Do you work in sales? Are you new to the industry? If so, you’re probably wondering what all of the jargon means. This comprehensive glossary contains over 200 terms and definitions related to sales.
By understanding these concepts, you’ll be able to communicate more effectively with your colleagues and close more deals.
A comprehensive sales glossary and definitions of important sales terms
Giving up on a sale or prospect or a deal.
ABC (Activity-based costing)
A process of assigning overhead and indirect costs to products and services.
A method of cost accounting that includes all costs incurred in manufacturing a product.
The salesperson who manages an existing customer account.
The money owed to a company by its customers.
The process of introducing and integrating a new product or service into the market.
The gradual paying off of debt in equal installments over a period of time.
The use of technology to replace or supplement human labor in the production or delivery of goods and services.
A process of programming a computer to make decisions for itself.
The use of data mining techniques to analyze customer data in order to improve customer relationships.
Annual recurring revenue
Revenue that a company can predictably count on receiving each year.
Average deal size
The average value of deals closed by a sales team.
A strategic move in which one company buys another company.
A financial ratio that measures how efficiently a company uses its assets to generate revenue.
Advance against commission
An advance given to a salesperson against future commissions earned.
A sales strategy in which a salesperson focuses on selling to a specific type of customer is called account-based selling.
A meeting arranged in advance between a salesperson and a prospective customer.
Assignment of territory
The process of allocating sales territories to salespeople.
Average order value
The average amount spent by a customer in a single transaction.
The process of maintaining and growing an existing customer relationship.
A strategy in which marketing and sales resources are focused on targeting and selling to a specific type of customer.
A process used to develop a strategic plan for managing an account.
The average amount of revenue generated per sale.
Revenue that will never be collected because the customer is unable or unwilling to pay.
Bait and switch
A marketing technique in which a company offers a low-priced item to lure the customers and then tries to sell them a more expensive item.
An exchange of goods or services without the use of money.
The process of comparing a company’s performance against that of its competitors.
Billback is accounting software, generally used for cost recovery.
A financial reward given to a salesperson for achieving certain sales targets.
A method of analyzing profitability that takes into account fixed and variable costs.
The practice of selling products or services together at a discounted price.
Data that is gathered and analyzed to help the salespeople make informed decisions.
The regret a customer feels after making a purchase.
Proven methods or processes that have been successful in the past and can be replicated to achieve similar results.
Business-to-business refers to the transactions between businesses, rather than between a business and a consumer.
Business-to-consumer; refers to transactions between businesses and consumers.
Leads that are not likely to convert into customers.
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The fixed amount of money that a salesperson is paid per year.
An acronym that stands for budget, authority, need, and timeline.
It refers to a sale that is not anticipated or extremely lucrative.
It is a physical or digital book containing a salesperson’s positive customer references, reviews, and case studies.
Bottom of the funnel
The final stage of the sales process, in which a prospect is ready to make a purchase.
This is a B2B email that targets a key decision-maker in a potential high-value account.
The actions and decisions that a consumer makes when searching for, selecting, purchasing, using, and disposing of products and services.
The likelihood that a customer will make a purchase.
A customer service center that handles customer inquiries by phone.
A company that partners with a manufacturer to sell or distribute the products.
A process in which customer feedback is used to improve marketing strategies.
The delivery of computing services over the Internet.
A fee is paid to a salesperson for each sale they make is called sales commission.
The process of gathering and analyzing information about a company’s competitors.
The process of submitting bids in response to a request for proposal.
A forecast is created by taking the average of multiple individual forecasts.
An arrangement in which a seller agrees to sell goods on the behalf of a consignor and only pays the consignor if and when the goods are sold.
The process of creating, executing, and managing contracts.
The percentage of prospects who are converted into customers.
Cost of goods sold
The direct costs are associated with producing and selling a product or service.
Cost per lead
The amount of money spent to generate a single sales lead.
The rate at which customers stop doing business with a company.
Customer lifetime value
The total amount of revenue generated by a customer over the course of their relationship with a company.
The fear of making sales calls.
The number of products or services that a company is able to produce or deliver.
The process of converting a prospect into a paying customer is called sales closing.
Something that sets a company or product apart from its competitors.
The portion of each sale that contributes to covering fixed costs and profits.
Customer Acquisition Cost (CAC)
The cost of acquiring a new customer, including marketing and sales expenses.
Customer Relationship Management (CRM)
A system or strategy for managing customer relationships.
A software platform used to create, edit and publish digital content.
A marketing arrangement between two companies in which they promote each other’s products or services.
The practice of raising money from a large number of people, typically via the Internet.
The group of senior executives in an organization, typically includes the CEO, CFO, and COO.
The ability to build rapport, trust, and credibility with others.
Challenger sales model
A model in which the salesperson takes a more proactive and consultative approach to prospects is called the challenger sales model.
The process of making phone calls to people who have not expressed interest in your product or service is called cold calling.
It is the practice of selling additional products or services to an existing customer.
A sale that includes multiple decision-makers and takes longer to close.
Data-driven decision making
The process of making decisions is based on data and analytics.
The process of creating demand for a product or service.
A reduction in the price of a product or service.
A collection of data that can be accessed by computers.
The process of using customer data to create and deliver personalized marketing messages.
The quantity of a product or service that customers are willing and able to buy at a given price, within a given time period.
An agreement between two or more parties, usually involving the exchange of goods or services.
The process of tracking, managing, and analyzing deals is termed deal management.
The process of estimating future demand for a product or service.
A marketing method in which physical mail is sent to potential customers.
A reduction in the price of a product or service.
The number of sales opportunities in the pipeline.
The creation of demand or interest in a product or service.
Drip campaign is an email marketing campaign in which a series of emails are sent over a period of time.
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Economies of scale
The cost advantages that a company enjoys as it grows larger.
Enterprise resource planning (ERP)
A software system that helps businesses manage their operations, including inventory, manufacturing, and financials.
A type of product distribution in which a company gives one retailer the exclusive right to sell its products in a given geographic area.
The process of creating and testing marketing campaigns to determine their effectiveness.
A warranty that covers a product for a period of time after the standard warranty expires.
The decision-maker who has the authority to approve a purchase.
A prospect that meets the criteria for being a good potential customer.
The process of interacting with prospects and customers to build relationships.
The process of moving a sale to a higher-level decision maker.
A prediction or calculation of the likely amount, size, or cost of something.
A report that shows items that fall outside of specified limits or criteria.
The level of interaction that a prospect has had with your brand.
Enterprise sales is the process of selling to large organizations.
Features, advantages, and benefits represented by the salespeople in order to explain the value of a product or service to their clients.
The process of making predictions about future events, based on past data and current trends.
Sales activities that take place outside of a company’s office, such as meeting with the customers or with the prospects in their homes or places of business.
A tool for analyzing the forces that are driving or restraining a change.
A business model in which a company licenses its brand and business model to independent businesses.
The process of delivering products or services to customers.
The difference between a company’s revenue and the cost of goods sold.
The person who controls access to a decision-maker.
The process of targeting marketing messages to specific geographic areas.
A document that can be redeemed for goods or services at a later time.
A desired result or outcome that a company or individual strives to achieve.
A marketing technique focused on rapid growth by using creative and unconventional methods.
A promise by a company to refund a customer’s purchase price if they are not satisfied with the product or service.
A physical or digital card that salespeople use to track their progress toward their quarterly or annual sales goals.
The process of identifying the difference between the current state and the desired future state.
A sales tactic in which the sales rep tries to pressure the prospect into making a decision.
The process of putting a plan or system into effect.
A reward or bonus that is given for achieving a certain goal.
Someone who has the power to influence the decisions of others, without having formal authority.
Inside sales is the process of selling products or services over the phone or the internet.
Ideal Customer Profile (ICP)
A description of the type of customer that is most likely to buy your product or service.
Selling products or services that require a high degree of understanding on the part of the customer.
Key Performance Indicator (KPI)
A metric used to measure progress towards a specific goal.
It refers to the additional products or services that a salesperson can offer to close a deal.
Key account management
The process of developing and maintaining relationships with key accounts.
A potential customer who has expressed interest in your product or service.
Lead nurturing is the process of building relationships with leads, even if they are not yet ready to buy.
Long-term customer value
The total amount of revenue that a customer is expected to generate over the lifetime of their relationship with a company.
The process of assigning a score to leads based on their likelihood of converting into customers.
A sale that is not completed because the prospect chooses to buy from a competitor.
A decision about whether to produce a product or service in-house or to purchase it from an external supplier.
The difference between the selling price and the cost of goods sold.
The process of dividing a market into smaller groups of potential customers, based on shared characteristics.
It is the business’s extra value, which is to increase the selling price of a product in order to make more profit.
Middle of the funnel
The stage of the sales process in which a prospect is interested in your product or service but has not yet made a purchase.
The sales technique of matching the prospect’s body language.
The process of providing each customer with a personalized product or service.
A type of organization in which employees report to more than one manager.
A significant event or achievement in the progress of a project.
Minimum Viable Product (MVP)
A version of a product with just enough features to be usable by early customers, and to provide feedback for further development.
The process of bargaining and trying to reach an agreement between two or more parties.
A type of bidding in which only one company submits a proposal or bid.
Natural language processing
The ability of a computer to understand human language.
Net Promoter Score
A metric used to measure customer satisfaction.
Net Asset Value
The value of a company’s assets minus its liabilities.
Need based selling
A selling technique in which the salesperson tries to identify the prospect’s needs.
A customer who has never purchased from a company before.
A written or recorded communication sent to media outlets that are intended to generate publicity.
Non-Disclosure Agreement (NDA)
A contract in which one or more parties agree not to disclose certain information.
A reason why a prospect may not want to buy a product or service.
A proposal to sell a product or service at a certain price.
The process of hiring an external supplier to provide goods or services that could be provided internally.
Indirect costs that cannot be directly attributed to the production of a good or service.
The process of orienting and training new employees.
A question that cannot be answered with a simple yes or no.
The process of creating and delivering a product or service.
A document that is used to place an order for goods or services.
People who buy goods or services for their organization, rather than for themselves.
A security that is not traded on a formal exchange.
The process of actively seeking out potential customers, rather than waiting for them to come to you.
A small-scale test or trial of a new system, product, or service.
Power dialer is a type of feature that automates the process of making phone calls.
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It is a problem that a prospect is experiencing and that your product or service can solve.
The use of data and statistical techniques to make predictions about future events.
The degree to which demand for a product or service changes in response to changes.
The path that a sales deal takes from initial contact to close and then nurturing.
The amount of money that a customer pays for a product or service.
Price elasticity of demand
A measure of how much demand for a good or service changes in response to a change in price.
A potential customer who has been identified as a good fit for your product or service.
A selling technique in which the salesperson uses high-pressure tactics to try to close the deal.
A good or service that is offered for sale.
The portion of a subscription that is billed for the number of days used.
A marketing activity that is designed to increase demand for a product or service.
A written offer from a seller to a prospective buyer.
The process of seeking out new potential customers.
Product Life Cycle
The stages that a product goes through, from development to retirement.
Proof of Concept (POC)
A prototype that is used to test whether a concept is feasible.
Product lifecycle management
The process of managing a product from development to retirement.
The amount of money that a company has left over after paying all of its expenses.
The combination of marketing activities that a company uses to promote its products or services.
Public Relations (PR)
The deliberate attempt to influence the public’s perception of a company or its products.
A lead that has been vetted and is ready to be passed on to the sales team.
A document that details the price of goods or services.
The standard price for a good or service, without any discounts.
The exchange of goods or services of equivalent value.
A lead that comes to a company through word-of-mouth.
The process of selling to customers who are not physically present.
A statistical technique that is used to understand the relationship between variables.
A company that buys goods or services from a supplier and then sells them to customers.
A company that sells goods or services directly to consumers.
RFP (Request for Proposal)
A document that solicits proposals from potential suppliers.
RFQ (Request for Quotation)
A document that solicits quotes from potential suppliers.
Return on Investment (ROI)
The ratio of money gained or lost on an investment, relative to the amount of money invested.
The total amount of money that a company brings in from sales.
SaaS (Software as a Service)
A type of subscription software that allows users to access and use the software, without having to install it on their own computers.
The process of convincing someone to buy a product or service.
The steps that a salesperson takes to close a deal.
The person responsible for managing a team of sales reps.
The minimum amount of sales that a salesperson is expected to achieve in a given period of time is called sales quota.
The specific sales goals that a company or salesperson sets.
SDR: (Sales Development Representative)
A salesperson who is responsible for generating new leads and setting up appointments.
A market where buyers and sellers trade goods or services that have already been used.
The process of automating your sales process using sales automation software.
The process of using technology to speed up the sales process.
The process of providing salespeople with the tools and resources they need to be successful.
The department in a company that is responsible for the sales process.
SQL (Sales qualified lead)
A sales qualified lead is a lead that has been vetted by the sales team and determined to be a good fit for the product or service.
The process of using social media to build relationships and generate leads.
It is an incentive that is offered to salespeople to encourage them to sell a particular product or service.
A person or group of people who have an interest in the outcome of a sale.
The process of dividing a market into smaller groups, based on shared characteristics.
A pricing strategy in which a company charges a high price for its product, in order to make a large profit.
A sales training method that is based on the premise that people do not like to be sold, but they like to buy.
A company that provides goods or services to another company.
A visual representation of the journey that a potential customer takes, from awareness to purchase.
A promise to refund the customer’s money if they are not satisfied with the product or service.
A meeting at the beginning of the year, in which sales goals are set and strategies are discussed.
A tax that is levied on the sale of goods or services.
The fluctuations in demand for a good or service, that occur at different times of the year.
The practice of sending undercover customers to evaluate a company’s products or services.
The ability of a system to handle an increased workload without breaking it down.
Service Level Agreement (SLA)
A contract that sets out the terms of a relationship between a service provider and a customer.
The alignment of sales and marketing teams to work together toward common goals.
A sales technique that is based on asking questions, rather than making statements.
Subject matter expert
A person who is an expert in a particular field.
A type of selling in which the salesperson tries to find a solution to the customer’s problem, rather than just selling them a product.
Supply and Demand
The availability of goods or services, and the willingness of people to buy them.
A tool for evaluating a company’s strengths, weaknesses, opportunities, and threats.
A specific group of people that a company or salesperson wants to sell to.
A statement from a satisfied customer, that is used to promote a product or service.
The length of time that a sales contract is in effect.
Top of the Funnel (TOFU)
The stage of the sales funnel in which potential customers are first exposed to a company’s products or services.
A question that is asked during a sales pitch, in order to gauge the customer’s level of interest.
Total available market
The total number of potential customers for a product or service.
A type of financing in which a large sum of money is divided into smaller payments.
An offer to supply goods or services at a certain price.
A defined area in which a salesperson is responsible for making sales.
A small-scale trial of a product or service in a particular market, to see if it is viable.
An event where companies showcase their products and services to potential customers.
A description of how a user would use a product or service, from their point of view.
Unique Selling Proposition
The reason why a customer should buy a product or service from a particular company, rather than from its competitors.
Upselling is the practice of selling a more expensive product or service than the one that was originally requested.
The experience the user has after using the product or service.
The part of a product or service that the user interacts with.
A startup company that is valued at over $1 billion.
A statement that explains how a product or service solves a customer’s problem or meets their needs.
A company that sells goods or services to another company.
A guarantee that a product will be free from defects for a certain period of time.
A call that is made to a potential customer who has already been contacted by the salesperson, and is, therefore “warmed up” to the idea of doing business with them.
A customer who spends a lot of money with a company.
A collection of web pages that are hosted on a server and accessible via the Internet.
A document that provides information about a product or service, or a problem and its solution.
A company that buys goods in bulk from manufacturers and sells them to retailers at a higher price.
The sequence of steps that are followed in order to complete a task.
The rate at which a product or service is sold, or the amount of it that is produced.
Thanks for reading our glossary of sales terms! We hope you found it helpful.