TSIA Expand Selling research is designed to help our member companies grow revenue from their existing customers. However, this can’t happen without effective collaboration between Sales and Services, which means that there needs to be some shared understanding between these two functions.

To help you improve cross-functional collaboration, I’m going to provide some insight into the language and world of Sales so that the non-salespeople within your organization can better understand their challenges, specific KPIs, and identify opportunities for better communication. This way, all of your internal teams can work together more effectively to not only grow revenue, but also improve customer outcomes.

Common Sales Terms and What They Mean

A big part of collaborating with Sales is learning their language, which is key to understanding what makes them tick and establishing credibility with them as someone who is familiar to their world. I’m going to share some terms that are commonly used in the world of Sales. Some may or may not be familiar to you, but they’re commonly understood by people who have “carried a bag.” Speaking of which…

Carrying a Bag

This term simply refers to being in Sales. It harkens back to when salesmen would carry what they were selling around as a demo, but people now use it as a euphemism for being a quota-bearing salesperson. In fact, when salespeople want to devalue a non-salesperson’s experience, they often say “They’ve never carried a bag.” The implication, of course, isn’t that the person in question is lugging around a purse or briefcase, but that the non-bag carrier doesn’t understand their world and therefore isn’t credible to them.

Commission

Payment above and beyond base salary for Sales. Commission is usually based on a percentage of the deal closed, margin, or other factors and can be paid out quarterly or annually. For most sales execs, commission makes up 40-50% of their total compensation. The transition to XaaS and subscription-based models has caused real crises in commission payments, as the bulk of the customer payment is no longer received Net 30 from the signature.

Forecast

The projected amount of sales that a rep, manager, or company is expected to close. These are deals that are actually expected to come in, which means that Sales is very much on the hook for these deals for that quarter or year. This is customarily done by applying a percentage-based algorithm to the projected dollar amount of the deal(s) rather than simply guessing, though the Sales manager can adjust as the reality of the sales cycle dictates.

Quota

The revenue target that each Sales rep or manager is responsible for securing. Something to keep in mind: Quotas are not the same as an MBO, but are hard numbers; revenue targets for new revenue that doesn’t exist right now. Usually, quotas are assigned annually. Salespeople don’t always have to hit their quota by themselves. For example, in many cases, deals can come through channel partners but can still be counted towards their quota.

Funnel

A more conceptual view of the pipeline, this is the journey an opportunity goes from being a prospect or a lead on to becoming a closed deal. The funnel describes the progression of deals through the sales process more than what any individual is working on, and looks like this:

what the sales funnel looks like  

(Click image to enlarge.)
What the sales funnel looks like.

Lead

Leads are what everyone’s looking for. It’s a hand raise from a prospect or other indication of an interested prospect that could turn into a sales opportunity with a good chance of closing. Leads can come from Marketing, Sales Development reps, or increasingly from Services.

Qualifying a lead means that you’ve validated and confirmed that there’s a reasonable chance that it could turn into an opportunity that is worth spending time and effort to bring to closure. This process is called “Qualification”. Once a lead is qualified and converted to an opportunity, that’s generally where it hits the forecast and the salesperson is held accountable for closure.

What is a Lead?

This term deserves a bit more of a deep dive, because at the end of the day, leads are the lifeblood of your sales cycle. Recently, I’ve noticed some discrepancy in what Sales considers to be a “lead” and what others think it should be, so I want to take a minute to explain our own perspective at TSIA on not only what a lead is, but also what a lead is not.

A lead is:
  • A piece of actionable insight
  • A hand raise or explicit show of interest by a prospect
  • A prospect crossing the chasm to make their identity known
  • The first time they’ve engaged
 
A lead is not:
  • Someone who should be a prospect/customer
  • Someone from a list
  • Someone ready to buy right now

So How Do I Know if a Lead is Qualified?

Generally, for a Lead to become a qualified opportunity, it needs to meet the BANT criteria, which is an acronym Sales is all too familiar with, but non-salespeople may not be. It means that each of the four aspects below has been clearly outlined and identified:

Budget (Do they have money to make the purchase, and where will it come from?)
Authority (Does the person in question have the authority to execute the order?)
Need (Is there a clearly-articulated problem that our offerings can solve?)
Timeline (When are they looking to make a purchase?)
 
Once a qualified lead becomes an opportunity that is logged in your CRM, that’s when the Sales team is on the hook for whether or not it moves through the remainder of the funnel into the closed or won area. 

What’s Changing in the World of Sales?

The transition to from a traditional Transactional model to a recurring-revenue Contractual model has put immense pressure on Sales organizations. For one thing, the deals that make it all the way through the funnel to closure are shrinking. Increasingly, business buyers, rather than IT departments, are making the purchasing decisions. Therefore, they’re only buying a portion of your offerings to meet a very specific need. If you don’t have a plan and a process to grow customers after that initial purchase, reps and companies will miss their revenue targets. This is where Services teams can play a big part in finding and driving upsell opportunities.

In my next blog post, I’ll take a deeper look into the challenges that Sales teams are facing right now and what that means for the Services leaders who depend on their Sales counterparts to make their numbers. We’ll even provide some tips on how to help yourself by helping Sales, some of which you can hear about in my on-demand webinar, "A 30-Minute Crash Course on the World of Sales". In the meantime, take these steps to better understand Sales and get to know what makes them tick:

  1. Watch their movies. Almost every veteran salesperson I know quotes the movie Glengarry Glen Ross incessantly. Also take the time to watch The Wolf of Wall Street, Boiler Room, Tin Man, and Tommy Boy. Oh, and watch them all well after the kids have gone to bed. We in no way endorse the tactics shown in these movies, but salespeople love them, quote, and reference them.
  2. Read their books: Start with The New Strategic Selling from Miller-Heiman, but a quick search on Amazon will give you some great reads.
  3. Take a salesperson to lunch. They’re really nice people, actually (for the most part). Ask them questions that you always wanted to know but were maybe afraid to ask. Most salespeople really do want to help, and you’d be amazed by the warm reception you’ll get when you show some curiosity and empathy about their world.
 
 
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Steve Frost

About Author Steve Frost

Steve Frost is the vice president of expand selling research for TSIA. Throughout his career, he has held various leadership and business development roles at companies like Google, Netscape, and Loudcloud, helping them define their go-to-market strategy and business development tactics. Steve is dedicated to helping technology organizations understand and implement new sales approaches that are both helpful and contextual to their customers, as well as utilize services touchpoints to drive new leads, increase revenue, and provide better customer outcomes.

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