- We need to make money to stay in business to feed and clothe and provide health insurance to our staff and their families
- Asking for money, at the right time and in the right way, is a skill
- Negotiating contracts is a skill
- We need to “qualify” whether any given person, or organization, is a realistic potential customer
- We need to understand a potential customer’s organization, so we know who needs convincing, who the ultimate buyer is, who the users and influencers are, and who can derail a deal
- We need to match our value to each of those parties concerns, needs, and goals
- We need to arm our proponents with the evidence and tools they need to champion our value, or create champions where there are none
- We need to seek out and remove, or defer, objections to purchasing
- We need to understand customers’ buying processes to provide a good experience in doing business with us, e.g. learning that the procurement team requires specific forms to be filled out and doing so proactively
- We need to forecast how much revenue the business will generate next month, quarter, year, in order to make decisions about how many people to hire, etc
The fundamental purpose of sales is to ask for money, and get it — whether that’s from new prospects just being exposed to the product for the first time or from existing customers at renewal time or from partners seeking to sell your product.
The following is organized first in terms of functions, then sales models, some misc considerations, and finally an informal definition of terms (which you might want to read first!) and a reading list.
Functionally Speaking — Pre-Sales
This is the act of interacting with leads and filtering out/in those that should get sales attention. Including, but not limited to:
- Inbound: qualify leads coming from any source as being acceptable for sales attention (SAL)
- Outbound: contact potential leads to pitch the product and qualify them (Prospect->SAL, maybe even SQL), often called “prospecting”
- Set meetings for sales reps and/or sales engineers — who will hold titles like “account executive”, “solutions exec”, “solutions”, “sales”, etc
- Discovery: learning relevant information about the lead, like tech stack and competing products being used/evaluated — basically a qualification activity
- Doing demos: how in-depth these get really depends on the nature of the product
Sales development professionals are called Sales Development Reps (SDRs) and sometimes, confusingly, Business Development Reps (BDRs). The range of activities they actually do varies widely from company to company, depending on size, sales model, customer personas, how the head of sales likes to do things, and other factors.
Sales development is sometimes outsourced to third parties who act as employees of the company when interacting with leads, the way outsourced call center staff assume employee-of identities.
Engaging in sales with leads that are.. inbound.
At larger orgs with separate, specialized sales teams, you might have Inside Sales Reps (ISRs). And SDRs might specifically be part of the Inside Sales team. And you might also have AEs who sit “above” the ISRs.
In a very large, regimented organization, leads get passed along a human pipeline that might look like Marketing > SDR > ISR > AE > AM.
Engaging in sales with leads that are.. not inbound. 😃
In practice, this typically means an outreach-driven funnel where marketing and/or sales engages in outbound tactics to reach out to prospects to turn them into leads. Including, but not limited to:
- Mining LinkedIn to find prospects that look like existing customers or existing leads, etc
- Buying lists of contacts who fit some demographics, firmographics, etc
- Using outsourced firms with proprietary lists to do the above
The tactics involved with this are generally anathema to engineers.
At larger orgs with separate, specialized sales teams, you might have outside sales reps that are called any number of things, including BDRs and AEs. Outside-specific SDRs are sometimes called BDRs.
Sometimes this is just outbound sales. But more often it’s jargon for developing sales partnerships such that a third party, like a consulting firm, either helps to sell, or directly sells, the product.
“Strategic” is a euphemism for “Big”. Strategic Sales is typically a specialized function for dealing with very large accounts and deals where the sales cycle may be many months to years, involve multiple departments and geographies, and many levels of contracts and negotiations. Generally requires some specialized experience.
Sometimes synonymous with “Enterprise Sales”
Selling to.. “enterprises”, i.e. big companies. At larger companies there are often dedicated enterprise sales reps or teams. The sales cycle tends to be long and dealing with large accounts, with multiple layers of people to convince and procurement hurdles to jump through, generally requires some specialized experience.
This used to be a generic term for the various “channels” by which something is sold, which included directly selling to customers. But over time it’s come to mean finding a specific avenue of sales, usually via a partner of some kind, that’s indirect. Including, but not limited to:
- Selling through a partner: where a partner sells your product but you book the sales. Or the partner sells your product and then turns around and buys it from you at some discount. Or many variations thereon.
- Selling to a partner, who then resells your product.
- Selling via a marketplace of some kind, where the marketplace takes some part in marketing your product and probably picks up some margin (via commission or kickback) on each transaction.
Functionally Speaking — Post-Sales
After a lead becomes a customer, sales reps are typically done and move on to closing the next deal. Account Management is the process of ensuring a good experience for a lead after they’ve become a customer and maintaining the customer relationships, i.e. ensuring the customer doesn’t churn. Including, but not limited to things such as:
- Technical support
- Access to roadmaps and engineers
- Managing renewals and expansions
- Selling additional products/services into the account
Account Manager (AM) is a dedicated role at larger companies. Where the product is very technical or engineering-y, the term Technical Account Manager (TAM) is common.
Sometimes account management is relabeled as Customer Success (CS), with the role being customer success manager (CSM).
Account management teams are generally compensated, at least in part, on the revenue brought in through renewals or expansion. Sometimes as much as pre-sales sales staff, sometimes not.
Sometimes expansion opportunities are “owned” by pre-sales sales reps who get commissions on sales of new products into existing accounts.
Sometimes “Customer Success” is just a renamed Account Management function.
Other times, Customer Success is a specialty with its own team that does not report into Sales and is not measured or rewarded on revenue generated — but rather on some measure of customer happiness or health.
Renewals and Expansion
Exactly what it sounds like: this is the process of keeping tabs on an account in order to ensure that it renews, or to pursue expansion opportunities within an account.
Functionally Speaking — Sales Support
Sales reps are not typically technically adept, so Sales Engineering provides the technical knowledge needed in the process of selling. Practically, this includes things like:
- Doing demos
- Answering technical questions
- Helping with technical onboarding, e.g. installing and configuring some code needed to do a proof of concept — although this is sometimes a specialized function with varying titles like “Integrations Engineering” or “Customer Success Engineering”, etc
Sales Engineers (SEs) may not have any engineering or science background, as the core function at many companies is doing demos and explaining product function. The more technical the product, the more technical the SEs.
This is usually a pre-sales function.
Solutions Architecture is (usually) the post-sales version of Sales Engineering. Solutions Architects (SAs) provide some amount of technical expertise to existing customers in order to help with the technical aspects of account management, or to help them solve specific use cases with the products available, etc.
This might actually just be doing SE work for renewals and expansions. But it could also be delivering new product requirements from existing customers trying to address novel use cases or putting together novel “solutions”, like a combination of an existing product plus some specialized customization.
“Solutions” roles are sometimes both pre-sales and post-sales.
When the required or demanded onboarding, integrations, and training work becomes too extensive — you’ll find yourself in professional services (ProServ, PS) territory. That’s a sign that either the product needs a ton of UX love and/or that it’s time to build a new team to support PS as a new revenue stream.
Sales Enablement is providing all the training, documentation, and assets needed to assist in the sales process. Including, but not limited to:
- Sales education on products and features (ongoing)“Assets” like datasheets, product comparisons, and case studies
- “Tools” like pricing calculators, business case generating spreadsheets, and objection handling docs
Sales Enablement is usually a product marketing function, but can also be its own role within the sales team.
Sales operations is the technology and operational aspect of running a sales pipeline. This includes selecting, buying, building, operating, scaling, and replacing (when necessary) all the tech and processes associated with running a sales process. Including, but not limited to:
- Customer Relationship Management (CRM) tools
- Sales Automation: email automation, call routing, calendar scheduling, secure document storage and sharing, lead routing, lead attribution, lead qualification, campaign attribution, marketing automation integration, data sanitation, document signing
- List building and buying
- Reporting: KPI establishment, tuning, tracking, visualization, and report generation
- Sometimes sales compensations plans and tuning
There are a handful of different, typical sales models in use in software, especially B2B SaaS (my area of expertise).
Self-service / Product-led
This is where leads turn into customers mostly on their own. So your ads, SEO, website, free trial, etc., do all the selling for you and customers put in credit card info to a form to buy directly.
Depending on the product and business model, pure self-service is often not possible. Thus the advent of chat bubbles on websites and pre-sales “success” teams or bots to staff them. Sales by any other name…
Land and Expand
Aiming to close small deals [land!] and then grow usage or sell additional things into an account over time [expand!].
Going after big deals at big accounts . This frequently involves convincing entire companies or teams to start using your product or wholesale replace something else with you. Sometimes synonymous with “Enterprise Sales” or “Strategic Sales”. Often top down.
A “field” is any way of dividing up your market (potential customer base), but is generally done geographically. So this is selling within that specific area and often involves things like running local events.
Convincing individual users and using that as a proof point to convince a whole team or company.
This is the classic SFDC case where the product was priced within the expense limits of individual sales people and then when there was enough individual usage, a package bringing all those licenses together (with volume discounts) was sold to management.
Convincing management that a product should be used and then having it chosen for their team, i.e. imposing it from above. Closely related to Whale Hunting.
There are some very formalized processes that get put to use in large sales orgs. What process, and the amount of process, you have will be highly dependent on the size of your team and the proclivities of your sales leaders.
Sales staff are sometimes referred to as being “coin operated”, i.e. highly compensation driven. Because so much of sales comp is based on things other than base salary, manipulating those variables is a way of changing sales behavior to get a given desired result.
Reserving some percentage of commission until a customer is successfully onboarded and remains a customer for some period of time is thought to incent sales staff away from closing deals with customers that are bad fits for the product.
This can go amazingly wrong, if you don’t know what you’re doing.
When to Start
As soon as you have something viable that solves a problem and have put it in front of people who validate that, ask for money — whether yourself or through the product or website.
In non-self-service-land: if you’re no good at asking for money, learn. Or get a salesperson. If you manage to get money out of a handful of people, get a salesperson.
For better or worse, most of sales is well trod ground. It’s a lot of manual labor, a fair amount of trial and error, and constant experimentation.
Many more people are going to require significant amounts of work, handholding, education, and then not buy your product.. than you could ever imagine. Learning how to disqualify early and not spend time on them is a life or death skill for sales.
Sometimes the only way to reach someone who legitimately would love to use your product to solve their problems is by cold-calling them. Some people will complain. Some will be happy. Many won’t care. Outbound sales tactics might be unsavory to you personally; get over it.
- Suspect: someone who arrives on your website or you encounter in the course of marketing/selling, like at a booth at a conference
- Prospect: someone who might possibly have some interest in buying.
- Lead: someone who might definitely have some interesting in buying (note the increase in probability).
- Raw Lead: An unqualified Lead, i.e. Suspect or Prospect
- Account: Used (unfortunately) interchangeably with Suspect, Prospect, Raw Lead, Lead, MQL, SQL, and Customer
- Qualification: The act of progressively determining the likelihood of a given Prospect/Lead being willing, able, and likely to buy
- Disqualification: The act of determining that a given Prospect/Lead is not willing, able, and likely to buy
- Marketing Qualified Lead (MQL): someone who might definitely have some interest in buying and is also from the right kind of organization, or has the right title, or has demonstrated active interest by doing something like looking at the docs and clicking around the pricing page and filing out a form, etc. MQLs is a common metric used to measure the efficacy of demand gen activities run by the marketing team (“programs, campaigns, tactics”).
- Product Qualified Lead (PQL): In the world of self-service sales, someone who becomes qualified through their behavior in interacting with the product during a free trial, in the freemium version, or even after becoming a customer in whatever tier they’re in (e.g. “PQL-ed for an upgrade offer”).
- Sales Accepted Lead (SAL): MQLs that have been validated as having sufficient probability to buy to be actively worked on by a sales rep — SAL qualification is a point of contention between marketing and sales teams regarding the quality of leads being brought in by marketing activities and the rigor of the process used by sales orgs to validate them.
- Sales Qualified Lead (SQL): SALs that have been qualified to the extent of the rep being able to say with surity that the lead has a problem that the product solves, the desire to solve that problem, and the budgetary/authority means to do it by buying the product — SQL qualification can be a point of contention within a sales team and frequently very strict, formal definitions are used (and ignored).
- Opportunity (Opp or Op): some level of qualification beyond SAL and possibly beyond SQL — opportunities are generally broken up into stages, e.g. “Stage 2 Opportunity”, which are related to the formal definitions of lead types, e.g. SQL == Stage 2 Opportunity.
- Disqualify (DQ): state that a lead is unqualified.
- Enterprise: a large company that requires a lot of work to sell to — connotation is usually “old” or “not modern”, but in reality companies like Square and Facebook are enterprises.
- On-target Earnings (OTE): compensation plan for sales staff, including base salary and any commission structure, and sometimes, expected performance bonuses — but not including things like spiffs (see below).
- Commission: the amount a sales person makes beyond base that’s based on dollars brought in. Commissions may be paid out at any cadence, but are frequently computed and distributed quarterly. They may include some conditionals that “claw back” commissions or bonuses if, for instance, the customer cancels the contract before it comes up for renewal. They may include some percentage that’s withheld conditionally, e.g. you get 75% of your commission on this deal when it closes based on bookings and the remaining 25% if the customer reaches the end of their contract term without cancelling (or maybe only if they renew).
- Spiff: extra $ awarded for specific transactions, or kinds of transactions, generally used to produce very specific sales results beyond the standard, like trying to establish a market within a specific vertical. This is not limited to an organization — e.g. you can spiff your partners’ sales reps.
- Sandbagging: under-forecasting the expected value of a specific deal, or a whole pipeline of expected bookings over some time period — i.e. setting an intentionally very low bar to beat.
- Quota: management expectations set for sales staff in terms of the amount of $ to be brought in by a rep, typically stated and re-evaluated quarterly but can be as often as monthly or only yearly — usually only applies to account execs (AEs), but may also be applied in some direct or indirect way to SDRs, SEs, TAMs, and Customer Success. Multiple, or consistent, failure to meet quote generally means people will get fired — which could just as well be sales management as well as staff.
- Quota Retirement: meeting your quota, generally expressed as a proportion of the total — e.g. “X retired 50% of her quote during the first month of the quarter.”
- Quota Relief: relaxing of a specific quota for any number of reasons.
- Deal: a specific transaction with a specific customer.
- Customer Acquisition Cost (CAC): total sales & marketing cost to acquire a paying customer
- Payback Period: how long it takes for a customer to pay off CAC before they become profitable (which is kind of naive because there is an ongoing cost to maintain/support a customer which should be factored in but is rarely done at the level of customers, instead being more of a bottom line overall COGS balance sheet item)
- [Customer] Lifetime Value (LTV): the total expected revenue a customer is expected to generate over their time as a customer with you (with the assumption that all customers eventually churn)
- Annual Contract Value (ACV): Exactly what it sounds like
- Average Selling Price (ASP): Exactly what it sounds like
- Deal Management: the project management of a deal from start to finish, which may require a dedicated person — e.g. for large dollar-value deals that involve multiple products, partners, specialized terms, and complex contracts, etc.
- Sales Cycle: the amount of time it takes to close a deal from when it enters the pipeline.
- Sales Efficiency: inverse of Payback Period, a measure of how effective sales (and marketing) are at generating revenue.
- Pipeline: the $ of all the deals forecasted at any level fo the sales org — i.e. each rep has a pipeline, but so does their team, and so does the entire sales org.
- Firmographics: the demographics of organizations for the purpose of sales and marketing — e.g. “mid-market fintech companies with >100 employees and Series C or greater funding”.
- Proof of Concept (POC): trial period, sometimes paid for by the prospective customer (Paid POC). POCs are often long or especially customized for the account. Usually involves the account using the product in real life for a specific use case and committing to any associated integration work. These are typically intended to have well defined outcomes and commitments. Paid POCs are frequently marketed as “customers” by startups, what I would call “standard bullshit”.
- Technical Decision Makers (TDMs): people at a prospective customer who have to judge your product as being technically sound and being a fit for their use case or problem.
- Business Decision Makers (BDMs): people at a prospective customer who have to judge your company, or pricing, being sound and worth buying into.. usually synonymous with “buyer”.
- Influencer: anyone at a prospective customer who has material influence on the decision making process.
- Buyer: the person who has budget and buying authority to decide on buying your thing.
- Objections: anything brought up by the prospective customer, technical or otherwise, as to why they may not buy the product.
- Objection Handling: dealing with objections, usually materialized as internal FAQs and guides used by the sales team.
- Datasheet: a document providing highlights about a product, including things like how it works, what it integrates with, scaling, etc.
- Business Case: the formal cost-benefits analysis of acquiring your product, usually built and delivered by a sales rep in the process of convincing a BDM to say yes.
- Playbook: a set of guides for sales staff that include some mix of things like this — when selling to X say Y, if you encounter competitor N say O, use Y words with TDMs and Z words with BDMs, go after verticals A-C, at scale <J units you can only discount up to K%.