Terminology for Sales Operations
Great salespeople know their sales terminology. The following list of terms are often heard on salesfloors of B2B enterprises. If there are terms we missed or you don’t understand our definitions, please contact us. We’d love to help you demystify the world of sales operations.
3. Terms for Working an Opportunity
4. Reporting for Sales Operations
1. Commonly Used Terms for Sales Operations
The term CRM stands for Customer Relationship Management. CRMs are software applications used for sales management. They act as a database holding information people, businesses, and transactions that take place in an organization.
Almost every organization with a functioning sales department has (and regularly uses) a CRM.
A record holds information about a person, place, or thing. In the case of CRMs, records typically hold information about a contact, company, transaction, opportunity, or support ticket.
Salespeople access records to assist their job. When they work leads, they access people records. When they work opportunities, they access opportunity records.
The relationship (or relationships) a contact has with your business. Someone might define their relationship as a subscriber, customer, client, investor, etc. From a sales and marketing perspective, contact types help us engage contacts in a personalized way.
Someone who engages with your company via inbound marketing efforts. This can include downloading your ebook, finding you on Google, submitting a contact form, opting into a consultation from your blog, etc.
The term Lead is sometimes interchanged with the term Prospect (but there technically is a slight difference). Prospects are a result of targeted outbound marketing efforts.
Someone your company deems worthy for outreach and sales engagement via outbound methods. Outbound methods can include contacting someone you found through buying a list, contacting someone on LinkedIn who meets certain criteria, or cold calling a person.
A partner is a person or business that is engaged in a pre-defined relationship with an organization. A partner might send qualified leads to your business, involve your business in a contract, or refer your business products/services to people they interact with.
2. Terms for Qualifying a Lead
A queue is a technique used by salespeople to rapidly work a list of leads or prospective customers. Through marketing automation efforts, tasks are created for the salespeople requesting that they fulfill a manual request. These requests can be things like sending more information, sending a quote, qualify them via phone call, etc.
When a salesperson has to complete multiple tasks, using a queue makes the process of finding, sorting, and interacting with contacts easier. For example, Hubspot has a feature called “Create Queue”. By triggering this feature, a list of contacts are entered into a unique view that displays the contact’s record with the email pop-up open. Listed on these pop-up windows is a quick-action button labelled “Send and Complete Task”. Once sending an email, the task is updated (informing dashboards managers view) and the view changes to the next contact record in the queue — very convenient.
Lead Status is an important field within a CRM. It is a dropdown menu with different options used within the Lead Qualification process.
The steps involved in qualifying a lead are to (1) contact the lead and (2) ask qualifying questions. Because the nature of contacting another person can be difficult, salespeople use Lead Status to track the people they’ve tried to contact, who they’ve connected with, and who they’ve qualified (finishing the lead qualification process).
Leads with a Lead Status of Marketing Qualified are lead that have been passed from the marketing department to the sales department; commencing the qualification process for sales people.
Other options for Lead Status dropdown field include:
- Open. The contact has never been worked or qualified.
- Marketing Qualified. The contact has performed activities related to the Marketing Qualified Lead criteria set by the marketing team.
- Working – Connected. A salsperson has made contact with the lead.
- Working – Not Connected. A salesperson is attempting to contact a lead to qualify them.
- Sales Qualified. The contact has been qualified by a salesperson and there is meaningful sales intent.
- Unqualified. The salesperson has disqualified the contact from further sales effort as there is no commercial intent.
Marketing Qualified is one of the options available under the CRM field, Lead Status. As an organization’s marketing department works to build brand awareness and generate leads, they acquire contacts that exchange their information in exchange for help or resources (downloading ebooks, checklists, requesting a demo, etc.). Upon submitting these requests via online form submission, contacts are created inside the CRM; storing that person’s information.
But not all Leads have sales intent. That’s why organizations include qualification steps (Marketing Qualified and Sales Qualified). Marketing Qualified is the result of the marketing team’s qualification criteria (called MQL Criteria). The ultimate goal of a marketing department is to deliver Marketing Qualified Leads to the sales department for further qualification and entry to the sales process.
An example of MQL Criteria is the following:
- The contact resides in one of our service countries (Canada or the United States)
- The contact works at an organizaiton with more than 250 employees
- The contact’s job title is any of Manager, Vice President, President, CEO, or COO
Working can refer to either (1) the lead qualification framework, or (2) the activities involved in moving an opportunity through the sales process.
Regarding the lead qualification framework, “working” means the salesperson is attempting to contact a lead to qualify whether or not there is sales potential. Related to the sales process, “working” means the salesperson is performing the tasks and activities associated with the sales process, moving an opportunity towards the Opportunity Stage, ‘Closed – Won’.
Some phrases you might hear from a salesperson related to “working” include:
- I was working a lead and they wouldn’t answer my calls.
- I’m switching gears on my workload this afternoon. I plan on working opportunities until 4:00 PM.
For more information about working leads (related to qualification), please visit our guide: How to Work a Lead.
Lead Source is a field within a CRM. It is used to capture how a contact had heard about your business. Lead Source is manually collected from salespeople during the sales qualification process and is gives marketing teams insight into the activities and marketing efforts that are working. Options for Lead Source include:
- Blog – Internal
- Facebook Group – External
- Facebook Group – Internal
- Media Article
- Organic Search
- Prospect – Cold Outreach
- Referral – Employee
- Referral – External
- Referral – Partner
- Social Media
- YouTube – Internal
3. Terms for Working an Opportunity
A Sales Process is a set of activities that an organization decides to do in effort to gain new customers. A sales process might include activities like sending a proposal, sending a quote, demonstrating software, arranging a trial, etc.
Once an organization finalizes their sales process, they begin to create it inside a CRM in the form of a Pipeline with Opportunity Stages.
For advice on how to build a sales process, we encourage you to read our guide: How to Build a Sales Process.
Pipeline is a technical term used in CRMs. It refers to the area where opportunity records exist. Suppose a team of salespeople accessed a pipeline called “Sales Pipeline”. Within the pipeline, they see what deals are being worked and which deals have closed. By filtering the pipeline, salespeople can begin to sort and calculate numbers related to their sales performance. Some metrics they might calculate include how much money they’re working, how much money they estimate closing, and how much money they forecast closing in the next quarter.
Phrases related to pipeline include:
- Rick has $400,000 in pipeline right now. He closed $320,000 last quarter. He’s doing a good job.
- This quarter’s pipeline is 40% behind last quarter’s pipeline. We need to figure out why that happened.
- The new consulting company we hired is managing over $800,000 in pipeline per rep. That’s amazing!
An Opportunity is a technical term used inside a CRM. It is a type of record that holds information about a purchase made by either a contact or organization. The ultimate goal of a salesperson is to move opportunities through the sales process, marking successful transactions as ‘Closed – Won’.
All transactions move through a series of stages. In CRMs, these stage are called “Opportunity Stages” (Hubspot calls them “Deal Stages”). Opportunity Stages can be customized to align with an organization’s sales process.
A consulting company might use the following Opportunity Stages:
- Open. The deal is fresh and needs to begin the sales process.
- Needs Assessment. The sales rep is working through the process of scheduling meetings and interviewing staff members to identify the needs of the organization.
- Proposal / Price Quote. The sales rep is consolidating their findings and drafting the final assessment with proposal including a price quote.
- Negotiation / Review. The sales rep is in the process of scheduling meetings to review and/or negotiate the final deliverable of the assessment and the proposal.
- Closed Won. The proposal was accepted by the potential client and the contract has been signed.
- Closed Lost. The proposal was rejected by the potential client and the contract was not signed.
Closed Won refers to an Opportunity Stage often found in CRMs labelled “Closed – Won”. It refers to the status at which an opportunity record (transaction) has been completed, increasing an organization’s revenue.
Phrases related to Closed Won include:
- I marked 40% of my opportunities this month as Closed Won.
- I have $500,000 sitting in Closed Won this quarter.
Closed Lost refers to an Opportunity Stage often found in CRMs labelled “Closed – Lost”. It refers to the status at which an opportunity record (transaction) has been rejected by a potential customer, therefore not increasing an organization’s revenue.
Phrases related to Closed Lost include:
- I’m not having a good month. 80% of my opportunities landed in Closed Lost.
- I only have $50,000 sitting in Closed Lost this quarter.
4. Reporting for Sales Operations
Reason Closed Won
Reason Closed Won is a field inside a CRM. It can appear as a text-box or as a dropdown. CRMs can be configured so that upon closing a sale, a prompt appears asking the CRM user (salesperson) to update Reason Closed Won.
The reason a company would want to track Reason Closed Won is to gain insight into why people pay for their services. This helps managers understand the true feelings of what customers value from their organization’s products or services; guiding future product/service development.
Reason Closed Lost
Reason Closed Lost is a field inside a CRM. It can appear as a text-box or as a dropdown. CRMs can be configured so that upon closing a sale, a prompt appears asking the CRM user (salesperson) to update Reason Closed Lost.
The reason a company would want to track Reason Closed Lost is understand why people are not interested in their products or services. Reason Closed Lost helps managers understand what things potentials customers really care about. By tracking Reason Closed Lost, managers can realign their strategy, positioning, and product/service development.
Average Deal Size
Average Deal Size is the average amount of money spent per transaction at an organization. Sales Managers use the calculation for Average Deal Size to forecast future sales revenue.
Phrases featuring Average Deal Size:
- Our new service was received well. The average deal size has increased 50% compared to last quarter.
- We anticipate closing 5 more customers this month. With an average deal size of $10,000, that’s $50,000 in potential sales revenue.
Days to Close
Days to Close is a calculated metric that relates to Opportunities with a ‘Closed Won’ Opportunity Stage. Days to Close calculates how many days an Opportunity took to reach the ‘Closed Won’ Opportunity Stage. By using the fields Create Date (of the Opportunity record) and Close Date (date the Opportunity Stage changed to Closed Won), we can calculate Days to Close.
- Days to Close = Close Date – Create Date