Top 88 Sales Terms You Need to Know for 2021 & Beyond

Looking to brush up on your sales vocabulary? Check out our top sales terms and their definitions, and you can sharpen your communication skills in no time.

Sales terms are the common vocabulary used in the sales industry. As a sales professional, it’s important to have a firm grasp of industry jargon if you’re looking to operate in the industry or cover it as a writer or journalist. So, we’ve compiled the most important sales terms that everybody should know and given you the definition of each.

Sales Terms A - E

Account

The compilation of information and records regarding a specific client. This may include their contact information, demographic information, notes on prior contacts, lead score, and appointments for future tasks.

Account Executive

A sales professional in charge of managing individual accounts. An account executive speaks with clients, learning more about them, discovering their needs and goals, and eventually selling them on the product.

Account Management

The process of maintaining and nurturing a relationship with a given client. The account can be a lead, a prospect, or even an existing customer, and the goal is to grow the relationship and develop sales opportunities.

Annual Contract Value (ACV)

The amount of revenue a given contract brings in each year. Usually, this is compared to your customer acquisition costs to see how profitable each contract is for the company.

Assumptive Closing

A method of closing a sale wherein a sales rep asks questions that assume their prospect is going to buy a product. Typically, this involves asking questions about the delivery of the product as if the prospect has already confirmed that they’ll be buying.

To learn more about the assumptive close, read our ultimate guide on assumptive closing, including examples and a step-by-step explanation.

Bad Lead

A lead that is unlikely to buy because they don’t fit a company’s ideal customer profile or because they've been handed to a sales team with incorrect or missing contact information, making it impossible to contact them.

BANT Framework

BANT is an acronym used to describe a common framework of information a salesperson wants to gather from a prospect during discovery. The bits of information you’re looking to gather are:

  • Budget: How much your prospect is willing and able to spend on your product (or one like it)
  • Authority: The amount of decision-making power your prospect has
  • Need: The goals or problems your product can help the prospect achieve or solve
  • Timeframe: How soon the prospect is looking to make a purchase

Bottom of the Funnel

The bottom of the funnel refers to the end of the sales process, or funnel, wherein the buyer decides whether to buy. For the rest of the process, see the definition for purchasing process below.

Business Development

The practice of reaching out to outbound leads and attempting to get them into your pipeline. Also known in some industries as “internet sales” or “web sales,” business development is typically the primary source of leads for a sales team.

Business Proposal

A document sellers send to prospects that outlines the terms of a deal, such as the company’s value proposition and the project’s price, scope of work, and timeline. This is often sent near the end of the lead nurturing stage, but sellers can send an initial proposal to discuss and then update it with the new terms after negotiations.

To learn how to create a successful proposal that wins deals, check out our article on writing a business proposal.

Business-to-Business (B2B) Sales

When one business sells to another business. Typically, these are high-revenue products or services.

Business-to-Consumer (B2C) Sales

When a business sells to individual customers. Typically, these are lower-cost products or services than the ones involved in B2B sales.

Buyer Behavior

A consumer’s shopping, searching, and purchasing habits. These habits are usually a result of their needs, background, and other demographic information covered in your buyer persona.

Buyer Criteria

The information a prospect requests in order to make a purchase. This can be anything from basic product details to warranty support; anything a customer asks about is their buyer criteria.

Buyer Intent

The overall likelihood that your prospect will make a purchase.

Buyer Persona

A demographic snapshot of the customer that is most likely to buy your product. This usually includes the age group, gender identity, occupation, and location that your product targets. Typically, it’s portrayed as an example customer, like “Tina is a 35-year-old woman who runs a small business in California and is in need of a simple accounting software to help her navigate her complicated tax system.” A buyer persona is often considered interchangeable with an ideal customer profile (ICP).

Buying Signal

An action that a prospect takes to clue you into their interest in making a purchase. Examples include your prospect asking specific questions about the delivery of your product or offering you their timeframe for a purchase.

Call Reluctance

The resistance salespeople feel when it's time to to pick up the phone and make cold calls. Call reluctance is usually caused by nerves, fatigue, or frustration with the rejection that sales reps experience when cold calling.

To learn more about call reluctance, check out our guide on call reluctance and how to overcome it.

Churn Rate

The rate at which customers stop purchasing from a business over a given timeframe (usually measured annually). You can calculate your churn rate by dividing the number of lost customers by the number you had at the beginning of the chosen timeframe.

Closed-Won Opportunities

A sales opportunity that’s closed when a prospect makes a purchase.

Closed-Lost Opportunities

A sales opportunity that’s closed without a sale being made. This usually means a customer explicitly asks not to be contacted any further or says they definitely will not be buying from the seller.

Closing Ratio

The rate at which prospects are closed. When calculating, you compare the number of closed prospects to the number that have been contacted by a sales team member.

Cold Calling

The act of calling prospects who haven’t heard from your company before in order to get an idea of their needs and whether they’re a good candidate for your product. Cold calling is usually one of the primary duties of entry-level salespeople. 

To learn more about cold calling and how to improve your skills on the phone, read our article on cold calling, including what it is, how it works, and how to do it well.

Cold Canvassing

Also known as door-to-door sales, cold canvassing is the act of visiting cold leads' businesses or residences to plan a follow-up meeting or make a sale that day. Cold canvassing is used in both B2B and B2C contexts.

To learn more about cold canvassing, take a look at our ultimate guide on cold canvassing.

Cold Emailing

The process of emailing leads who haven’t heard from your company before to learn about their needs and decide whether they’re a candidate for your product. Cold emailing is often a primary duty of entry-level salespeople. 

Learn more about cold emailing and how to improve your skills on the phone in our ultimate guide on cold emailing.

Commission

Monetary compensation based on production, as opposed to hours worked. Sometimes commission is paid in addition to a regular hourly wage, and other times sales reps are paid solely on the sales they convert. Commission can be calculated as a percentage of what you sell, or it can involve a flat rate per sale.

Consumer

An individual that can buy a product or service.

Conversion Path

The path that a person takes in order to become a lead, such as giving their contact info to a rep or completing an online form.

Conversion Rate

The number of conversions (which usually means successfully gathering contact information) divided by the total number of visitors to your exhibitor booth or website.

Correct Contact

The act of making contact with a decision maker or somebody who has the authority to purchase your product.

Cross-Selling

A type of selling when a salesperson manages to sell multiple different products to a prospect.

Customer Acquisition Cost

The cost of getting a prospect to purchase your product. This includes the cost of all the prospects that didn’t make a purchase, as it’s meant to show you how much you’re spending per sale made. This is what you would compare to your ACV to figure out how profitable you are.

Customer Lifetime Value (CLV)

The amount of profit that a customer brings in over the lifespan of your business relationship with them. CLV is usually calculated one of two ways: historic CLV, or the amount of profit made from all of a customer’s past purchases, and predictive CLV, which uses the prospect’s current buying patterns to predict the profit they'll bring the company in the future.

Customer Relationship Management (CRM) Software

The database that sales companies use in order to organize accounts, make notes on clients, and set appointments and tasks with prospects.

If you want to know more about CRM software, how to use it, and which platform to choose, check out our ultimate guide on CRM software.

Decision Maker

The person that makes the final purchasing decisions in a given household or company.

Demand Generation

A process, or group of processes, used by marketing to provide exposure for their product. These can include content marketing, pay-per-click (PPC) ads, lead nurturing campaigns, and search engine optimization (SEO).

Discovery Call

The first call made to a prospect, typically by a sales rep, primarily to gather basic information about a prospect’s needs, pain points, and likelihood to purchase.

To learn more about what a successful discovery call looks like and how to have better discovery calls with your leads, check out our guide on discovery calls.

Elevator Pitch

A condensed form of a sales pitch meant for times when you have little time to speak with a potential customer. Elevator pitches usually last no more than one minute.

To create your own successful elevator pitch, check out our ultimate guide on elevator pitches.

Sales Terms F - J

Field Sales

Also known as outside sales, field sales is an in-person selling method wherein the salesperson travels out to their prospects to pitch and/or demonstrate their product.

Forecasting

The act of estimating future sales in order to inform business decisions.

Gatekeeper

Typically used in the context of B2B sales, a gatekeeper refers to receptionists or other people who answer the phone but cannot make decisions to purchase. These people “gatekeep” for the decision makers by either allowing you to speak with them or acting as a roadblock between the two of you.

Gross Profit

The amount of profit made on a sale, calculated by subtracting the company’s costs from the total revenue of the sale.

Ideal Customer Profile (ICP)

Similar to a buyer persona, an ICP is a description of the person and/or company you believe is most likely to purchase, and be helped by, your product. This is usually to whom you target your marketing and sales process.

Inbound Lead

A person or business that becomes a lead by reaching out to the company that sells a product or providing their contact information in exchange for a lead magnet.

Inside Sales

A remote selling method wherein a salesperson operates from a fixed location and contacts prospects over the phone or internet.

Sales Terms K - O

Key Performance Indicators (KPIs)

Metrics that are used to measure the success of a business in reaching its goals. KPIs come in many forms and usually include various measurables such as annual revenue, growth, sales closed, and/or calls made.

Lead

A person or business that enters a company's pipeline in the first stage of the sales process. This is the beginning of the customer journey, and comes before the lead is considered a prospect or a sales opportunity. There are three main types of leads — marketing qualified lead (MQL), sales accepted lead (SAL), and sales qualified lead (SQL) — each of which are considered more qualified. When a lead becomes an SQL, they are officially a prospect.

Get more clarity on what a lead is, as well as the three types of leads, in our article on what separates a lead, prospect, and sales opportunity.

Lead Distribution

The process of assigning inbound leads to their designated sales reps. Lead distribution is the first step in ensuring that every lead is contacted in a timely manner, and it can be done manually or with the help of lead distribution software.

For more on this process and how to create your own system to assign leads, read our article on lead distribution.

Lead Generation

The process of gathering contact information from parties interested in your product in an attempt to start them on your sales path. This is usually handled by the marketing team and can include social media marketing, email marketing, paper mailers, and landing page optimization.

To get a better grasp on lead generation, check out our ultimate guide on lead generation.

Lead Magnet

An asset or piece of content that businesses use to entice leads to provide their contact information. Lead magnets can be a checklist, cheat sheet, free trial, discount, or another offer that's relevant to the lead, and they're made available to leads in exchange for their email address or another way to reach them.

For more information on developing a quality lead magnet, see our guide to creating a lead magnet.

Lead Nurturing

The process of engaging with the leads in your pipeline, learning about their pain points, and offering information and opportunities to buy throughout the sales process. Lead nurturing involves many different points of contact but is done primarily through email and phone calls.

Lead Scoring

A way of rating clients numerically by creating a scoring criteria that assigns point values to different prospect attributes and/or behaviors. These points add up to a lead score meant to represent how likely the prospect is to make a purchase.

For the specific ways to score leads, check out our article on lead scoring, where we'll also teach you how to set up your own scoring system.

Mark-up

A monetary amount added to the price of a product. Mark-ups are typically used to increase profits, to cover unexpected costs involved in the manufacture or delivery of the product, or to compensate for scarce inventory.

Marketing Qualified Lead (MQL)

A lead that a marketing team has qualified and confirmed could be interested in a company’s product. These leads are then sent to a sales team to be further qualified. Many MQLs enter a company's sales process through a lead magnet.

Middle of the Funnel

The step of the purchasing process wherein the lead analyzes whether your product is the right solution to their problem or need.

Monthly Recurring Revenue

The amount of revenue that a business makes each month.

Needs Assessment

An assessment given to a lead in order to understand their pain points, goals, or needs so the seller can learn what the lead needs their product to accomplish. Needs assessments can be multiple choice or open-response and are usually placed on a company’s landing page or incorporated into a discovery call.

To learn how to uncover your leads’ needs, check out our article on the needs assessment.

Net Promoter Score (NPS)

A metric used to measure how likely a customer is to recommend your product to people that they know. Usually, companies will issue customer satisfaction surveys to gather this information directly from the customers in question.

Objection

Concerns brought up by a prospect as a reason not to buy, or to wait to buy, a company’s product.

If you want to see some helpful examples of common objections and rebuttals you can use in response, read our article on common sales objections and rebuttals.

Objection Handling

The act of offering fact-based, personalized rebuttals to prospect objections. Salespeople who generate or nurture leads often perform a high amount of objection handling in their roles.

To learn more about overcoming your prospects’ concerns, take a look at our step-by-step guide on objection handling.

Onboarding

The process of informing a customer how to get the most out of their product after they make a purchase. From a management perspective, onboarding can also be used to refer to the process of training and introducing a new sales employee to a company.

Online (Inbound) Lead Generation

The process of attracting inbound leads through online means, such as email marketing, social media marketing, PPC ads, or SEO.

To learn more about generating online leads, check out our ultimate guide on online lead generation.

Opportunity

A prospect who has confirmed interest in making a purchase. These prospects are marked as sales opportunities and are contacted more often than other prospects in an effort to convert them while they’re actively interested.

For more information about opportunities and how they differ from other types of potential buyers, read our lead vs. prospect vs. opportunity article.

Outbound Lead

A person or business that matches a company’s ideal customer profile and is contacted by the company selling the product to try to generate the lead and add them to the company's sales funnel.

Sales Terms P - T

Pain Point

A prospect’s need, communicated as a problem that they’re experiencing. A salesperson’s ability to uncover pain points is usually a critical skill in regard to consistent sales results.

Positioning Statement

A statement or question used to open up a conversation. A good positioning statement centers the conversation on problems and goals that the product can solve right away so that they can move right into uncovering pain points.

Product Demo

A demonstration of a company’s product meant to show all of the most useful aspects of it, especially as they relate to a specific lead. These demos are usually done with products like tools that are used manually and can easily be demonstrated.

Profit Margin

The percentage of revenue that goes straight to the company selling a product. This is calculated by dividing your gross profit by the total revenue made from the sale of the product.

Prospect

A highly qualified lead who has responded positively to contact from a company. This could mean a call or email back, or a social media/website interaction that signals interest in making a purchase. A prospect is also often referred to as a sales qualified lead (SQL).

To learn more about prospects and where they exist in businesses' pipeline, read our article on what separates a lead vs. prospect vs. opportunity.

Prospecting (Outbound Lead Generation)

The process of generating outbound leads and evaluating those leads. Typically, prospecting involves getting an idea of how closely each lead fits your ideal customer profile and is done through cold calls, cold emails, cold canvassing, or other outbound methods.

For additional information on where and how to find new leads, check out our guide on sales prospecting. There, you'll learn about the six main prospecting strategies and best practices for each.

Purchasing Process

The process that prospects go through leading up to a purchase. This is usually broken down into three stages: awareness, evaluation. and decision. In the awareness stage, the prospect realizes that they have a problem or a need. During evaluation, the prospect analyzes your product and evaluates whether they feel that it will meet their needs. When the prospect agrees or declines to buy your product, they’ve completed the decision stage.

Quota

The minimum number of sales or revenue a company expects a sales professional to generate in a certain timeframe.

Referral

A lead that is generated by somebody they know recommending a company or product to them. Businesses win referrals by offering a quality customer experience and product, as well as directly asking for and incentivizing referrals.

To learn more, check out our ultimate guide on generating referrals, where we discuss how to win referrals before, during, and after the sale.

Sales Development Representative (SDR)

A sales rep that focuses on inbound leads. Their primary goal is usually to convert MQLs into SALs, at which point they often transfer the leads to a higher-level sales professional for further nurturing.

Sales Enablement

A strategy that trains and equips a sales team to improve their performance and close rate. This is usually done by giving them better tools, training, and strategies for their daily duties.

Sales Funnel

An outline of the customer journey that breaks it down into six different steps: awareness, interest, consideration, intent, evaluation, and purchase.

Sales Pipeline

The process of moving a person or business from a lead to a customer. This term can also be used to refer to the flow of leads that a salesperson can tap into to develop new business. Businesses can track their sales pipeline manually or using software.

For information on the best software and their use cases, check out our sales pipeline software buyers’ guide.

Sales Pitch

A short explanation of a product and its benefits given to a prospect in order to convince them to make a purchase. Sales pitches can be delivered at any point in the sales process but are usually best delivered after discovery is finished.

For more on how to deliver a quality sales pitch, check out our ultimate guide on sales pitching, which includes the steps to pitch effectively.

Sales Presentation

A visual presentation of a product and what it has to offer to a prospect, done in-person or over video. Sales presentations usually include a sales pitch, which follows some background information or demonstrations of the product.

To learn how to deliver a quality sales presentation, check out our guide on sales presentations and use the free template we provide.

Sales Process

The steps that a salesperson takes in order to guide their prospect toward a sale. These can look different company-by-company and are usually explicitly outlined in a company’s training materials for their sales reps.

To find out more about the sales process and all of the vital steps, check out our ultimate guide on the sales process and the collection of articles on each step.

Sales Script

A script used by a sales professional on calls or in meetings with prospects to improve the chance of a sale. Scripts are used to ensure consistent quality on calls and in meetings.

Service Level Agreement

An agreement between sales and marketing that ensures that each department knows what functions they serve. The agreement also keeps both departments complementary to each other without competing for certain tasks or leaving any undone.

Social Selling

The practice of reaching out to potential leads through social media. This is also referred to as social media marketing.

Soft Closing

The practice of asking the prospect whether they will buy under a certain condition, typically when giving a concession to a prospect. Here is an example of a soft close: “If I can convince my manager to give you this price, will we have a deal today?”

Top-Down Selling

A method of selling wherein sales reps are encouraged to always start their pitch with the highest-value option for their prospect and work their way down. This ensures that sales are always closed at the highest possible monetary value for the company selling the product.

Top of the Funnel

The first stage in the purchasing process, in which the lead is learning about a seller and how they might be able to help solve or achieve the lead's problems or goals.

Sales Terms U - Z

Unique Selling Proposition (USP)

Also known as a value proposition, a USP is a specific benefit that your product offers potential customers, usually condensed in a marketable format to be added to marketing materials, a company’s website, and pitches from sales reps.

To learn more about USPs, check out our guide to creating a unique selling proposition, including what it is, how to create your own, and more.

Upselling

The practice of finding a higher-priced option to sell to a prospect, or adding an extra feature that may add value for them and additional revenue for you.

Bottom Line: Sales Terms

All of these terms will be helpful for anybody with a sales career or anyone covering the sales industry. Being familiar with these terms will make your communication with other sales professionals much more efficient. Memorize them, get used to using them, and you’ll improve your credibility in the industry.

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