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Sales And Selling Terms - Business Glossary

Accompaniment visit / report - when a manager or supervisor or trainer accompanies a sales person while working on the sales territory, usually while meeting prospects or customers. Typically the manager would complete a an accompaniment visit report on the performance of the sales person, which would be discussed, and suitable follow-up actions or training agreed.

Account - a customer, usually a business-to-business organization; a major account is a large organization; a national account is a customer with branches or sites that constitute a nationwide coverage, which typically requires special pricing and senior sales attention.

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 and perceived; tangible and 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 - the methods used by a company to publicise 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 enquiries, and incentivising 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, business publications,...) 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.

Buying signal - a buying signal is a comment from a prospect which indicates that he is visualising 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 colours 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."

Buying warmth - behavioural, non-verbal and other signs that a prospect likes what he sees; very positive from the sales person's perspective, but not an invitation to jump straight to the close.

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).

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. See the many examples of closes and closing techniques in the Seven Steps section, but don't expect to kid any buyer worth his salt today, and using one might even get you thrown out of his office. Use with great care.

Coaching / Coach - Business coaching focuses on helping a business owner to create a distinctive business plan with its own identity. Business coaching can operate in any segment of commerce: from traditional businesses to entrepreneurial start-ups to e-businesses. See BizEntrepreneur.com & CoachZilla.com

Collaboration selling - also known as collaborative selling and facilitation 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.

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 (consultation selling) - developed by various sales gurus through the 1980's by Neil Rackham and David Sandler among others, and practiced widely today, consultative selling was a move towards more collaboration with, and involvement from, the buyer in the selling process.

Customer - usually meaning the purchaser, organization, or consumer after the sale. Prior to the sale is usually referred to as a prospect.

Cycle - see sales cycle.

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.

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 means the same as function, ie job role.

Entrepreneur - [en·tre·pre·neur] - A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake]. See BizEntrepreneur.com

FAB's - 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., colour, speed, size, weight, type of technology, buttons and knobs, gizmos, bells and whistles, technical support, delivery, etc.

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.

Function - 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.

Gestation period - sale gestation period typically refers to the the time from enquiry to sale, the Sales Cycle in other words, (see Sales Cycle). Aawareness and monitoring of Sale Gestation Period/Sales Cycle times are crucial in sales planning, forecasting and management, for individuals sales teams and sales 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). See tangible.

Introduction - first stage of the actual sales call.

Lead-time - time between order and delivery, installation or commencement of a product or service.

Lead generation - an essential business process to consistently acquire long-term, quality clients through the design, production, and placement of media messages through optimal media channels. See Lead Generation Books.

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 (eg something that costs $1 and is sold for $2 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 €1 and selling for €2 has been given a mark-up of 100%; (at the same time it produces a margin of 50%).

Needs-creation selling - a selling style popularised in the 1970's and 80's 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. See Negociation Books.

Objection - 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.

Open / opening - the first stage of the actual sales call (typically after preparation in the Seven Steps of the Sale). Also called the introduction.

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 Crooknabber security systems..." - N.B. The OBS is a relatively blunt instrument for modern selling - use it with extreme care for fear of looking like a total twerp.

Open plan selling - a modern form of selling, heavily dependent on the sales person understanding and interpreting the prospect's organizational and personal needs, issues, processes, constraints and strategic aims, which generally extends the selling discussion far beyond the obvious product application; (in a way, it's rather like combining selling with genuinely beneficial, free, expert consultancy).

Open question - a question that gains information, usually beginning with who, what, why, where, when, how, or more subtly 'tell me about..'

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. See also Recommended Sales Books & Selling Techniques

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.

Pipeline - see sales pipeline.

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. Can incorporate a video and/or physical demonstration of the product(s).

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.

Professional selling skills or PSS - highly structured selling process pioneered by the US Rank Xerox photocopier sales organization during the 1960's, and adopted by countless business-to-business sales organizations, normally as the 'Seven Steps of the Sale', ever since. PSS places a huge reliance on presentation, overcoming objections and umpteen different closes. Largely now superseded by more modern 'Open Plan' 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.

Questioning - the second stage of the sales call, typically after the opening or introduction in the Seven Steps of the Sale. 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.

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 enquiry. The Sales Cycle time is also referred to as the Sale Gestation Period (ie from conception to birth - enquiry to sale). The sales cycle in a sweet shop is less than a minute; in the international aviation sector or civil construction market the Sales Cycle can be many months or even a few years. A typical Sales Cycle for a moderately complex product might be:

1. Approach 2. Qualification 3. Agreement On Need 4. Sell The Company 5. Fill The Need 6. Act Of Commitment
7. Present proposal and CLOSE sale.

Sales funnel - describes the pattern, plan or actual achievement of conversion of prospects into sales, pre-enquiry and then through the sales cycle. So-called because it includes the conversion ratio at each stage of the sales cycle, which has a funelling 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. See also Books Selling Techniques.

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, eg., 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.

Solutions selling - a common but loosely-used description for a more customer-orientated selling method than the Seven Steps; 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 the SPIN® selling process (situation, problem, implication, need), and the whole idea of needs-creation selling, which first became popular in the 1970's-80's. Solutions selling remains relevant and its methods can usefully be included in the open plan selling style described later here.

Steps of sale - describes the structure of the selling process, particularly the sales call, and what immediately precedes and follows it. Usually represented as the Seven Steps of the Sale, but can be five, six, eight or more, depending whose training manual you're reading.

Strategic selling - open plan selling, in which seller identifies strategic business aims of the sales prospect or customer organization, and develops a proposition that enables the aims to be realised. The proposition is therefore strongly linked to the achievement of strategic business aims - typically improvements in costs, revenues, margins, overheads, profit, quality, efficiency, time-saving and competitive strengths areas. Strong reliance on seller having excellent strategic understanding of prospect organization and aims, market sector situation and trends, and access to strategic decision-makers and influencers. See also Books Selling Techniques.

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).

Target / sales target - 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.

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., utilising specially trained telesales personnel; used typically where low order values prevent the use of expensive field-based sales people, and a recognisable product or service allows the process to succeed.

Tender - a very structured formal proposal in response to the issue of an invitation to tender for the supply of a product or service to a large organization or government department. Tenders require certain qualifying criteria to be met first by the tendering organization, which in itself can constitute several weeks or months work by lots of different staff. Tenders must adhere to strict submission deadlines, contract terms, specifications and even the presentation of the tender itself, and usually only suppliers experienced in winning and fulfilling this type of highly controlled supply ever win the business. It is not unknown for very successful tendering companies to actually help the customer formulate the tender specification, which explains why it's so difficult to prise the business away from them.

Territory - the geographical area of responsibility of a sales person or a team or a sales organization.

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. 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.

Unique Perceived Benefit / UPB - 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.

Unique Selling Poing / USP - or 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.


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