of promotional activities or new sales tactics.

Inside sales

Inside sales is the process of selling products and services remotely through means such as phone calls, emails and video conferencing. Inside sales is also sometimes called virtual sales or remote sales.

The main benefit of inside sales is that sales representatives can form relationships and sell to anyone, regardless of their location.

(See also: outside sales)

Lead

A lead is someone who fits the seller’s ideal customer profile but is yet to demonstrate any intent to buy a product beyond engaging with emails or other content marketing materials.

Leads sit between the top of the funnel and the middle, where reps can encourage them forward using targeted cold calls and emails. Marketers can help nurture leads by creating relevant content (including sales enablement content).

(See also: prospect, lead qualification, qualified lead, sales funnel, sales enablement)

Lead qualification

Lead qualification is the process of determining which potential customers are most likely to buy a product or service (customers who are likely to buy become qualified leads).

Effective lead qualification enables sales reps to use their limited time efficiently rather than spend it with someone who has no intention of purchasing.

(See also: qualified lead)

Onboarding

Onboarding is the post-purchase process of acquainting new clients or users with your product.

It aims to give paying customers the best possible early experience of a product to help create valuable long-term relationships and reduce churn rates.

Outside sales

Outside sales is the process of selling products and services in person through face-to-face meetings.

Outside sales is also known as field sales. While outside sales reps sometimes use an office as a base, they spend most of their time meeting leads and customers in the field.

(See also: inside sales)

Pain point

A pain point is a specific problem that drives a business’s prospective customers to search for a solution.

For example, a consumer who keeps losing their keys (the pain point) may search the market for a GPS tracking keyring (the solution).

The sales rep’s job is to help buyers address pain points by providing or recommending suitable products.

Pipeline (or sales pipeline)

A pipeline, or sales pipeline, is an organized, visual way of tracking potential buyers through the various stages of their purchasing journeys.

Sales pipelines are often presented as horizontal bars or funnels comprising stages that match the organization’s sales process, such as:

1. Prospecting

2. Qualifying

3. Contacting

4. Relationship-building

5. Closing

(See also: buyer journey, sales funnel, prospecting, lead qualification)

Prospect

A prospect is someone who has demonstrated interest in a product or service, shown intent to make a purchase and is open to finding out more from the seller about their solution.

Prospects sit between the middle and bottom of the funnel, where reps can nurture them using personalized communication (instead of more broadly targeted cold calls, cold emails or marketing content).

(See also: lead, prospecting)

Prospecting

Prospecting is an activity where reps aim to find potential customers (leads and others who fit the ideal customer profile) and move them into their company’s sales funnel, where they can nurture them towards becoming a customer.

(See also: prospect, sales funnel)

Qualified lead

A qualified lead is the most sought-after potential customer. This is someone who has expressed interest in buying a product and also has the budget, authority, need and timeframe (a methodology known by the acronym “BANT”) to make a purchase.

It’s important to know the difference between a marketing qualified lead (MQL) and sales qualified lead (SQL).

An MQL is someone who has demonstrated interest by interacting with a business’s marketing team or output (e.g. by downloading a piece of content) but is yet to enter the sales funnel.

An SQL has been vetted by sales and meets all the criteria above, meaning they’ve entered the sales funnel and reps can nurture them towards a purchase decision.

(See also: lead qualification)

Quota (or sales quota)

A quota is a set number or value of sales that a salesperson is expected to meet over a given period, often a month or quarter. Sales managers set quotas for their reps to hit so they can measure and compare individual and team performance.

By monitoring quota performance, sales leaders can reward top performers and identify underperforming reps, and plan their coaching accordingly.

(See also: sales metrics, sales management)

Sales enablement

Sales enablement is the strategic process of creating and providing the tools sales teams need to sell products effectively. This is a key part of sales and marketing alignment.

Both sales and marketing teams develop sales enablement assets, common examples of which include:

• Blog content and product guides

• Case studies and testimonial content

• Technical documentation for products

• Sales scripts and pitch templates

Sales funnel

A sales funnel is a visual representation of the journey, from a prospect’s first interaction with a business (such as a website visit) to the point that they purchase a product.

A classic sales funnel has three distinct stages:

• Awareness and discovery (top of the funnel)

• Researching (middle of the funnel)

• Making a purchase decision (bottom of the funnel).

The goal of sales reps and marketers at each is to move prospects onto the next stage.

Sales management

Sales management is the process of developing a sales force, coordinating sales operations and implementing techniques and processes that enable a business to reach its sales targets.

There are three distinct aspects of sales management: operations, strategy and analysis.

Sales metrics

Sales metrics are key performance indicators (KPIs) that allow an organization, team or individual to measure sales performance. Examples of sales metrics are:

• Customer satisfaction (usually measured on a scale)

• Sales revenue generated

• Win rate

• Average deal size

• Average profit margin

• Quota attainment

• Customer response time

Sales professionals often have a lot of sales data, but the key sales metrics help them understand what’s really happening. Often, they’ll visualize these metrics on sales dashboards, a common feature of CRM tools.

(See also: customer relationship management)

Social selling

Social selling is a lead-generation tactic where sales reps are active in the same social media spaces as their prospects.

It aims to build trust so that when an ideal customer needs a product or service that your business sells, they think of you.

Upselling

Upselling is when a rep encourages a customer to purchase a higher-end (and higher-priced) product than the one in question to increase revenue for their business.

For example, a car salesperson responding to an inquiry about a base model car could encourage the prospect to test drive (and ultimately buy) a more expensive model with additional features.

(See also: cross-selling)

Value proposition

A value proposition is a short statement used in marketing materials and sales communications to give potential customers an immediate glimpse of a brand’s offering.

A value proposition should highlight a product, service or brand’s differentiating features in a way that addresses potential objections and expected customer needs.

For example:

5 words and phrases that can dilute your sales pitches

While sales-specific language enables reps, managers, marketers and business owners to communicate efficiently, salespeople must be able to talk clearly with buyers, too.

Before using a sales term in front of a potential customer, consider what it means in practical terms. For example, a word like “onboarding” has plenty of meaning in a sales context but could go straight over a B2C prospect’s head: it’s clearer if you say “helping you to get started”.

Some non-sales-specific words will dilute the impact of your buyer interactions if you use them too liberally.

Don’t overuse the following words and phrases in calls, meetings, pitches and presentations:

• “Obviously”. What you’re saying won’t always be obvious to the person you’re speaking with. Assume it is and you might insult them or make them feel inadequate and less engaged.

• “Our competitor”. Repeatedly mention your competition and it could come across as though you’re just out to win when you should be prioritizing your buyer’s needs.

• “Discount”. Offering discounts, especially when you use that word explicitly (as opposed to just providing a “great deal”), can cheapen the value of your product. If you and the product are good enough and you’re in front of the right customer, a discount is unnecessary.

• “Contract”. While agreements are necessary, not all buyers want to feel tied down by a contract. “Agreement” and “relationship” are both warmer terms to consider.

• “[Your company name]”. Many buyers care more about what you can do for them than who you are. Make all of your interactions about the buyer to show you care about their needs.

Final thoughts

Knowing the common sales terms definitions can help you, your team and other departments avoid confusion when collaborating.

Whether you’re a salesperson or a marketer, get a firm grasp of the most important sales terms definitions. With this knowledge, you’ll be able to communicate more efficiently with colleagues, so you can spend more time selling and creating effective content.