26 Sales Terms Every Marketer Should Know | Business Vocabulary 101

You might think that your vocab-learning days  ended as soon as you graduated high school,  
but that’s where you’d be wrong.  While you might not need words like  
“antidisestablishmentarianism” in your  day-to-day work, the business world is  
full of its own jargon. In order for  you to be successful at driving sales,  
you need to be familiar with the  terminology involved in the sales process. 
In this video, we’re gonna cover 26  sales terms that you need to know. 
Let’s start with a few basic sales terms  that are important for every business. 
First, we have the term “business-to-consumer,”  or B2C. B2C is used to describe a type of business  
aimed at individual consumers. There are all  kinds of B2C industries out there, including  
retail, healthcare, entertainment, and more. Then we have the term “business-to-business,”  
or B2B. Whereas B2C companies sell to  consumers, B2B companies sell to — you  
guessed it — other businesses. So, if you  sell something like financial consulting  
services or fabricated metal products to  other companies, you’re a B2B business. 
Onto our next term — decision-maker. A  decision-maker is someone who… well… makes  
decisions. Often, these are purchase decisions. In  a B2B setting, that may mean the business owner,  
a CFO or a marketing manager. These are the  people that B2B sales campaigns should target. 
A buyer persona is a fictional representation  of the type of person you want to target  
with your sales. For B2C companies, your  buyer persona would represent a customer,  
whereas for a B2B company, it would represent  a decision-maker at your target companies. 
An ideal customer profile, or ICP, is similar to  a buyer persona, but they’re not the same thing.  
Instead of creating a fictional representation  of your customers, an ICP lists out the traits  
that an ideal customer would have. And an ICP actually focuses on the  
companies you’d like to work with, not the  individual decision-makers who work there. 
A CRM platform is a tool that  lets you gather, store, organize,  
and analyze data about your customers. It pulls  that data from your website or other tools and  
helps you centralize it in one place. You can benefit from having a CRM,  
because it lets you learn a lot more about  your customers and hone your sales techniques  
as a result. Plus, a lot of CRMs come with  cool features like sales automation. Sales  
automation will perform routine tasks for  you instead of you having to do it manually. 
Now let’s take a look at some terms related  to sales leads. But what is a lead, exactly? 
A lead is someone who takes an interest in what  you sell, but hasn’t purchased from you quite yet. 
So, if you were a potential customer, you  start off knowing nothing about a business.  
Then you learn about the business and get  kind of interested in what they offer. And  
finally you get interested enough that you  decide to buy. A lead is that middle step  
where you’re in the process of making a  decision and learning about your options. 
A marketing qualified lead, or MQL, is a lead  that the marketing team decides is worth sending  
over to the sales team. These leads have shown  an interest in your products or services, and  
they’re far enough along in the marketing process  that it’s time for the sales team to take over.
A sales accepted lead, or SAL, is a lead  that your sales team deems worth talking to  
after some initial research. Basically, someone  becomes an MQL when the marketing team decides  
they’re ready to go over to the sales team, but  the sales team still has to accept them. When  
they do, the lead becomes an SAL. A sales qualified lead, or SQL,  
is a lead your sales team decides is worth  bringing on as a customer. This happens after  
the sales team decides that someone is a  good fit for your business. SQLs are the  
ones that you really work toward converting. Lead scoring is a system for prioritizing your  
leads. Sometimes you’ll have a lot of leads  at once, and you’ll want to know which ones  
to focus your efforts on. Lead scoring allows you  to develop criteria for what makes a good lead,  
assign values to each criterion, and rank your  leads based on how many of those criteria they  
meet. You can then prioritize the highest-scoring  leads since they’re deemed more likely to become  
a customer and bring revenue to your business. A sales funnel is a visual representation of the  
customer journey. At the top of the “traditional”  funnel, there are a lot of prospective customers,  
but only some of those people  make it to the bottom and convert. 
Our next term is sales forecasting. Just like  a weather forecast predicts things like rain  
and snow, a sales forecast predicts what your  sales and revenue will look like down the road.  
You can make these predictions based on data, like  previous sales, and then you can use the forecast  
to help plan your operations. Our next batch of terms  
focuses on the sales pipeline. A sales pipeline is a model that represents  
the stages your customers go through on the way  to conversion. It’s different from a sales funnel  
because a funnel focuses on conversion rates,  when a pipeline focuses on customer actions. 
Every sales pipeline looks different, but let’s  define a few of the most common pipeline stages. 
A sales cycle is the full sales process  that happens for a single customer. So,  
the pipeline covers all your customers, but each  individual customer has their own sales cycle that  
lasts from the time they first start engaging  with you to the time they become a customer. 
The first sales pipeline stage is prospecting.  This is basically your top-of-funnel marketing  
stage, where you’re trying to attract  new prospects that fit your ICP. A great  
way to do this is to put out targeted  content, especially via ads or emails,  
to get people interested in your brand. The next stage is lead qualification,  
which is where you weed out the people who  are just browsing and lock in on the people  
who are actually going to bring growth to your  business. You can use more targeted content,  
like downloadable guides or gated videos,  to draw people in and learn more about them,  
even getting their contact info if you  didn’t already get that out of them. 
After you meet with your leads and get to know  them more, you’re ready for the proposal stage.  
In this stage, you should have a very solid idea  of what your business can do for your leads. It’s  
just a matter of getting it down on paper and  convincing your lead to become a customer. So,  
once you’ve assessed their needs and shown  them what your business can offer them,  
you draw up a proposal for your services. After a successful pitch and proposal comes  
the close. This stage is simple — it’s where  your leads decide to buy your product or  
service and become customers. It’s called  “close” because you’re closing the deal,  
likely signing a contract. There may be some negotiation  
before you make things official, especially if  what you offer requires a large investment. So,  
just be patient and ready to make a deal. Finally, we have customer retention. If  
you thought the sales pipeline ended with the  sale itself, you were wrong. After the sale,  
you want to deliver the product or service to  the customer, and then you want to keep providing  
them with good customer service that encourages  them to come back and buy from you again later. 
That covers the sales pipeline.  Now, for our last six terms,  
we’ll be focusing on sales metrics and analytics. Our first analytics term is key performance  
indicator, or KPI. A KPI is a metric — in this  case, a sales metric — that gives you valuable  
insights into the kinds of results your campaigns  are driving. Now that we’ve defined that term,  
let’s define a few important sales KPIs. Churn rate is a measurement of how many customers  
stop doing business with you during a given  period. This is very relevant for businesses with  
long-term clients. To calculate it, you divide  the number of lost customers by the total number  
of customers you had, and then multiply by 100. Close rate is the percentage of leads who become  
customers. To calculate it, just divide the number  of converted leads by the total number of leads,  
and then multiply by 100. So, if you have  50 leads during a given quarter and 20 of  
those leads convert during that quarter,  your close rate for that quarter is 40%. 
Another important sales metric is customer  acquisition cost, or CAC. This metric measures  
how much it costs to acquire the average customer.  After all, marketing and sales efforts cost money,  
so you want to make sure you’re not spending  more than you’re earning on each conversion. 
To calculate CAC, you have to figure out which  marketing and sales expenses you count toward  
your conversions. Then you just add up  all those expenses for a given period,  
and divide by the total number of  customers you earned during that period. 
Next is customer lifetime value, or CLV. CLV  measures how much monetary value you can expect  
a customer to bring to your company over the  whole course of their relationship with you.  
Calculating this is a little tricky,  but the simplest way is to multiply  
customer value by average customer lifespan. Our final sales term for this video is annual  
recurring revenue, or ARR. This metric measures  how much money you earn per year from recurring  
payments like subscriptions and contracts,  if your company makes revenue that way. 
There you go! That’s 26 valuable sales terms for  your business, defined. I hope you were paying  
attention, because now we have a vocab test. … OR, I guess instead of a vocab test,  
you could just subscribe to our YouTube  channel. That’ll work. Your choice. 
Anyway, that’s all for this video. Thanks so much  for watching, and I’ll see ya in the next one!