What is Sales?
The word ‘sales’ is so familiar that it’s easy to assume you know exactly it means from a business perspective. However, there is a basic definition of sales, and a deeper, more useful definition. So what is sales really? It’s important to be sure, as if you run a business, your definition of sales will be reflected in your attitude toward customers and business activities alike.
To improve sales activities, it is wise to get to grips with the true definition of sales. This way you can understand whether your business activities are aligned with this definition and make any necessary changes. In this article we’ll take a look at the true sales definition for business. We’ll also define some of the most common terminology and strategies for improving your sales activities.
What is sales and what does it mean for your business?
In the business dictionary, the definition of sales is as follows:
1. The activity or business of selling products or services
2. An alternative term for sales revenue or sales volume.
However, sales is so much more than this simple term, which if taken at face value might lead to pushy, business-focussed strategies rather than customer-focussed ones. Sales is not about trying to convince potential customers, or developing the most persuasive tactics to get people to part with their money. When this is your business strategy, people can sense it – and it is a bit of a turn off.
Sales is really about helping your prospects to source what they genuinely need. That means listening to them actively and understanding their pain points and specific needs. The aim is to provide a timely and cost-effective solution, which naturally equates to a win-win situation.
Note that if you know you can’t offer the best solution, integrity should come into play. This earns the respect of your prospects, and who knows? They might come back when the time is right, or pass your details to others. By sending a prospect elsewhere you have still assisted in their process – so technically, that’s still sales.
What are prospects?
The official definition of a prospect is this: a person regarded as a potential customer, client, etc.
To clarify further, a prospect has had some two-way communication with your business, expressing some level of interest. In other words, they have already engaged with the business, so there is more of a possibility that they’ll be interested in buying eventually.
This is different to a lead, which refers to someone who has only had basic, one-way communication with you – perhaps by signing up to a mailing list. All you have is simple details that may or may not lead to a sale.
What is a sales pipeline?
A sales pipeline refers to the stages your prospects go through, from a new lead to becoming a customer. It will look something like this, dependent on the nature of your business, of course:
- Qualification: You ask questions that will define prospects needs, budget and likelihood of buying at some point.
- Meeting: You discuss potential solutions with prospects, with a view to finding the right one for their needs.
- Proposal: You send the prospect detailed quotes outlining what you intend to provide, how much it will cost, and any corresponding timeframe.
- Closing: The stage in which negotiations are finalized and contracts are drawn up and signed. At this point the prospect becomes a customer.
We have some advice on how to efficiently manage your sales pipeline, since this is such an important aspect of sales.
What is a sales funnel?
‘Sales pipeline’ and ‘sales funnel’ tend to confuse people, since they both refer to the way prospects turn into customers. There is a difference though: the sales funnel represents numbers. It defines the number of prospects going through each stage of the pipeline, and the rates of conversion through each of the stages.
As is the case with sales pipelines, a good CRM software will generate funnel reports so that you can easily see what is happening in your sales funnel.
What is a sales plan?
A sales plan is a working document that defines the most appropriate route to increased revenue. It outlines your current market position, sales goals and customer attributes, as well as detailing your tools, metrics, and budgets. It also defines your sales strategies and contains a reviewable action plan. This helps you to keep your teams aligned with company vision and mission, while giving them a functional guideline to operate from.