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Essential sales terms, concepts, and tools to set you up for success
The world of sales can be a complex, fast-paced and competitive space.
All the more reason to make sure that you’re well-versed in the constantly evolving terminology, processes and tools that make this such an exciting industry to work within.
Use our handy collection of common sales terms and concepts to check your facts and keep bang up to date with the latest in the sector.
Keep your finger on the pulse and keep total clarity, by avoiding any common confusion around definitions and key phrases.
In the very simplest of terms, sales refers to all activity involved in the process of selling goods or services, either to an individual or another business.
Under the broad umbrella of sales, you’ll find many sub categories. Global sales relates to international transactions of this nature, while online sales relates to exchanges that take place exclusively within the digital realm.
B2C sales is the term used to define sales made by a business to consumers. B2B sales relate to transactions made between one business and another. B2C sales occur when goods or services are sold to consumers directly from a business that would traditionally occupy the B2B space.
Within the context of sales, leads are defined as a contact with the potential to become a converted customer. Different businesses will categorize leads according to their own set of qualifying factors, but typically, the most promising leads will be qualified in two separate ways: sales qualified leads (SQLs) or marketing qualified leads (MQLs.)
MQLs are those which have shown an above average likelihood of converting as a result of their interaction with your marketing material.
SQLs are leads which are considered highly motivated to make a purchase, and which are ready to be led through the process by your sales team.
Many different approaches and methodologies apply to the world of sales. Various approaches may offer the best results, depending on your product, service or industry vertical.
Here's a list of different types of sales methods you can put to practice.
Transactional Selling traditionally focuses on one-time purchases, with a short sales cycle and price as a key factor. Discounts or special offers might play a key role here. Product-oriented Selling is closely related, and places the emphasis on explaining the features and benefits of the product to the prospect.
Needs-Oriented Selling focuses on fixing a pain point experienced by your customers, while its close cousin, Consultative Selling refers to an approach that actively prioritizes your customer’s needs over the sale itself.
Insight Selling requires an advanced understanding of data and research techniques, which can be applied to your customers’ unique situations to help guide them towards a suitable purchase.
Challenger Selling is one of the most interesting and disruptive new trends within sales. It places a focus on the teaching of prospects, tailoring the sales process and taking control of a sales experience via customer conversation.
Social Selling harnesses the power of social media networks to tap into communities with a well-defined set of interests and requirements. Since 46% of decision makers are now aged between 18 and 34 years old, which is the largest social media user demographic, it is imperative for salespeople to sell using social media.
Sales never sleeps. As an industry, new and inventive ways to present products and services in new ways to optimize conversion rates are always being sought.
In recent years, AI has played a huge factor in the success of modern sales teams. CRMs with AI capabilities lend exponential capacity for a deeper understanding of your buyers, providing contextual intelligence to help personalize customer journeys on a scale that could never be replicated individually.
Within the realm of sales and marketing, cross-functional alignment offers huge scope for improvements to productivity, helping align sales and marketing teams behind a common cause; effective conversion.
Finally, automation in sales helps to streamline your pipeline, removing many of the manual, tedious tasks from your team’s workload and freeing them to work on more pressing matters.
Four main types of sales team can be defined; inbound, outbound, hunting and farming.
Inbound sales teams concentrate on understanding the needs and priorities of their audience, then creating an environment which will “pull” them in. The prospect comes to the company by looking for information to solve their problem/need/pain point.
By contrast, outbound sales teams are focused on actively “pushing” their message out to an audience who have not yet actively demonstrated an interest in the products or services on offer. It is a highly targeted outreach where companies push their message or pitch to their prospects
Hunting team pursues potential customers in new and unchartered territory. They try to gain new customers in new industries, sectors and geographies.
Farming team focuses on nurturing existing customer relationships. This team builds on relationships with existing customers and makes sales. Discovering opportunities with existing customers can help reduce costs to pitch to new clients, reduce churn and improve sales revenue.
Working in sales is a challenging, exciting and ever-changing role. It demands organisation, curiosity, a good understanding of what makes people tick, and above all, the desire to communicate clearly and effectively to achieve a common goal.
Sales is a broad sector, offering opportunities for a wide range of personality types and skill sets. Ultimately, being results-driven, calm under pressure and a great collaborator who is willing to apply their individual effort and knowledge to a bigger, overarching strategy will set you in great stead for success.
The term SDR refers to a sales development rep. These inside sales reps focus all of their attention on outbound prospecting; they’re not concerned with closing sales, but rather moving leads through the sales funnel. In terms of KPIs, their performance will be governed by qualifying leads and booking meetings or demos. They’re highly focused on this singular task, and this specialism can make them highly effective and efficient members of a broader sales team.
In contrast to SDRs, sales account executives are typically more concerned with closing sales and fulfilling targets and quotas. They’re focused on turning leads into paying customers, and as a result, their performance may be assessed by revenue generated, and remuneration commonly made up of commission-based payments, at least in part.
Sales teams work to a core list of key performance indicators (KPIs.) These are clearly defined targets that help to quantify a team’s productivity and success. They’ll be slightly different for every sales team, but will commonly include:
Platforms such as Freshworks Analytics can give managers instant insight into sales team performance, and make such KPIs easily trackable over time.
A sales target refers to the amount of new business an individual rep or wider team is expected to close within a given period of time.
They form a key component in tracking and predicting a sales team’s success, setting clear milestones and objectives, and assisting in giving a good idea of how a business can be expected to grow over time.
A sales funnel refers to the pathway that a prospect takes through your sales process on their way to becoming a customer. Typically formed of three key stages - awareness, consideration and decision - a sales funnel helps you target your marketing and sales efforts appropriately at all times, as prospects move through your pipeline towards conversion. Learn more about sales funnels here.
On-target earnings, sometimes referred to as on-track earnings, is a measurement used to forecast the total potential compensation of an individual who has met their performance targets. It’s very common within sales, where pay is often linked to commission percentages.
Commission-based pay is common within sales, acting as both motivation and reward. Defined as a variable-pay remuneration for services rendered or products sold, businesses may choose to implement several different types of sales commissions.
In a straight or 100% commission plan, sales reps are only remunerated in line with the sales that they make. Other common plans include a standard salary plus commission, tiered commission (where the percentage of commission may increase as sales thresholds are exceeded) and revenue commission (which rewards reps with a set percentage of each defined sale made.)
When it comes to increasing sales, it's important to remember that this goal is not necessarily the same as increasing profits.
A number of common strategies to get an increased number of sales across the board include reducing prices, promoting limited time offers, and increasing the amount of traffic entering your sales funnel at all points, to ensure a “trickle down” effect that boosts the number of ultimate conversions.
A sales process is the model that a business implements and follows in order to convert general traffic or leads into paying, loyal customers. Typically, sales processes fall into two formats: funnels and cycles.
A funnel shepherds an ever decreasing number of leads through the sales process, preparing them to make a purchasing decision. From attraction, through to consideration, decision and conversion, this form of sales process has a clear pathway and end goal.
A sales cycle offers a slightly more dynamic process, whereby leads can be reengaged at any point.
There are many factors which can influence or affect your sales process. Some are outside the control of your sales team; external factors such as the economy, your competitors’ actions and general industry trends. But many are controlled by internal decisions, and it’s these aspects of the sales process that should be optimized for the greatest results.
The product or service that you’re selling is the bedrock of success within your sales process, but it's also important to consider your marketing strategy, customer service and enabling factors such as the availability of finance.
Sales operations refers to the internal processes put in place to help assist your sales team in their mission of actioning the strategy that you’ve laid out. Forming the nuts and bolts of “behind the scenes” productivity, sales operations could include carefully targeted training training, software tools and advanced engagement techniques. Any tactic or resource that serves to help your sales team become a more organised and effective force can be considered part of your sales operations.
Carrying the responsibility for the smooth running of your sales process, Sales Operations should be optimized at all times. At the heart of success here lies leadership. It’s essential to ensure that your whole team is aligned and pulling together when it comes to optimizing your sales operations for sales.
From cross-functional collaboration to data management, forecasting to sales team support, your Sales Op personnel have a really vital role to play in leading from the front. You can read more about the roles, responsibilities, process, and best practices for effective Sales Operations here.
Sales and revenue are two words often used interchangeably. While sales typically refers to the process of making transactions, revenue reflects the income received as the result of this activity. Revenue is not the same as profit, and does not necessarily mean cash received, as a portion of revenue may be paid through credit, for example as accounts receivables.
When looking to increase sales revenue, two main options are commonly explored. The first – make more sales. Assuming this is not done at the expense of significant discounting, increasing sales volume is a surefire way of increasing revenue.
The second option is to focus attention on increasing the value of each sale. By upping customer lifetime value (CTV) and average order value (AOV), sales revenue can also be expected to reliably climb. Again though, if this strategy comes at the expense of less attention being paid to other areas of the sales process (for example, attraction or acquisition of new top of funnel leads) the positive effect risks being diluted. As ever in a process-driven system, balance is everything.
Sales software is an essential element of successful modern enterprise. Forming a crucial cornerstone of your sales operations, a comprehensive CRM (Customer Relationship Management) platform can help you:
Working with an intuitive CRM also enables you to harness the power of AI to leverage next-level personalisation and focus your attention on the deals that are most likely to lead to the most profitable closure. Learn more about what a sophisticated CRM could do for you.
The sales software that you invest in should perform a number of roles, but perhaps most importantly, it needs to offer a unified solution.
A sales software like Freshworks CRM reduces the need to buy multiple tools and provides a 360-degree view of the buyer to drive growth. A sales software that
Offers unified view of customer to both sales and marketing teams, and breaks organizational silos
Tracks sales and marketing metrics, deals in pipeline, website traffic, performance of sales team and presents in the form of a visual dashboard
Has the ability to automatically rank your most-interested contacts based on engagement and suggests next best action to move leads down the funnel
Helps you engage with leads across different channels including phone, web forms, chat campaigns, segmented email and Whatsapp from within the CRM, without toggling between multiple tools
Helps you visualize deals in your pipeline, identify slow-moving and rotten deals and take swift action to close deals.
Try Freshworks CRM (formerly Freshsales), a cloud-based CRM for your sales and marketing teams. Freshworks CRM helps businesses scale faster and puts refreshing business software in the hands of small businesses, as well as enterprises.
If you’re looking for an easy-to-use, ready-to-use CRM (plus a 21-day free trial to start off with), we’re here.
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