What is Sales? Quick Guide & Examples (Definition of Sales)
Sales is all about persuading a prospect to buy a product or service. If you’re considering getting into the industry, you might be curious about what to expect–and what pitfalls to avoid.
In this post, we’ll cover the roles and responsibilities of sales professionals, the different types of sales (and why it matters), and some important terms you’ll need to know to succeed as a new member of a sales department.
What is Sales?
A typical sales transaction involves a seller communicating the value of their solutions to persuade a prospective buyer.
The practical definition of sales can vary depending on the industry, customers you’re selling to, and the sales approach you use. For example, some companies might include parts of the marketing process in sales while others don't.
Sales teams are often referred to as the lifeblood of businesses–and for really good reason. Sales teams are responsible for getting new customers in the (sometimes virtual) door to drive revenue and profit for their company.
Let’s look at the key elements in the sales process:
- Sales rep: Also called a seller, a sales representative is often an entry-level role in the sales industry. They represent their brand and perform outreach to find and qualify potential customers.
- Lead: A lead is a person or a business that might be interested in buying from a seller. They have often expressed an interest in a brand by signing up for a free product trial or downloading an ebook.
The goal of a sales rep is to find leads and make sure they’re qualified–meaning they are actually interested in making a purchase. They may then pass the lead on to a more senior sales representative or follow up themselves.
Sales tends to be a long process, which means staying organized is crucial. Most sales teams use a sales CRM, such as Close, to follow the history of a lead and collect and store data about that lead.
- Prospect: When a lead engages with a brand and expresses an interest in your products or services, it’s referred to as a prospect. Qualified prospects have a considerable potential to convert into paying customers.
- Opportunity: A qualified prospect that matches your ideal customer profile and is highly likely to close is a sales opportunity. They often have a pain point your company solves and have expressed an interest in your offerings.
Typically a company assigns values to a lead to get an overview of the “opportunities” in their sales pipeline.
- The close: The successful selling of a product or service by salespeople to potential customers is called closing the sale, aka a close. It’s the most desirable outcome y in sales.
A lot of new sales reps view sales as building a short-term, transactional relationship. You persuade a prospect and facilitate the sales process on behalf of your company to meet your quotas.
However, it's important to remember that people buy from people. So even the most complex sales processes with multiple stakeholders are based on relationships.
It’s also important to understand how sales changed in recent years. Whereas face-to-face meetings between customers and sales were the norm in B2B selling, buying habits have evolved.
Buyers research independently online, read content, and form an opinion about a brand before talking to a salesperson. A 2019 Gartner survey of 750 B2B buyers found that meeting with suppliers takes up just 17% of an average buyer’s time.
As an individual sales rep, you can expect to interact with buyers just 5 to 6 percent of their time in the decision process.
But, don’t get discouraged–57 percent of C-Level and VP-Level buyers prefer to connect with sellers on the phone, so you shouldn’t stop cold calling.
Ultimately, sales success means you need to understand and meet the expectations of buyers from vendors. A good starting point is the LinkedIn survey’s findings below, which shows buyers want you to be a subject matter expert and provide a valuable consultation.
To get a head start in sales, you need to build the key skills sales managers look for when hiring. Add a few sales books to your reading list and explore our free sales resources to start your journey.
Next, let’s look at the basics of a sales process, then the kinds of sales and how they fit into different businesses.
What is the Sales Process?
A set of repeatable steps a sales rep can take to move prospective customers through a sales funnel is called a sales process. In the end, you either get a new customer, or find the prospect is a bad fit for your company.
A typical sales process can consist of six to eight steps. You begin by prospecting and qualifying leads, researching and understanding them, then connecting with them to pitch your products and address their objections—all the way to closing the sale and delivering your offerings.
Example of the steps in a sales process:
- Find prospects
- Qualify leads
- Research leads
- Follow up
- Addressing objections
- Close the deal
Once your customer gets the initial deliverables, make sure you follow up to check how they are doing. Not only can it help retain existing customers, but you can also request a referral.
The Different Types of Sales
Sales teams sell differently based on their products or services, target audience, marketing channels, and overall sales approach. Here are the common sales categories you may encounter in today’s sales landscape.
Usually involving lower ticket value selling, Business to Consumer sales is when a company sells directly to its end consumers. It involves a simple buying process, and consumers can often buy via self-serve models. For example, Netflix subscriptions are sold in a B2C sales model.
From a sales perspective, B2C sales generally has a shorter buying cycle and, in some cases, relies less on sales representatives and more on advertising on platforms like social media.
Business to business sales is one company selling its products or services to another business. It involves a longer buying cycle than B2C, and the ticket value of the offerings is also higher. IBM is a great B2B sales example, as it sells a range of products and services to other businesses.
B2B sales tends to have a much longer sales cycle, requires more research, and leverages platforms like LinkedIn to research and reach out to prospects.
A software company selling its software as a service (SaaS) via a subscription to another company is SaaS sales. A great SaaS sales example is Close, our CRM that helps sales teams — and specifically sales representatives — get more work done.
Typically SaaS businesses offer a free trial or demo of their products to test their features. SaaS sales jobs are well-paying and often come with unique perks such as remote work.
A subset of B2B sales is Enterprise sales, which specifically targets large companies. The sales cycle in this type of sales can run for years, involve large contracts and complicated implementations, and multiple decision-makers.
Enterprise sales is complex in nature, making it a high-risk and high-reward job. As a sales rep, you may deal with a Fortune 500 company and offer prospects customized solutions (with onboarding and hands-on support.)
For example, we offer a dedicated account manager and some additional functionalities for 6+ users on our Business Plan.
Here’s a quick breakdown of the differences between SMB(small medium business) vs. enterprise sales:
If a company sells its products or goods via an online store, then it’s an E-commerce sales model. Generally, customers discover products through social media platforms or email. They conduct online research to evaluate the options and make the purchase online, often without even interacting with a salesperson.
Amazon is the biggest example of E-commerce sales today.
A remote selling process where sales reps identify, nurture, and close deals virtually is called inside sales. The shift towards digital technology accelerated aggressively during the pandemic. Today, even high-value buyers are comfortable with collaborating virtually.
Your tool stack for performing an inside sales role could include the following:
- CRM with integrated calling features
- an email marketing platform
- social selling tools to build relationships on social media
- lead enrichment software to learn about your prospects
- productivity apps such as RescueTime or Focus to block distractions
At Close, we’ve been leading the inside sales movement since 2013. Our sales team has access to unique perks, such as a 4-day work week at 80% of pay.
Also referred to as field sales, outside sales is a form of traditional sales primarily done outside the office via face-to-face meetings. You might need to travel to industry conferences and tradeshows or spend time in the offices of your potential clients to close sales.
In this type of role, you’ll deal with a few high-value prospects, often forming deeper relationships in your allocated sales territories.
The main difference between outside vs. inside sales is you spend more time traveling, rather than just selling in the former type.
If you like the idea of traveling and networking, you might want to consider outside sales. Remember, external factors (such as the pandemic) may still force you to experiment with lead generation tactics and sales activities that don’t involve in-person interactions.
Additionally, heavy travel can make home life difficult, particularly if you have a family. This, of course, can vary from organization to organization, but it is a drawback to be aware of.
Business Development Sales
Business development is the set of activities that generate qualified new leads. You typically don’t close the deal as a business development representative (BDR) but are responsible for filling the sales pipeline with targeted potential customers.
The role calls for finding opportunities for business growth and building relationships before you pass off qualified leads to your sales team. A company should ideally have a clear separation between business development and sales, however some businesses call this position sales development representatives, or SDRs.
Account-based marketing is an enterprise sales strategy that treats every company as a “market of one.” This approach relies on a multi-touch, multi-channel strategy and can include custom content developed specifically for a target account. You’ll target multiple stakeholders at a prospective company and rally your entire team to target them.
An account-based sales team requires members from marketing, customer support, and sometimes even a product manager, working together.
When an agency sells its service packages on a monthly retainer or a project basis, this is referred to as agency sales. It’s primarily used by service-based businesses such as digital marketing agencies that offer SEO, PPC, website design, etc.
A medium-sized agency may get only a few leads every week via its marketing channels, so the sales process often includes providing value to qualified prospects through free content and tools. For example, On The Map Marketing offers a free marketing audit to prospective clients.
Consultative sales is a selling model where you focus on deeply understanding your customer needs and building trust with prospects. It requires sales reps to be an industry expert and provide real value rather than focusing on the features and benefits.
A company selling its products or services directly to the end user is called direct sales. This often calls for a company to hire an inside sales team to close deals for them or engage an external sales consultant on a commission basis. This selling model offers a lot of control to companies on how their products are sold.
For example, a SaaS company typically sells its software directly on its website or through a sales team.
B2B sales, insurance sales, and real estate sales are all forms of direct sales. In the context of retail brands, direct to consumer (D2C) is also a direct sales model. It involves a customer directly buying products from a retailer instead of third-party distributors or stores.
Sales Terms You Need to Know
Whether you’re a sales manager or considering joining a company as a sales rep, there are several key terms you should know for everyday sales conversations. These will help you better understand the sales process and navigate the interview process.
- Customer - A customer is a person who bought your company’s product or services. Often, the word “client” is used interchangeably with “customer.” Successful companies thoroughly understand and profile their ideal customers.
- CRM - Customer relationship management (CRM) is the process of analyzing your interactions with current and potential customers. Typically companies use CRM software such as Close CRM to manage their relationships with new leads, streamline workflows, and improve profitability.
- KPIs - Key performance indicators (KPIs) are metrics used to measure the performance of individual sales representatives or teams. There are many sales metrics, but you need to identify a few KPIs to track progress based on your business objectives.
- Pain Points - The problems your prospects face that lead them to search for solutions are called pain points. In basic terms, a customer generally faces pain points related to four aspects: finances, productivity, processes, and support.
- Quota - Sales quotas are sales goals capped by a certain timeframe, such as a quarter. A company’s leadership may plan an overall financial goal, and it may be broken down into sales territories, specific teams, and down to an individual rep.
Quotas can be set on any specific sales metric, such as the number of cold calls.
Meeting your quota as a sales rep generally comes with extra commissions on top of your usual ones.
- Sales Cycle - The different steps a sales team takes to convert prospects into customers is referred to as a sales cycle. Below are some typical sales cycle stages:
- Sales Pipeline - A visual representation of all of your prospects and leads in your sales process is called a sales pipeline. It may also show you the probability that a lead will close and the amount of revenue to expect. Here’s what a pipeline looks like in Close:
- Sales management: Is the process for defining your sales goals and breaking them into the quotas for various sales roles in your company. You’ll need a sound sales strategy with documented steps that show how to close deals and set milestones to measure progress along the way through KPIs.
- Sales Strategy - The overarching framework consisting of a combination of tactics that sales representatives use to close deals is referred to as a sales strategy. It includes:
- details of who you plan to sell to (your buyer personas)
- your unique value proposition (or sales pitch)
- a clearly laid down sales plan to identify qualified leads
- measurable sales goals for your team
Ready to Learn More About Sales?
Whether you’re an aspiring sales rep or just learning about the industry, understanding the basics of the sales industry is just the start. Continue your sales journey and learn about the process from the Close blog where we share hundreds of educational resources to help you understand the nuances of the sales industry.
If you’re in sales and looking to increase productivity, consider Close, a powerful sales CRM that helps automate tedious tasks with built-in calling, texting, and email in a single dashboard.
For sales leaders, we offer powerful reporting features to track sales team performance, sales leaderboards to motivate them and call coaching features to train your new hires.
Signup for a 14-day free trial to test drive all our features.