Have you ever been in a business meeting or on a sales call when a potential customer or business associate uses a marketing term that you just don’t understand?

Sales terminology includes a wide range of words and phrases used by those in the sales industry. These terms define various stages of the buying process and provide insights into sales operations.

To achieve the desired results – converting more prospects into customers and increasing revenue – you must now what you’re talking about.

Or at least sound like you do!

Here are some Sales Terminologies that you should know:

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      1. 1. AIDA – Attention/Awareness, Interest, Desire, Action
        They are the four steps of the now-sort-of-outdated Purchase Funnel (although most agree the funnel is much more complex than what is represented in this traditional model), wherein customers progress from awareness to purchase.
      1. 2. ARR – Annual Recurring Revenue
        For recurring revenue companies, ARR provides a high-level look at how recurring revenue or subscription business is growing over time. It’s a good metric for models that have longer term subscription durations. It’s also great for long-term planning.
      1. 3. B2B – Business 2 Business
        B2B refers to the transactional relationship between a provider and a client, where the provider is a business and the client is another business. e.g. “Our B2B marketing strategy targets organizations in the manufacturing niche.”
      1. 4. B2C – Business 2 Consumer
        B2C refers to the transactional relationship between a provider and a client, where the provider is a business and the client is an individual consumer. e.g. “Our B2C marketing strategy targets new moms.”
      1. 5. BANT – Budget, Authority, Need, Timeline
        It’s a famous tool for sales reps and sales leaders to help them determine whether their prospects have the budget, authority, need, and right timeline to buy what they sell.
        B = Budget: Determines whether your prospect has a budget for what you’re selling.
        A = Authority: Determines whether your prospect has the authority to make a purchasing decision.
        N = Need: Determines whether there’s a business need for what you’re selling.
        T = Timeline: Determines the time frame for implementation.The BANT formula was originally developed by IBM several decades ago.
      1. 6. Cold Calling
        Making unsolicited calls in an attempt to sell products or services. It’s also a very inefficient way to find potential customers.
      1. 7. Commission
        The payment a sales rep gets when they successfully sell something; usually a percentage of sales revenue.
      1. 8. Conversion Path
        The “events” on a company’s website that help them capture leads. In its most basic form, it’ll consist of a call-to-action (typically a button that describes an offer) that leads to a landing page with a lead capture form, which redirects to a thank-you page where a content offer resides. In exchange for his or her contact information, a website visitor obtains a content offer to better help them through the buying process.
      1. 9. Conversion Rate
        The percentage of people who completed a desired action on a single web page, such as filling out a form. Pages with a high conversion rate perform well, whereas pages with a low conversion rate perform poorly.
      1. 10. Customer Acquisition Cost (CAC)
        The cost of acquiring a new customer. This metric allows you to evaluate the cost and value of scaling up your business. Learning how to control and lower your CAC makes it possible to minimize the cost of landing new customers and maximize your profits.The simplest method for calculating CAC is to divide the time and money spent on customer acquisition over a given period by the number of new customers acquired.
      1. 11. Customer Lifetime Value (CLV)
        Also known as user lifetime value (LTV), CLV represents the total value of a customer over the course of their relationship with your company. CLV is influenced by the length of the customer lifecycle, your customer retention rate, churn rate, and average profit margins per customer.The simple CLV formula (which works well if your annual sales are relatively flat) is:
        (Annual revenue per customer * Customer relationship in years) – Customer acquisition costThe traditional CLV formula (which you should use if your sales are not flat) is:
        Gross margin * (Retention rate / [1+ Rate of discount – Retention rate]
      1. 12. Customer Relationship Management (CRM) System
        Software that streamlines customer relationship management by automating repetitive tasks and tracking customer data. The three main types of CRM systems are operational, analytical, and collaborative – though many CRM tools are a combination of the three.
      1. 13. Decision-Maker
        The person or role responsible for making the final sale decision. They are often “guarded” by a gatekeeper.
      1. 14. FAB – Features, Advantages, and Benefits.
        Sales reps use this three-part structure to communicate the value of their product or service by defining its characteristics (features), the positive attributes of those features (advantages), and how the product would enhance the customer’s life or reduce pain points (benefits).
      1. 15. Gatekeeper
        A person or role who enables or prevents the information from reaching another person(s) in a company. For example, a receptionist or personal assistant.
      1. 16. Lead
        A person or company that has expressed an interest in a product or service in some way, shape, or form. In exchange for a coupon, they may have filled out a form, subscribed to a blog, or shared their contact information.

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    1. 17. Lead Qualification
      The process of determining whether a potential buyer possesses certain characteristics that qualify him or her as a lead. Budget, authority, timeline, and so on are examples of these characteristics. GPCTBA/C&I and BANT are two popular lead qualification criteria acronyms.
    1. 18. Monthly Recurring Revenue (MRR)
      The monthly revenue generated by your product or service subscriptions. Understanding MRR provides you with a more comprehensive understanding of your business’ health and growth trajectory.
    1. 19. Net Promoter Score (NPS)
      A customer satisfaction metric that assesses how likely people are to recommend your company to others on a scale of 0 to 10. The NPS is derived from a simple survey designed to help you determine how loyal your customers are to your business. To calculate NPS, subtract the percentage of customers who would not recommend you (detractors, or 0-6) from the percent of customers who would (promoters, or 9-10).
      Regularly determining your company’s NPS allows you to identify ways to improve your products and services in order to increase customer loyalty.
    1. 20. Qualified Lead
      A contact who has opted in to receive communication from your company, has learned about your product or service, and is eager to learn more. Marketing and Sales often have two different versions of qualified leads (MQLs for Marketing, and SQLs for Sales), so be sure to talk with your sales team about the types of leads you intend to hand over.

    Not knowing the proper definition for sales terms can cause confusion, miscommunication, and misinformation being shared. Getting a firm grasp on these terms is crucial to becoming an effective and well-informed sales team member. If you want to be a part of sales, make sure to learn and understand these terminologies in order to help boost your career!

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