Glossary of Sales and Selling Terms
account – a customer, usually in a B2B or business-to-business organization; a major account is usually a large corporation (Top 1000) capable of significant purchases; or a national account is a customer or prospect with branches, offices or plants covering a wide territory – usually multiple states or regions. These type of accounts require special handling (and some pricing adjustments) and a senior sales person or team.
Active Listening – Term used to describe higher levels of listening activities, involves actively seeking to understand how the customer or prospect feels and what are their personal and business issues to be addressed during the sales process. Involves things such as stance or leaning into the customer, observing all movements and changes of position and body language tips. And, key is asking questions for clarity and understanding.
Added Value – the element(s) of service or product that a sales person or selling organization provides, that a customer is prepared to pay for because of the benefit(s) obtained. Added values are real or perceived; tangible or intangible. A good, reliable, honest, expert, informed sales person becomes a very significant part of the selling organization’s added value, as perceived by the customer, if not by the selling organization.
advantage – the aspect of a product or service that makes it better than another, especially the one in-situ or that of a competitor.
advertising/advertising and promotion/A&P – the methods used by a company to publicize and position its products and services to its chosen market sectors, including product launches, image and brand building, press and public relations activities, merchandising (supporting and promoting the product in retail and wholesale outlets), special offers, generating leads and inquiries, and incentivizing distributors, and agents, and arguably sales people. A&P methods are sometimes described as above-the-line (media advertising such as radio, TV, cinema, newspapers, magazines) or below-the-line (non-‘media’ methods or materials such as brochures, direct-mail, exhibitions, telemarketing, and PR); advertising agencies generally receive a commission (discount ‘kick-back’) from above-the-line media services, but not from below the line services, in which case if asked to arrange any will seek to add a mark-up.
appointment - a personal sales visit to a prospect, usually arranged by phone.
benefit – the gain (usually a tangible cost, but can be intangible) that accrues to the customer from the product or service.
buyer - most commonly means a professional purchasing person in a business; can also mean a private consumer. Buyers are not usually major decision-makers, that is to say, what they buy, when and how they buy it, and how much they pay are prescribed for them by the business they work for. If you are selling a routine repeating predictable product, especially a consumable, then you may well be able to restrict your dealings to buyers; if you are selling a new product or service of any significance, buyers will tend to act as influencers at most. See decision-makers, and the buying techniques page.
buying signal - a buying signal is a comment from a prospect which indicates that he is visualizing to whatever extent buying your product or service. The most common buying signal is the question: “How much is it?” Others are questions or comments like: “What colors does it come in?”, “What’s the lead-time?”, “Who else do you supply?”, “Is delivery free?” “Do you use it yourself?”, and surprisingly, “It’s too expensive.”
call/calling - a personal face-to-face visit or telephone call by a sales person to a prospect or customer. Also referred to a sales call (for any sales visit or phone contact), or cold call (in the case of a first contact without introduction or notice in writing).
call center – a department or company for outgoing and/or incoming (outbound/inbound) telephone calls to/from customers, commonly now extending to email communications also if useful for customer service, but not extending to email marketing. Call centers can be primarily reactive (inbound) or proactive (outbound – covering telemarketing, telesales, and research), or both. Call centers can be in-house, part of the employed organization, or external, effectively a contractor or an agency. Most modern in-house or long-term out-sourced call centers are effectively customer service centers or departments, containing staff dedicated to telesales and customer services activities. Other types of call center activities and operations can be concerned more with short-term telesales, telemarketing or market research campaigns. Run well a call/contact center is a wonderful function. Poorly run call centers are a nightmare for staff and customers alike. Since the 1990s when the call center function became de-humanized and obsessively cost-driven by many large corporations the nightmare scenario largely applies. Some call/contact centers are now such vast business units that they warrant being ‘off-shored’ (outsourced to countries with lower costs), which generally equates to corporate own-foot-shooting on a truly huge scale. A call center which is inherently liable to upset customers due to inadequate levels of customer empathy and service is quite obviously utterly self-defeating. Staff turnover is unsurprisingly a major challenge in call centers.
canvass/canvassing – cold-calling personally at the prospect’s office or more commonly now by telephone, in an attempt to arrange an appointment or present a product, or to gather information.
close/closing – the penultimate step of the ‘Seven Steps of the Sale’ selling process, when essentially the sales-person encourages the prospect to say yes and sign the order. In days gone by a Sales person’s expertise was measured almost exclusively by how many closes he knew. Thank God for evolution. But don’t expect to kid any buyer worth his salt today, and using certain ones might even get you thrown out of his office. Use with great care.
closed question – a question which generally prompts a yes or no answer, or a different short answer of just two possible options, compared to open questions, which typically begin with who, what, where, when, etc., and which tend to invite much longer answers.
cold calling - typically refers to the first telephone call made to a prospective customer. More unusually these days, cold calling can also refer to calling face-to-face for the first time without an appointment at commercial promises or households. Cold calling is also known as canvassing, telephone canvassing, prospecting, telephone prospecting, and more traditionally in the case of consumer door-to-door selling as ‘door-knocking’.
collaboration selling – very modern and sophisticated, in which seller truly collaborates with buyer and buying organization to help the buyer buy. A logical extension to ‘strategic’ or ‘open plan’ selling.
commodities/commoditized (products and services) – typically a term applied to describe products which are mature in development, produced and sold in vast scale, involving little or no uniqueness between variations of different suppliers; high volume, low price, low profit margin, de-skilled (‘ease of use’ in consumption, application, installation, etc). Traditionally the ‘commodities’ term applies to the ‘commodities markets’ which trade and set prices for fundamental commodities such as coffee, grain, oil, etc., however in a more generic sales and selling sense the term ‘commoditized’ refers to a product (and arguably a service) which has become mass-produced, widely available, easy to make, de-mystified, and simplified; all of which is almost invariably associated with a reduction in costs, prices and profit margins, and which also has massive implications for the sales distribution model and methods for taking the product or service to market. Commoditized products are amenable to mass-market and large-scale sales distribution methods and models, as opposed to specialized or high-complexity products, which tend to require closer customer support and greater expertise and advice at the point of selling and installation, and commissioning and application, if appropriate. An electric battery torch is a commoditized product that is freely available, at competitively low price, ‘off-the-shelf’ at any supermarket (or via the internet); whereas a holographic projector is only available via a specialized supplier, at relatively high cost and profit margin, potentially without a similar competing product, and requires a significant degree of technical advice and support, and possibly user-training. Similarly, a microwave oven is a commoditized product, widely available, inexpensively, off-the-self from a retail store (or via the internet); whereas an integrated commercial kitchen is a specialized system, requiring a high level of sales and selling expertise, support and installation. Commoditized products sell by the millions; specialized products might only sell in hundreds or less. All consumer products and services become commoditized over time. Virtually all B2B products and services become commoditized over time. Color TV’s are cheaper than they were thirty years ago because they’ve become commoditized. Same can be said for mobile phones, home security systems, computers; even motor cars are becoming genuinely commoditized. In our lifetimes perhaps so too will houses and buildings.
concession – used in the context of negotiating, when it refers to an aspect of the sale which has a real or perceived value, that is given away or conceded by seller (more usually) or the buyer. One of the fundamental principles of sales negotiating is never giving away a concession without getting something in return – even a small increase in commitment is better than nothing.
consultative selling – developed by various sales gurus through the 1980s by Mark Hanan among others, and practiced widely today, consultative selling was a move towards more collaboration with, and involvement from, the buyer in the selling process. Strongly based on questioning aimed at gaining useful information.
consumer – in the context of selling a consumer typically refers to a private or personal customer or user, as distinct from a business or organizational, or trade customer. Notably we see this term in the acronym B2C, which means ‘business-to-consumer’, which describes the type of business in which the transaction and relationship is between a business and a private ‘domestic’ customer. A household insurer, or an estate agent, are examples of B2C sales organizations. Retail is by its nature consumer business. A holiday company is a B2C business. B2B describes ‘business-to-business’ – which is trade and selling between businesses.
customer – usually meaning the purchaser, organization, or consumer after the sale. Prior to the sale is usually referred to as a prospect.
customer relationship management:CRM – CRM is now a commonly used term to describe the process of managing the entire selling process within a department or organization. Computerized CRM systems enable management of prospect and customer details, contacts, sales history and account development. Well known examples of CRM computerized systems are Sage’s ACT!, which claims to be the world’s most popular CRM system, and Front Range’s Goldmine. SalesForce.com is making a big push in the CRM market with its web-based system. Chief elements of a CRM system (or strategy, since the term is used to describe the process and methodology as well as the system) are:
• compilation and organization of data (prospects, customers, product, sales, history, etc)
• planning, scheduling and integrating customer development activities and communications
• analysis and reporting of all sales related activities and data
Good CRM strategy and systems are generally considered necessary for modern organizations of any scale to enable effective planning and implementation of sales (and to an extent marketing) activities.
deal - common business parlance for the sale or purchase (agreement or arrangement). It is rather a colloquial term so avoid using it in serious company as it can sound flippant and unprofessional.
decision-maker – a person in the prospect organization who has the power and budgetary authority to agree to a sales proposal. On of the most common mistakes by sales people is to attempt to sell to someone other than a genuine decision-maker. For anything other than a routine repeating order, the only two people in any organization of any size that are real decision-makers for significant sales values are the CEO/Managing Director/President, and the Finance Director. Everyone else in the organization is generally working within stipulated budgets and supply contracts, and will almost always need to refer major purchasing decisions to one or both of the above people. In very large organizations, functional directors may well be decision-makers for significant sales that relate only to their own function’s activities. See influencer.
deliverable(s) – an aspect of a proposal that the provider commits to do or supply, usually and preferably clearly measurable.
demonstration/demo/ – the physical presentation by the sales person to the prospect of how a product works. Generally free of charge to the prospect, and normally conducted at the prospect’s premises, but can be at another suitable venue, eg., an exhibition, or at the supplier’s premises.
demographics – the study of, or information about, people’s lifestyles, habits, population movements, spending, age, social grade, employment, etc., in terms of the consuming and buying public; anyone selling to the consumer sector will do better through understanding relevant demographic information.
discipline – within the context of an organization this is similar to function, i.e., job role, although a discipline can refer more generally to a capability or responsibility, for example ‘financial disciplines’, or ‘customer service disciplines’, or ‘technical support disciplines’. Discipline can of course mean separately ‘control’, others or oneself, which is certainly relevant to sales and selling, but not the reason for its inclusion in this glossary. In business-to-business selling of a complex strategic nature looking at disciplines (capabilities and responsibilities) can help to explore the different ways that people are affected by a change or proposition, which generally accompanies the sale of a product or service.
distribution/sales distribution – the methods or routes by which products and services are taken to market. Sales distribution models are many and various, and are constantly changing and new ones developing. Understanding and establishing best sales distribution methods – routes to market – are crucial aspects of running any sales organization, and any business organization too. Sales distribution should be appropriate to the product and service, and the end-user market, and the model will normally be defined by these factors, influenced also by technology and social trends. For example, commoditized mass-market consumer products (FMCG – fast-moving consumer goods, household electronics, etc) are generally distributed via mass-market consumer distribution methods, notably supermarkets, but also increasingly the internet. A lesson in changing sales distribution models, and the need for manufacturers and sellers to anticipate changes is found in the switching of book sales and CD sales from retail store distribution to websites, with the resulting demise of many retailers in those sectors. Future changes in sales distribution will see for example music transferring increasingly via online downloads, thus threatening those involved with or dependent upon physical shipping of products. B2B (business-to-business) sales distribution models have their own shape, again dependent on products and services, customer markets, technology, plus other influences such as economical trends, environmental and legislative effects, etc. Examples of B2B sales distribution models are franchising, direct sales forces (employed), direct sales forces (sales agents), telephone sales (call-centers, out-bound and in-bound), the internet (online website businesses), distributors (independent sellers who carry products and services of other manufacturers and ‘principals’), and channel partners and partnering arrangements (prevalent in telecoms and IT sectors).
empathy – understanding how another person feels, and typically reflecting this back to the other person. The ability to feel and show empathy is central to modern selling methods. Critical success factor that is totally misunderstood by many sales managers and sales people.
ethics/ethical selling/ethical business – this would not have appeared in a selling glossary a few years ago, because the line between right and wrong was a mile wide. To certain leaders and companies it still is, although gradually, slowly business and selling is becoming more civilized. Honesty, morality and social responsibility are now crucial elements in any effective selling method, and for any sustainable business. In Spring 2008 someone left a message on my answerphone. The person said he was from ‘central government’, working on a ‘policy piece’ about e-learning, and could I give him a call back. I duly called back. After several sidesteps, the ‘seller’ eventually clarified that the purpose of the contact was to sell me some advertising in a directory, supposedly endorsed or approved by a ‘government department’. This is a fine example of unethical selling, and unethical business too, since the seller was clearly following a company script and set of tactics designed to deceive. Unethical business and selling have always been wrong, but nowadays they carry far greater risks for those who behave badly. Consumers are wiser and better informed. The courts are less tolerant and more sensitive to transgressions. In all respects today poor ethics guarantee personal and business failure.
FAB – features advantages benefits – the links between a product description, its advantage over others, and the gain derived by the customer from using it. One of the central, if now rather predictable, techniques used in the presentation stage of the selling process.
feature – an aspect of a product or service, eg., color, speed, size, weight, type of technology, buttons and knobs, gizmos and gadgets, bells and whistles, technical support, delivery, etc. Also referred to a product or service detail.
field - means anywhere out of the sales office. Field sales people or managers are those who travel around meeting people personally in the course of managing a sales territory. To be field-based is to work on the sales territory, as opposed to being office-based.
forecast/sales forecast – a prediction of what sales will be achieved over a given period, anything from a week to a year. Sales managers require sales people to forecast, in order to provide data to production, purchasing, and other functions whose activities need to be planned to meet sales demand. Sales forecasts are also an essential performance quantifier which feeds into the overall business plan for any organization. Due to the traditionally unreliable and optimistic nature of sales-department forecasts it is entirely normal for the sum of all individual sales persons’ sales annual forecast to grossly exceed what the business genuinely plans to sell. See targets.
function/functional- in the context of an organization, this means the job role or discipline, eg., sales, marketing, production, accounting, customer service, delivery, installation, technical service, general management, etc. Understanding the functions of people within organizations, and critically their interests and needs, is very important if you are selling to businesses or other non-consumer organizations.
influencer – a person in the prospect organization who has the power to influence and persuade a decision-maker. Influencers will be generally be decision-makers for relatively low value sales. There is usually more than one influencer in any prospect organization relevant to a particular sale, and large organizations will have definitely have several influencers. It is usually important to sell to influencers as well as decision-makers in the same organization. Selling to large organizations almost certainly demands that the sales person does this. The role and power of influencers in any organization largely depends on the culture and politics of the organization, and particularly the management style of the two main decision-makers. See decision-makers.
intangible – in a selling context this describes, or is, an aspect of the product or service offering that has a value but is difficult to see or quantify (for instance, peace-of-mind, reliability, consistency).
introduction – the word introduction has two different main meanings in selling: Introduction refers either to first stage of the face-to-face or telephone sales call (see the Opening stage in the Seven Steps of the Sale), or the term means a personal introduction – also called a referral – of the sales person to someone in the buying organization by a mutual friend or contact. Personal introductions of this sort tend to imply endorsement or recommendation of the seller, and since they are made by an existing contact they help greatly in establishing initial trust. The value and potency of a personal introduction generally reflects the importance of the introducing person and the strength of their relationship with the buying contact. Networking is essentially based on using (sometimes several quite informal) introductions, to connect a seller with a buyer.
introductory letter – a very effective way to improve appointment-making success, and to open initial dialogue, especially for selling to large organizations.
LAMP® – Large Account Management Process – sales acronym and methodology for major accounts management developed by Robert Miller, Stephen Heiman and Tad Tuleja in their 1991 book Successful Large Account Management (see the books at the foot of this page). Note that LAMP® and Strategic Selling® methods and materials are subject to copyright and intellectual property control of Miller Heiman, Inc. Also note that LAMP® and Strategic Selling® methods and materials are not to be used in the provision of training and development products and services without a licence
lead-time – time between order and delivery, installation or commencement of a product or service.
listening – a key selling skill, in that without good listening skills the process of questioning is rendered totally pointless.
major account - a large and complex prospect or customer, often having several branches or sites, and generally requiring contacts and relationships between various functions in the supplier and customer organization. Often major accounts are the responsibility of designated experienced and senior sales people, which might be formed into a major accounts team. Major accounts often enjoy better discounts and terms than other customers because of purchasing power leveraged by bigger volumes, and lower selling costs from economies of scale.
marketing - perceived by lots of business people to mean simply promotion and advertising, the term marketing actually covers everything from company culture and positioning, through market research, new business/product development, advertising and promotion, PR (public/press relations), and arguably all of the sales functions as well. It’s the process by which a company decides what it will sell, to whom, when and how, and then does it.
margin/profit margin – the difference between cost (including or excluding operating overheads) and selling price of a product or service. Percentage margin is generally deemed to be the difference between cost and selling price, divided by the selling price ex tax (ex.- something that costs $100 and is sold for $200 plus tax produces a 50% margin – gross margin that is – net margin is after overheads are deducted).
mark-up – this is the money that a selling company adds to the cost of a product or service in order to produce a required level of profit. Strictly speaking, percentage mark-up refers to the difference between cost and selling price as a factor of the cost, not of the selling price. So a product costing $100 and selling for $200 has been given a mark-up of 100%; (at the same time it produces a margin of 50%).
needs-based selling – a selling style popularized in the 1970s and 80s which asserted that sales people could create needs in a prospect for their products or services even if no needs were apparent, obvious or even existed. The method was for the sales person to question the prospect to identify, discover (and suggest) organizational problems or potential problems that would then create a need for the product. I’m bound to point out that this is no substitute for good research and proper targeting of prospects who have use of the products and services being sold.
negotiation/negotiating – the trading of concessions including price reductions, between supplier and customer, in an attempt to shape a supply contract (sale in other words) so that it is acceptable to both supplier and customer. Negotiations can last a few minutes or even a few years, although generally it’s down to one or two meetings and one or two exchanges of correspondence. Ideally, from the seller’s point of view, negotiation must only commence when the sale has been agreed in principle, and conditionally upon satisfactory negotiation. However most sales people fall into the trap set by most buyers – intentionally or otherwise – of starting to negotiate before the selling process have even commenced.
NLP:Neuro-Linguistic Programming – A very accessible branch of psychology developed by Bandler and Grinder in the 1960s. NLP involves language, thinking and communications, and is therefore immensely useful and often features in sales training.
networking – an increasingly popular method of developing sales opportunities and contacts, based on referrals and introductions – either face-to-face at meetings and gatherings, or by other contact methods such as phone, email, social and business networking websites, etc.
objection/overcoming objections – an objection is a point of resistance raised by a prospect, usually price (“It’s too expensive..”), but can be anything at any stage of the selling process. Overcoming objections is a revered and much-trained skill in the traditional selling process, but far less significant in modern selling. Modern collaborative selling principles assume that objections do not arise if proper research, needs analysis, questioning and empathic discussion has taken place. Also the notion of using techniques or pressure to overcome what may be legitimate obstacles is contrary to principles of modern selling. Modern selling methods tend to identify objections much earlier in the process, and either to filter out the prospect at that stage and abandon the approach, or where objections arise from multiple decision influencers within the buyer organization, to agree collaboratively a strategy with the main contact at the prospective customer for dealing with objection(s) arising.
open/opening – the first stage of the actual sales call
opening benefit statement/OBS – traditionally an initial impact statement for sales people to use at first contact with prospect, in writing, on the phone or face-to-face – the OBS generally encapsulates the likely strongest organizational benefit typically (or supposedly) derived by customers in the prospect’s sector, eg., “Our customers in the clothing retail sector generally achieve 30-50% pilferage reduction when they install one of our Catch-A-Crook security systems…”
open question – a question that gains information, usually beginning with who, what, why, where, when, how, or more subtly ‘tell me about..’ – as distinct from a closed question, for example beginning with ‘Is it…?’ or ‘Do you…?’ etc., which tend to glean only a yes or no answer.
package – in a selling context this is another term for the product offer; it’s the whole product and service offering at a given price, upon given terms.
partnership selling – very modern approach to organizational selling for business-to-business sales.
perceived – how something is seen or regarded by someone, usually by the prospect or customer, irrespective of what is believed or presented by the seller, ie what it really means to the customer.
positioning – more a marketing than sales term, although relevant to experienced and sophisticated sellers, and related to targeting – positioning refers to how a product/service/proposition is presented or described or marketed in relation to the market place – with reference to customers, competition, image, pricing, quality, etc. Positioning basically refers to whether a proposition is being sold appropriately – in the right way, to the right people, at the right time, in the right place, and at the right price. A potentially brilliant business can fail because its products are not positioned properly, which typically manifests as sales people being unable to sell successfully. There might be little or nothing wrong with the sales people and their skills, and the product/service, but the venture fails because the positioning is wrong. Conversely, good positioning can rescue a less than brilliant product/service. Effective selling is not only about quality and skills – its about suitability of targeting.
preparation – in the context of the selling process this is the work done by the sales person to research and plan the sales approach and/or sales call to a particular prospect or customer. Almost entirely without exception in the global history of selling, no call is adequately prepared for, and sales that fail to happen are due to this failing.
presentation/sales presentation – the process by which a sales person explains the product or service to the prospect (to a single contact or a group), ideally including the product’s features, advantages and benefits, especially those which are relevant to the prospect. Presentations can be verbal only, but more usually involve the use of visuals, commonly bullet-point text slides and images on a computer display or projected onto a screen.
product – generally a physical item being supplied, but can also mean or include services and intangibles, in which case product is used to mean the whole package being supplied.
product offer – how the product and/or service is positioned and presented to the prospect or market, which would normally include features and/or advantages and also imply at least one benefit for the prospect (hence a single product can be represented by a number of different product offers, each for different market niches (segments or customer groupings). One of the great marketing challenges is always to define a product offer concisely and meaningfully.
proposal/sales proposal – usually a written offer with specification, prices, outline terms and conditions, and warranty arrangements, from a sales person or selling organization to a prospect. Generally an immensely challenging part of the process to get right, in that it must be concise yet complete, persuasive yet objective, well specified yet orientated to the customer’s applications. An outline proposal is often a useful interim step, to avoid wasting a lot of time including in a full proposal lots of material that the customer really doesn’t need.
proposition – usually means product offer, can mean sales proposal. The initial proposition means the basis of the first approach.
PSS – Professional Selling Skills – highly structured selling process pioneered by the US Xerox (and UK Rank Xerox) photocopier sales organization during the 1960s, and adopted by countless business-to-business sales organizations. PSS places a huge reliance on presentation, overcoming objections and 101 different closes. Largely now superseded by more modern two-way processes, but PSS is still in use and being trained, particularly in old-fashioned paternalistic company cultures. The regimented one-way manipulative style of PSS nowadays leaves most modern buyers completely cold, but strip it away to the bare process and it’s better than no process at all.
prospect – a customer (person, organization, buyer) before the sale is made, ie a prospective customer.
puppy dog sale/puppy dog close – a classic method of selling or closing a deal whereby you let the customer try the product or service for free without commitment, for a limited period, in the confidence that once they live with it they won’t want to give it up – just like giving someone have a puppy for a day. These days the puppy dog approach would ideally extend to giving the prospective customer some education and support about looking after the puppy so that they understand and are prepared for the changes that come with a new puppy.
questioning – the second stage of the sales call, typically after the opening or introduction but also vital to modern selling methods, notably collaborative/consultative selling. A crucial selling skill, and rarely well demonstrated. The correct timing and use of the important different types of questions are central to the processes of gathering information, matching needs, and building rapport and empathy. Questioning also requires that the sales person has good listening, interpretation and empathic capabilities.
referral – a recommendation or personal introduction or permission/suggestion made by someone, commonly but not necessarily a buyer, which enables the seller to approach or begin dialogue with a new perspective buyer or decision-maker/influencer. Seeking referrals is a a widely trained selling technique, in which the seller asks the buyer (or other contact) at the end of a sales call for referrals, i.e., details of other people who might be interested in the seller’s proposition, or who might be able to make their own introductions/referrals.
research/research call – the act of gathering information about a market or customer, that will help progress or enable a sales approach. Often seen as a job for telemarketing personnel, but actually more usefully carried out by sales people, especially where large prospects are concerned (which should really be the only type of prospects targeted by modern sales people, given the need to recover very high costs of sales people).
retention/customer retention – means simply keeping customers and not losing them to competitors. Modern companies realise that it’s far more expensive to find new customers than keep existing ones, and so put sufficient investment into looking after and growing existing accounts. Less sensible companies find themselves spending a fortune winning new customers, while they lose more business than they gain because of poor retention activity. (The hole in the bucket syndrome, where it leaks out faster than it can be poured in.)
sales cycle – the Sales Cycle term generally describes the time and/or process between first contact with the customer to when the sale is made. Sales Cycle times and processes vary enormously depending on the company, type of business (product/service), the effectiveness of the sales process, the market and the particular situation applying to the customer at the time of the inquiry. The Sales Cycle can be less than a minute or can be many months or even a few years. A typical Sales Cycle for a moderately complex product might be:
1. lead generated
2. qualify lead
3. arrange appointment
4. customer appointment with questions
5. verify depth of problems and consequences
6. presentation of proposal
7. and close sale
sales forecasts – also called sales projections, these are the predictions that sales people and sales managers are required to make about future business levels, necessary for their own organization to plan and budget everything from stock levels, production, staffing levels, to advertising and promotion, financial performance and market strategies.
sales funnel – describes the pattern, plan or actual achievement of conversion of prospects into sales, pre-inquiry and then through the sales cycle. So-called because it includes the conversion ratio at each stage of the sales cycle, which has a funneling effect. Prospects are said to be fed into the top of the funnel, and converted sales drop out at the bottom. The extent of conversion success (ie the tightness of each ratio) reflects the quality of prospects fed into the top, and the sales skill at each conversion stage. The Sales Funnel is a very powerful sales planning and sales management tool.
sales report – a business report of sales results, activities, trends, etc., traditionally completed by a sales manager, but increasingly now the responsibility of sales people too. A sales report can be required weekly, monthly, quarterly and annually, and often includes the need to provide sales forecasts.
sales pipeline – a linear equivalent of the Sales Funnel principle. Prospects need to be fed into the pipeline in order to drop out of the other end as sales. The length of the pipeline is the sales cycle time, which depends on business type, market situation, and the effectiveness of the sales process.
sector/market sector – a part of the market that can be described, categorised and then targeted according to its own criteria and characteristics; sectors are often described as ‘vertical’, meaning an industry type, or ‘horizontal’, meaning some other grouping that spans a number of vertical sectors, ex.., a geographical grouping, or a grouping defined by age, or size, etc.
segment/market segment – a sub-sector or market niche; basically a grouping that’s more narrowly defined and smaller than a sector; a segment can be a horizontal sub-sector across one or more vertical sectors
service contract – a formal document usually drawn up by the supplier by which the trading arrangement is agreed with the customer. Also known as trading agreements, supply agreements, and other variations.
solutions selling – a common but loosely-used description for a more customer-orientated selling method; dependent on identifying needs to which appropriate benefits are matched in a package or ‘solution’. The term is based on the premise that customers don’t buy products or features or benefits – they buy solutions (to organizational problems). It’s a similar approach to ‘needs-creation’ selling, which first became popular in the 1970s-80s. Solutions selling remains relevant and its methods can usefully be included in the open plan selling style described later here, although modern collaborative and facilitative methodologies are becoming vital pre-requisites.Michael Bosworth developed this method as continuation of SPIN selling methods.
SPIN® and SPIN® Selling – A popular selling method developed by Neil Rackham in the 1970-80s: SPIN® is an acronym derived from the basic selling process designed and defined by Rackham: Situation, Problem, Implication, Need, or Need Payoff. Note that SPIN® and SPIN SELLING® methods and materials are subject to copyright and intellectual property control of the Huthwaite Organisations of the US and UK.
Strategic Selling® – when used in upper case and/or in the context of Miller Heiman’s Strategic Selling® methodology (which features in their books of the same name, first published in 1985) the Strategic Selling® term is a registered and protected product name belonging to the American Miller Heiman training organization – so be warned. LAMP® and Strategic Selling® methods and materials are subject to copyright and intellectual property control of Miller Heiman, Inc., and again be warned that LAMP® and Strategic Selling® methods and materials are not to be used in the provision of training and development products and services without a license.
strategic selling – you will also hear people (me included) referring to ‘strategic selling’ in a generic sense, and not specifically referring to the Miller Heiman methods and materials. In a generic ‘lower case’ sense, ‘strategic selling’ describes a broad methodology which began to be practiced in the 1980s, literally ‘strategic’ by its nature (the principles involve taking a strategic view of the prospective customer’s organization, its markets, customers and strategic priorities, etc), which is described below and referred to as ‘open plan selling’. When using the ‘strategic selling’ terminology in a training context you must be careful therefore to avoid confusion or misrepresentation of the Miller Heiman intellectual property. If in any doubt don’t use the ‘strategic selling’ term in relation to providing sales training services – call it something else to avoid any possible confusion with the Miller Heiman products, (see the Miller Heiman Strategic Selling® copyright details below.
tangible – in a selling context this describes, or is, an aspect of the product or service offering that can readily be seen and measured in terms of cost and value (eg., any physical feature of the product; spare parts; delivery or installation; a regular service visit; a warranty agreement). See intangible.
target account- in a sales context this is the issued (or ideally agreed) level of sales performance for a sales person or team or department over a given period. Bonus payments, sales commissions, pay reviews, job gradings, life and death, etc., can all be dependent on sales staff meeting sales targets, so all in all sales targets are quite sensitive things. Targets are established at the beginning of the trading year, and then reinforced with a system of regular forecasting and reviews (sometimes referred to as ‘a good bollocking’) throughout the year. See forecasting.
targeting – this has a different meaning to the usual noun sense of target (above). Targeting is a marketing term – very relevant and important for sales people and sales managers too – which refers to the customers at which the selling effort is aimed, hence targeting. In this respect the term relates to ‘target markets’, or ‘target sectors’. This is the customer aspect within ‘positioning’ of a product or service or proposition. Targeting is represented by the question: Who will buy the product/service? Deciding targeting on a company scale is normally the responsibility of a marketing department or agency, but each sales person and sales team as huge potential to develop and refine their own local targeting – so as to aim their efforts at the sectors or customers which will produce the greatest results. For example – and many sales people, especially self-employed providers and traders – completely ignore the fact that sales generally come more easily from existing or previous customers than prospective new customers to whom the supplier is completely unknown. Similarly size of prospective customer is another largely overlooked aspect of targeting. Any business will naturally have more amenable sectors of potential customers than other parts of the market. Targeting is the process by which the selling organization maximizes its chances of engaging with the most responsive and profitable customers.
telemarketing – any pre-sales activity conducted by telephone, usually by specially trained telemarketing personnel – for instance, research, appointment-making, product promotion.
telesales - selling by telephone contact alone, normally a sales function in its own right, ie., utilizing specially trained telesales personnel; used typically where low order values prevent the use of expensive field-based sales people, and a recognizable product or service allows the process to succeed. It is usually an outbound sales method.
territory – the geographical area of responsibility of a sales person or a team or a sales organization. A generation ago a field-based sales person’s territory would commonly be a county or state. Now in this globalized age, where so much selling is done online and remotely by telephone rather than by expensive face-to-face selling, field-based sales people’s territories are much bigger, and can be entire countries or continental regions.
territory planning – the process of planning optimum and most cost-effective coverage (particularly for making appointments or personal calling) of a sales territory by the available sales resources, given prospect numbers, density, buying patterns, etc., even if one territory by one sales person; for one person this used to be called journey planning, and was often based on a four or six day cycle, so as to avoid always missing prospects who might never be available on one particular day of the week.
trial close – the technique by which a sales person tests the prospect’s readiness to buy, traditionally employed in response to a buying signal, eg: prospect says: “Do you have them in stock?”, to which the sales person would traditionally reply: “Would you want one if they are?” Use with extreme care, for fear of looking like a clumsy desperate fool. If you see a buying signal there’s no need to jump on it – just answer it politely, and before ask why the question is important, which will be far more constructive.
unique/uniqueness – a feature that is peculiar to a product or service or supplier – no competitor can offer it. See the marketing section for more detail about developing unique selling propositions. Uniqueness is a much overlooked aspect of selling. The vast majority of sales organizations focus their efforts on selling ‘me too’ products and services, where inevitably discussions tend to concentrate on price differences, whereas the most enlightened and progressive sales organizations strive to develop unique qualities in the propositions, which dramatically reduces competitive pressures.
UPB – unique perceived benefit – now one of the central strongest mechanisms in the modern selling process, an extension and refinement of the product offer, based on detailed understanding of the prospect’s personal and organizational needs. A UPB is your USP from the customer’s perspective, in other words, what your USP means to your customer, which is a very different way of approaching selling than from the traditional angle of seller-oriented USPs. It’s essential to discuss your offering in these terms with your customer.
USP - unique selling proposition – this is what makes the product offer competitively strong and without direct comparison; generally the most valuable unique advantage of a product or service, for the market or prospect in question; now superseded by UPB.
variable – an aspect of the sale or deal that can be changed in order to better meet the needs of the seller and/or the buyer. Typical variables are price, quantity, lead-time, payment terms, technical factors, styling factors, spare parts, back-up and breakdown service, routine maintenance, installation, delivery, warranty. Variables may be real or perceived, and often the perceived ones are the most significant in any negotiation.