Sales is a team sport. And when teams want to win, each member needs to be working from the same playbook. That's why we compiled this glossary of the most important sales terms, each clearly defined. Not only does it provide a handy reference, but it also puts all revenue operations professionals—sales, marketing and customer success—on the same page when it comes to critical metrics, analytics and strategy. Read on for our handy roundup.
A-G
H-N
O-R (click term below to jump to entry)
Outbound sales
Predictive sales analytics
Puppy-dog close
Quota
Revenue
T-Z
Outbound Sales
A key component of any sales strategy involves reaching out to prospects, even if you don’t know them — that’s where outbound sales comes in.
What is outbound sales?
Outbound sales refers to your sales or marketing team’s engagement with a prospect who has not yet interacted with your company or product. This typically means reaching out to an individual via a cold call, email marketing campaign, or LinkedIn message, and developing their interest in your company or product without them having any prior connection to it.
Outbounds sales can be difficult because the initial contact with the customer is typically unexpected and might catch them off guard. They might be hesitant to answer their phone, let alone provide information to a sales rep. Yet this same challenge is also the reason why outbound sales can be exceptionally rewarding.
How does outbound sales differ from inbound sales?
Outbound sales and inbound sales have similar characteristics, but outbound sales is typically more difficult since the prospect is not expecting your call. Not only are you intruding upon their time, it may not even be the right time for them to buy. This often ends in rejection.
Inbound sales, meanwhile, is usually easier as the prospect has already expressed interest in your product or service by, for example, visiting your company’s website, attending an event or engaging in a free trial. The conversations between the sales rep and the prospect are more educational, with the rep trying to understand the prospect’s unique needs and explain how their product can address those needs.
What are some outbound sales techniques?
Some outbound sales techniques include:
- Fully research your audience so you are better able to handle objections.
- Share content to provide thought leadership and useful information to prospects and build their trust.
- Set a clear agenda so you can stay on target and keep your call concise.
- Simplify the options to streamline the conversation and keep your prospect focused on the features of your product that are most useful to them.
How does outbound sales fit into a revenue operations framework?
Outbound sales is a critical tool in building pipeline for the revenue team. Especially for revenue operations organizations with target accounts, an outbound sales initiative can help them to reel in the most relevant accounts, while marketing can magnify impact with account-based marketing campaigns or targeted advertising.
For more information, read The Rise of Revenue Operations (Infographic).
Predictive Sales Analytics
Predictive analytics uses AI and automation to provide insight into future sales and trends so you can close more deals and grow your business.
What is predictive analytics?
Predictive analytics aims to determine the likelihood of future outcomes—using historical data, statistical algorithms, and machine learning. In sales, this can encompass everything from lead conversion to deal closings.The goal is to provide an informed assessment of the future, beyond human observation and estimation.
Why is predictive analytics popular now?
Predictive analytics has been around for decades but has become a mainstay in business now due to a variety of market factors such as:
- An increase in the amount of data available to be captured and storedFaster and cheaper computing power
- More accessible software
- A thirst for more insights to drive better and more efficient decision-making
How can you use predictive analytics for revenue operations?
Predictive analytics can support the entire revenue operations team.
Identify opportunities that are more likely to close. Predictive analytics can analyze historical deal data and predict whether or not current deals are showing similar traits and behavior. Based on that information, predictive analytics can determine whether or not the deal is likely to close.
Predict where you will land at the end of the quarter. The sales forecast is one of the most important documents for the entire company because it determines planning for investment and growth. Based on historical data and the current status of your deals, predictive analytics can offer insights into where you’ll land on your forecast.
Understand how much pipeline you need for the next quarter. Advanced sales teams are focused on hitting their numbers not only for the current quarter, but also \the following quarter and the quarter after that. Predictive analytics can help identify your pipeline targets to make sure you’re properly positioned for the future.
For more information, read 9 Sales Forecasting Metrics Sales Teams Need to Track & Report.
Puppy-Dog Close
Imagine a father and daughter in a pet store. The little girl wants a puppy, but her father hesitates. The puppy salesman knows that while the little girl is his sales champion, her dad is the economic buyer. It’s time to employ the puppy-dog close.
What is the puppy-dog close in sales?
The salesman suggests the dad borrow the puppy for a week—a free trial, if you will. “You can always return him for a full refund,” the salesman assures them. This gives the buyer a risk-free opportunity to try the product.
From a sales perspective, ideally the girl forms an emotional attachment to the puppy, and her dad doesn’t have the heart to take the puppy back to the store. The free trial pushes the deal across the finish line.
The rationale behind this type of close is straightforward: Get the customer to try out the product and experience the benefits. Once they enjoy the product and experience the value firsthand, it becomes much harder for them to let go.
The puppy-dog close is used by many industries, including B2B software sales.
How can using the puppy-dog close increase your forecast accuracy?
In addition to being an effective method of closing, the puppy-dog strategy can also lead to a more predictable revenue forecast. Many technology salespeople call the puppy-dog close the proof of concept (POC) technique. Offering the customer access to the product allows the customer to experience the real value of the solution in the real world.
The next time you go shopping for a puppy or a new car, pay attention to the techniques that your salesperson is using. Find out if they try the puppy-dog close on you.
For more information, read 4 Focused Ways to Close Customers with Confidence.
Quota
A quota is one of the most important numbers in sales. It’s the amount that sales reps are expected to deliver in a specific timeframe. It dictates everything from quarterly sales team goals to rep compensation and future planning.
What is a sales quota?
A sales quota is a time-restricted sales goal set by management for a particular region, sales team, or individual rep. Typically, sales quotas are tied to a monthly or quarterly goal that has affiliated incentives or benefits when achieved. This helps keep salespeople motivated.
What is quota attainment?
Sales quota attainment refers to a sales rep’s success in hitting their sales goal in a given period, usually monthly or quarterly. If the sales rep has reached their goal, they have attained quota.
Quota attainment is important in any sales organization because it means the necessary revenue will be achieved to drive growth.
How to set a quota for your sales reps
In order to set a sales quota for your reps, you need to know the basic metric your company uses to measure success, and then adjust that metric to reflect expected company growth.
For example: Businesses often use a volume-based sales quota—the number of units sold or the total revenue generated for a given period. To generate this quota, you can calculate the ideal sales quota by dividing your forecasted sales goal by the number of salespeople.
Why are quotas important for the entire revenue operations team?
Understanding what the quota is for the sales team gives the entire revenue operations organization a target. For sales, it could be closing or exceeding an amount of revenue for the quarter. For marketing, it could be the necessary pipeline coverage to meet that quota. Sales development reps and the customer success team also play a role in working towards hitting the quota by forging and managing relationships with prospects and customers.
For more information, read 4 Focused Ways to Close Customers with Confidence.
Revenue
Revenue is income. It’s therefore one of, if not the, most important metrics in assessing the overall health and viability of a business.
What is revenue?
Revenue can be defined as the income resulting from normal business activities, such as the sale of a product or service. It is often measured in quarterly and yearly ranges. For example: Company XYZ produced a quarterly revenue of $25 million and a yearly revenue of $100 million. Revenue growth can also be measured on a quarterly or yearly basis.
What are key SaaS revenue metrics?
There are several revenue-related metrics that can be used to better understand the overall success of a business.
- Churn. Revenue churn is a metric that measures the percentage of customers who do not renew their contracts with a company. This metric is measured as a percentage against the overall revenue of a company. As a company scales, minimizing revenue churn is essential to maintaining steady growth.
- Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). The monthly recurring revenue metric measures how much revenue is being produced every month through the purchase of products or services. By multiplying this number by 12 (as there are 12 months in a year), you can calculate the annual recurring revenue, which is also known as the run rate. This metric is key when assessing your predictable revenue.
- Lifetime value. This metric measures the total revenue generated by the customer over their lifetime. The longer a customer is using your service, the higher this value is.
- Customer acquisition cost (CAC). This measures the amount an organization spends to acquire a new customer. This number is calculated by determining the total amount spent by departments under the revenue operations umbrella (sales, marketing, sales operations and customer success) and dividing that number by the total number of customers acquired in the same period of time.
- Net Promoter Score (NPS). This metric helps leaders within the organization gauge how much value the product or service is creating for its customers. This is an important metric because it can help determine where value is being created within the organization and where the service can be improved to provide more value.
Revenue is a process
Though revenue is displayed as a finite number at the end of a quarter or fiscal year, it is an ongoing process that requires extremely efficient alignment with every department in the revenue organization. Therefore, it must be practiced and perfected to maximize long-term success.
For more information, read The Forecast: A New Series for Revenue Leaders.