Sales glossary

10 Business Management terms

this is a sales glossary to understand the field terminology with ease.

B.A.N.T

An acronym used in sales for lead qualification that stands for 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.

Churn Rate

A metric that measures how many customers you retain and at what value. To calculate churn rate, take the number of customers you lost during a certain time frame, and divide that by the total number of customers you had at the very beginning of that time frame. (Don't include any new sales from that time frame.)

Example: if a company had 500 customers at the beginning of October and only 450 customers at the end of October (discounting any customers that were closed in October), their customer churn rate would be: (500-450)/500 = 50/500 = 10%.

Cross-Selling

When a sales rep has more than one type of product to offer consumers that could be beneficial, and s/he successfully sells a consumer more than one item either at the time of purchase or later on. An example is when Apple sells you an iPhone and then successfully sells you an Apple iPhone case or a pair of Apple headphones. In this case, a sales rep identifies a need the customer has, and fulfills that need by recommending an additional product.

Customer Acquisition Cost (CAC)

This is your total Sales and Marketing cost. To calculate, follow these steps for a given time period (month, quarter, or year): Add up program or advertising spend + salaries + commissions + bonuses + overhead. Divide by the number of new customers in that time period.

Example: if you spend $500,000 on Sales and Marketing in a given month and added 50 customers that same month, then your CAC was $10,000 that month.

Flywheel

The flywheel is a new way of conceptualizing the sales process, replacing the funnel where customers are thought of as an output. The flywheel demonstrates that awareness, engagement, and delight can happen at any point during the customer journey and that the best way to achieve growth is to apply force and remove friction in each stage.

GPCTBA/C&I

G = Goals: Determines the quantifiable goals your prospect wants or needs to hit. An opportunity for sales reps to establish themselves as an advisor by beginning to help prospects reset or quantify their goals. P = Plans: Determines the prospect's current plans that they'll implement in order to achieve those goals. C = Challenges: Determines whether the sales rep can help a prospect overcome their and their company's challenges; ones they're dealing with and ones they (or the sales rep) anticipate. T = Timeline: Determines the time frame for implementation of their goals and plans, and when they need to eliminate their challenges. B = Budget: Determines how much money a prospect has to spend. A = Authority: Determines who in the organization will help champion and/or decide to make a purchase. C = Negative Consequences: Discusses the negative things that'll happen if a prospect doesn't meet their goal. I = Positive Implications: Discusses the positive outcomes that'll happen if a prospect meets their goal.

Lifetime Value (LTV)

A prediction of the net profit attributed to the entire future relationship with a customer. To calculate LTV, follow these steps for a given time period: Take the revenue the customer paid you in that time period. Subtract from that number the gross margin. Divide by the estimated churn rate (aka cancellation rate) for that customer.

Example: For example, if a customer pays you $100,000 per year where your gross margin on the revenue is 70%, and that customer type is predicted to cancel at 16% per year, then the customer's LTV is $437,500.

Middle of the Funnel (MOFU)

The stage that a lead enters after identifying a problem. Now they’re looking to conduct further research to find a solution to the problem. Typical middle of the funnel offers include case studies, product brochures, or anything that brings your business into the equation as a solution to the problem the lead is looking to solve.

Service Level Agreement (SLA)

For salespeople, an SLA is an agreement between a company's sales and marketing teams that defines the expectations Sales has for Marketing and vice versa. The Sales SLA defines the expectations Marketing has for Sales on how deeply and frequently Sales will pursue each qualified lead, while the Marketing SLA defines expectations Sales has for Marketing with regards to lead quantity and lead quality.

Weighted Pipeline

A more detailed version of a sales pipeline, in which each opportunity is given a specific value based on which stage they're in in the sales process. For example, potential buyers in the prospecting stage could be assigned a 10% chance of closing the deal, demo stage buyers 60%, closed-won 100%, and so on.

Example: A sales rep could say that, instead of having 10 prospects in her pipeline, she has 10 opportunities at 50% or greater likelihood of closing with a weighted pipeline value of $50,000.