The sales generation stage is where startups begin to carve out their position in the marketplace. Successful startups reach out to customers in innovative ways while also maximizing the amount of customers arriving through their funnel. These companies critically evaluate their sales methods and quickly determine which sales strategies work.
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Sales & First Customers
Advertising to Sales Ratio - A metric used to measure the effectiveness of an advertising campaign, conducted by comparing the amount spent on advertizing to the increase in sales.
Always Be Closing (ABC) - A phrase used in retail describing a sales strategy wherein the salesperson is constantly seeking new customers and cutting through small talk.
Average Size of Sale - The average dollar amount brought in by each individual sales contract.
Benchmark - The metric used by a company to gauge their success. (see If You Don’t Run Your Company Based on Metrics, Here’s How You Can to learn more)
Bookings - A contract between a company and a customer, where the customer agrees to pay the company for a product or service.
Closing Rate - A measurement for sales effectiveness determined by the number of proposals per sale.
Conversion Funnel - An individual’s journey to discovering a product and becoming a customer. (see What Should You Do When Your Product is Launched? for more info)
Conversion Rate - The ratio of closed deals and secured customers compared to the amount of prospective customers at various stages of the funnel.
Customer Relations Management (CRM) - Practices and strategies to analyze customer interactions with the ultimate goal of improving business relations and achieving customer satisfaction.
Early Adopter - Individual or business who discovers and uses a product before others.
Early Majority - First sizeable segment or customer group to adopt a new product.
Hard Sell - A pitch style designed to get a consumer to purchase a product in the short-term, without allowing the consumer time to wait and analyze alternatives.
Laggards - A segment of a target market who are hesitant to adopt a new product.
Late Majority - The last major customer segment to adopt a product.
Leads - A prospective customer who has provided their contact information to a company.
Letter of Intent (LOI) - A business document outlining the terms of a deal, often between two separate companies.
Loss Leader Pricing - Selling a product at a loss in order to build a customer base.
Market Segmentation - The grouping of prospective buyers based on their common needs and their response to various forms of marketing.
Net Sales - The amount of sales generated by a company after deducting returns, damaged, and missing products.
Onboard - Reaching out to new customers in an attempt to establish brand loyalty.
Pipeline Value - The value of all sales opportunities existing within a funnel.
Price Point - The suggested retail price of a product, often designed to be competitive with the price of alternatives. (see How to Build a Relatively Accurate Startup Budget)
Price to Sales Ratio - A ratio comparing a business’ market capitalization with its revenue.
Qualifying Opportunities - The process of determining if a particular lead has a specific characteristic that would classify that lead as a member of the target market.
Request for Proposal (RFP) - A form of bidding solicitation wherein a company announces the availability of funding for a particular project. This allows other companies to bid upon who will fund this project.
Sales Cycle Time - The average number of days that a potential customer sits in the sales funnel.
Sales Draft - Often used in the discussion of sales involving credit cards, a sales draft is a summary document indicating that a cardholder has made a purchase.
Sales Funnel Leakage - A term for the amount of potential customers who are eliminated from the sales funnel at different stages.
Sales Mix - A term used by company who sell multiple products to gauge the relative amount of sales for each given product type.
Sales Mix Variance - The difference between actual purchased quantity per customer and expected sales quantities.
Sales per Share - A ratio comparing total sales over a given period to the value of an individual share of the company.
Sales Pipeline - The steps a salesperson takes from original contact with a customer to the closing of a sale. (see The Sales and Partnerships Playbook: Your Guide to Early Growth)
Sales to Cash Flow Ratio - A ratio comparing a company’s sales of a particular product to its overall cash flow.
Soft Sell - Advertising and sales with subtle language and suggestion.
Target Market Profile - The set of attributes possessed by a target population intended to be buyers of a product.
Unqualified Prospects - A potential client who has not been previously vetted.
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