Account Based SellingAccount-Based Selling (ABS)
Definition: Account-based selling (ABS) is a strategic approach in B2B sales where sales teams concentrate on high-value accounts rather than pursuing a large volume of leads. This approach involves identifying and targeting specific companies, referred to as(...)
AmortizationAmortization in Commission Sales
Definition: For commission sales, amortization refers to the spreading out of the cost of paying commissions to salespeople over the period during which they produce revenues. This system of accounting relates the expense of sales commissions with the(...)
Annual Contract ValueAnnual Contract Value (ACV)
Definition: It is an important measure for those in commission sales where SaaS (Software as a Service) and subscription-based business models are adopted. ACV is the average amount of yearly revenue a customer will generate for a business based on one contract,(...)
Annual Recurring RevenueAnnual Recurring Revenue (ARR)
Definition: Annual Recurring Revenue (ARR) is a crucial financial metric widely used in the subscription business model, including Software as a Service (SaaS) and other industries with recurring revenue. ARR calculates the predictable and normalized revenue(...)
ASC 606ASC 606 - Revenue from Contracts with Customers
Definition: ASC 606, established by the Financial Accounting Standards Board (FASB), sets the standard for revenue recognition. This comprehensive, industry-neutral framework offers detailed guidance for revenue recognition. The standard impacts(...)
AttainmentAttainment in Sales
Definition: The measurement expressed as a percentage showing how a sales representative performs above or below a set quota. It is done by dividing the actual sales performance by the quota during the same period. This is a very important metric in determining a(...)
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BANTBANT Sales Methodology
Definition: BANT, on the other hand, refers to Budget, Authority, Need, and Timeline. BANT is a commonly accepted sales qualification methodology used for spotting and targeting the best fit prospect on the grounds of the specified criteria. The history of BANT dates(...)
Base PayBase Pay In Commission Sales
Definition: Base pay is a basic salary that is provided to an employee, but it excludes benefits, bonuses, increments, or any other type of extra compensation. It is the rate at which the employee is compensated for service, normally expressed per hour, week,(...)
BonusBonus In Commission Sales
Definition: A bonus is a form of additional compensation given to an employee above their regular earnings. It is awarded to reward excellent performance, as an incentive, or as a part of an employment agreement. Bonuses can be given to both individual employees and(...)
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Capped CommissionsCapped Commissions
Definition: Capped commissions are a type of compensation paid to a person as a capped amount of commission over a designated time. That is, a situation in which a salesperson receives a commission up to a certain maximum even if they overachieve on their sales(...)
Churn RateChurn Rate
Definition: Churn rate or the rate of attrition refers to the percentage of customers that do not transact with an enterprise over a given period. It is hence a vital metric for those businesses where revenue streams are obtained from customers through repeated transactions, such(...)
Closed-LostClosed-Lost
Definition: "Closed-Lost" is a term used in sales to indicate that a potential deal with a prospect has concluded without a sale. This status is assigned when the prospect decides not to purchase the product or service after going through the sales process.
Understanding(...)
Closed OpportunitiesClosed Opportunities
Definition: Closed opportunities are sales prospects that have completed the sales cycle, resulting either in a sale (closed-won) or no sale (closed-lost). This concept is crucial for evaluating the outcomes of sales efforts and predicting future business(...)
Closed-WonClosed-Won
Definition: "Closed-Won" is a sales term used when a prospect has signed a contract or made a purchase, officially becoming a customer. This marks the successful conclusion of a sales opportunity, where the sales team has converted a lead into revenue for the(...)
Closing RatioClosing Ratio
Definition: The win rate, or conversion rate, is synonymous with the term "closing ratio." In the sales domain, it characterizes one of the fundamental salesperson effectiveness metrics or efficiency for a sales team in terms of the ability to convert a prospect to sale,(...)
CollateralCollateral in Sales
Definition: Collateral in Sales is a variety of supportive materials that help explain and promote products or services to the potential customers in the course of marketing and sales. These are diverse materials in terms of mediums that are used to support and expand on(...)
CommissionCommission In Sales
Definition: Commission is form of remuneration designed for salespeople according to their performance or realization of sale. Usually a fixed percentage of sales executed as a financial incentive that serves to motivate and reward high achievers.
Detailed Explanation
A(...)
CompensationCompensation In Sales
Compensation: Compensation is the entire remuneration, both monetary and non-monetary, granted to the employee by the employer in exchange for the work performed as per the contract of employment. This includes salaries, commissions, bonuses, and any other financial(...)
ConversionSales Lead Conversion
Definition: Conversion in sales is the process of turning a lead or a prospect into a paying customer. This key performance indicator (KPI) is essential for assessing the effectiveness of sales and marketing strategies.
Detailed Explanation
The sales conversion rate(...)
Cross-SellingCross-selling
Definition: Cross-selling is selling a customer a product that's related to the item that's being bought already so that a customer would spend more. It is the selling of a customer complementary or supplementary products.
Detailed Explanation
Cross-selling is a sales approach(...)
Customer Acquisition Cost (CAC)Customer Acquisition Cost (CAC)
Definition: Customer Acquisition Cost is the total amount of cost paid in sales and marketing for every new customer. The figure is gotten after all the sales and marketing costs for the company that can be as simple as the amount paid to advertising and(...)
Customer Lifetime Value (CLV)Customer Lifetime Value (CLV)
Definition: Customer Lifetime Value (CLV) is an important business metric that measures the total net value of a single customer account across the entire relationship with a business. It stretches from the time a customer buys for the first time to the time of(...)
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DealSales Deal
Definition: A Deal in sales is a formal agreement to exchange goods, services, or financial instruments under specified conditions between a seller and a buyer. It is the core of the sales activity and successful culmination of the sales process, where both parties agree to the(...)
Direct SalesDirect Sales
Definition: Direct Sales is a strategy, which a corporation uses to sell its products and services directly to consumers by getting rid of middlemen or retailers. This technique allows a firm the provision of personal contact with its customers, which can be in the form of an(...)
Discovery CallDiscovery Call
Definition: A Discovery Call is an initial conversation between the seller and a buyer with the intention of obtaining the necessary information that would help the seller to focus on the problems, needs, and business objectives of the buyer. The basic objective of this call is(...)
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Fixed RateFixed Rate in Commission Sales
Definition: A fixed rate in commission sales is an incentive in sales where salespersons are compensated with a predetermined fixed amount for every sale that is made, regardless of the total value of the sale. This rate does not vary with the size or value of(...)
ForecastingForecasting In Sales
Definition: Forecasting Sales is the estimated amount of a company's potential sales over a certain period based on historical data or other relevant sales information through analysis and study of market trends. This helps an organization to make appropriate decisions(...)
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Go-To-MarketGo-To-Market (GTM) Strategy
Definition: A Go-To-Market (GTM) Strategy is an articulate action plan put in place by a company to introduce a product or service into the market. It shows how the business gets to the targeted customers and attains a competitive advantage. In explicit terms, the(...)
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Hard SellHard Sell
Definition: Hard sell is an over-aggressive mode of selling that involves forcing people to buy products on the spot. The technique is characterized by aggressiveness using high-pressure methods that basically compel a customer to buy something whether he is comfortable or(...)
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IncentiveSales Incentive
Definition: In sales, an Incentive can be defined as something of monetary value, which is offered in the form of a reward or compensation, to motivate the salespeople to attain a certain set of sales targets, performance levels, and is used as a tool to drive business(...)
Incentive Compensation ManagementIncentive Compensation Management
Definition: Incentive Compensation Management (ICM) is a process and set of tools that are used to design, implement, and manage payment plans for employees, mainly salespeople. Such a strategic management tool is aimed at motivating employees to achieve(...)
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Key Performance IndicatorsSales Key Performance Indicators (KPIs)
Definition: Key Performance Indicators (KPIs) in Sales are measurable values that demonstrate how effectively a company is at successfully selling its products or services. KPIs enable a sales organization and its sales manager to track performance and(...)
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LeadLead
Definition: A Lead in sales is a customer or an organization that has shown interest in a product or a service that a company provides, which in turn can be thought of as a potential opportunity to sell. Leads often have volunteered contact information or in some other way have indicated(...)
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Management by ObjectivesManagement by Objectives (MBO)
Definition: Management by Objectives (MBO) is a strategic management model intended to improve the performance of an organization by clearly defining the objectives that are mutually agreed upon by both management and employees. It emphasizes setting clear,(...)
MarkupMarkup
Definition: Markup is the selling price of a good or service above its cost. It is typically expressed as a percentage over the cost and represents the extra price added to the cost price to cover overhead and profit.
Detailed Explanation
Markup is a crucial component of pricing(...)
MilestoneMilestone
Definition: A milestone is a significant event or accomplishment that marks a critical point in the sales process. The indicator is used to measure the progress of the sales activities and guides the sales team, thereby aligning the sales efforts with the overall business(...)
Monthly Recurring RevenueMonthly Recurring Revenue (MRR)
Definition: Monthly Recurring Revenue (MRR) is a critical business metric that helps in assessing the predictable and stable stream of revenues that a business expects on a monthly basis from customers subscribed to the business. The SaaS industry mostly uses(...)
Multi-Rate BonusMulti-Rate Bonus
Definition: A Multi-Rate Bonus is a variable compensation in sales, in which the level of bonus varies based on achievement vis-à-vis pre-set individual's performance targets. Unlike single-rate bonuses, which award a fixed sum for every achievement, multi-rate bonuses adjust(...)
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On-Target EarningsOn-Target Earnings (OTE)
Definition: On-Target Earnings (OTE) the total amount of salary that a salesman is supposed to be rewarded in case the required expectations of performance levels are met. It is the basic salary that is fixed and the commission that is variable, depending on the(...)
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Pay MixPay Mix
Definition: Pay Mix is the proportion of base pay to variable in a sales compensation package. This mix determines the percentage of a salesperson's total compensation that is fixed and what percentage is variable, in the form of commissions and bonuses based on performance. Pay Mix(...)
PipelineSales Pipeline
Definition: A sales pipeline is a visual graphical representation of the stage that prospects are in within the sales process. It is a tool that is used by sales teams to understand the stage a given prospect is in, right from the initial interaction until closing. The pipeline(...)
Profit MarginProfit Margin
Definition: Profit Margin is a financial metric that gauges the profitability of a company with respect to its sales; it is the percentage of profit a company makes out of its total revenue. It tells how many cents of profit has been generated for each dollar of sale. Profit(...)
ProspectProspect
Definition: A Prospect is one who, having been qualified, indicates that he or she is potentially interested in buying a service or product. In the sales stream, a prospect is more advanced than a lead and considered to be more likely to be customer.
Detailed Explanation
A prospect(...)
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QuotaQuota
Definition: Sales Quota is a definite target or objective set for salespeople to achieve within a set period of time. The target may be in terms of total sales, volume of products sold, or activities done. Quotas support in appraising and motivating both persons and teams in(...)
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Sales EnablementSales Enablement
Definition: Sales enablement is a strategic, cross-functional discipline designed to increase sales results and productivity through integrated content, training, and coaching services for salespeople and front-line sales managers across the entire customer buying journey,(...)
Sales EngagementSales Engagement
Definition: Sales Engagement is the level of interaction and communication that takes place between salespeople and their prospects and existing customers, throughout the selling cycle. It is a comprehensive term used for each touchpoint from the time of the first contact,(...)
Sales Performance ManagementSales Performance Management (SPM)
Definition: Sales Performance Management (SPM) is an organizational approach that is strategic and focused on enhancing the efficiency and effectiveness of the sales force. SPM includes the processes of planning, training, monitoring, and appraising the(...)
Shared CommissionShared Commission
Definition: Shared commission is a type of sales compensation whereby income is shared between several salespersons or the overall team depending on their performance as a group. It, therefore, creates a culture of collaboration and teamwork since in most cases, every(...)
Soft SellSoft Sell
Definition: Soft sell is the way of selling that is much gentle, quiet, not so aggressive, and in most cases different from hard sell in the sense that it doesn't push the product or service hard, but on the contrary, it tries to create some kind of relationship with the prospect(...)
SPIFUnderstanding SPIF in Sales
Definition
SPIF, or "Sales Performance Incentive Fund," is a short-term incentive used to motivate salespeople. It often comes in the form of bonuses, prizes, or other rewards and is designed to drive immediate sales results.
Details
SPIFs are temporary(...)
Split CommissionSplit Commission
Definition: A split commission is a sales compensation structure in which there is more than one person who shares in the commission for a sale. They are usually used in those instances when more than one representative works on gaining a single sale, or when differing roles(...)
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Tiered CommissionTiered Commission
Definition: Tiered commission structure is a kind of sales compensation plan that pays different commission rates based on the achievement level of the sales representative. The rationale of the model is to induce better performance in salespersons by increasing the(...)
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UpsellingUpselling
Definition: Up-selling means a selling technique in which a seller entices the buyer to purchase more expensive items, upgrades in the product or add-ons to make a more valuable sale. It is defined as the practice of selling in which a customer buys a higher-end, superior, or(...)
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Value Chain Value Chain
Definition: The Value Chain is the full range of activities that are run by businesses in their quest of delivering their products or services to the market and adding increasing value for the customer.
Detailed Explanation
In a sales context, the value chain encompasses all(...)
Value PropositionValue Proposition
Definition: A Value Proposition is a clear, concise statement that communicates why a customer should buy a product or service, and which indicates the benefits and value to be received.
Detailed Explanation
The value proposition is a segment of the overall marketing and(...)
