Sales ops glossary

ARR, churn, CAC and the other numbers used in board reporting, forecasting and comp design. Each entry gives the formula and a worked example.

• Annual recurring revenue (ARR)

  Annual Recurring Revenue (ARR) is the total annualized value of all active subscription contracts at a given point in time. It excludes one-time fees and professional services revenue. ARR is the primary top-line metric for SaaS and subscription businesses because it reflects predictable, recurring revenue.

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• Average contract value (ACV)

  Average Contract Value (ACV) is the annualized value of a customer contract, normalized to a one-year period regardless of the actual contract length. For a two-year deal worth $60,000 total, ACV is $30,000. ACV is used to compare deal sizes consistently across the portfolio and to set quotas and plan headcount in B2B sales organizations.

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• Churn rate

  Churn rate is the percentage of customers or revenue that a business loses within a defined time period. It is measured as either customer churn (accounts lost) or revenue churn (MRR lost). Churn rate is a core health indicator for any subscription business because it directly determines long-term revenue sustainability.

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• Customer acquisition cost (CAC)

  Customer Acquisition Cost (CAC) is the total sales and marketing expenditure required to acquire one new paying customer over a given period. It includes all direct costs (salaries, ad spend, tools, commissions, and overhead) divided by the number of new customers acquired. CAC is the foundational efficiency metric for evaluating how much a business spends to grow.

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• Customer lifetime value (LTV)

  Customer Lifetime Value (LTV) is the total revenue a single customer is expected to generate over their entire relationship with the business. In subscription businesses, LTV is driven by average contract value, contract length, expansion revenue, and churn rate. LTV is the primary counterpart to CAC in evaluating whether a go-to-market motion is financially sustainable.

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• Monthly recurring revenue (MRR)

  Monthly Recurring Revenue (MRR) is the normalized monthly value of all active subscription contracts at a point in time. It excludes one-time fees and non-recurring charges. Subscription businesses track it monthly to measure growth, churn, and expansion in near-real time.

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• Net revenue retention (NRR)

  Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from an existing customer cohort over a period, after accounting for expansion, contraction, and churn. An NRR above 100% means existing customers are generating more revenue than they were at the start of the period, before counting any new customers.

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• Win rate

  Win rate is the percentage of closed sales opportunities that result in a won deal. Calculated by dividing closed-won deals by total closed deals (won plus lost) in a period, win rate is one of the primary indicators of sales team effectiveness, competitive positioning, and pipeline quality in any B2B sales organization.

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Stages, coverage, velocity and forecast categories: how deals move and how the number gets called.

• Deal velocity

  Deal velocity is a composite metric for how quickly revenue moves through the pipeline. It combines active deal count, win rate, average deal size and sales cycle length into one number: revenue generated per day. Its value to a sales leader is diagnostic, because it shows which of those four variables to fix for the largest revenue gain.

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• Forecast categories

  Forecast categories are a classification system that groups sales opportunities by the rep's or manager's level of confidence that a deal will close in the current period. The four standard categories (Pipeline, Best Case, Commit, and Closed) give sales leaders a structured way to roll up individual deal confidence into a team-level revenue forecast.

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• Marketing qualified lead (MQL)

  A Marketing Qualified Lead (MQL) is a prospect that a marketing team has identified (through behavioral signals, firmographic fit, or lead scoring) as sufficiently interested and well-matched to the ideal customer profile to be worth passing to sales for follow-up. An MQL is not yet sales-ready; it is a candidate for sales qualification.

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• Opportunity stage

  An opportunity stage is a labeled step in the sales pipeline that reflects how far a deal has progressed through the buying process. Each stage has defined entry and exit criteria (specific buyer actions or milestones that must occur before the deal advances), which gives managers a consistent, comparable view of deal progress across the entire sales team.

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• Pipeline coverage ratio

  Pipeline Coverage Ratio is the total value of qualified pipeline opportunities divided by the revenue target for a given period. It tells sales leaders how much buffer they have to hit their number, with most teams targeting a 3× to 4× ratio to account for normal deal slippage and losses.

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• Pipeline hygiene

  Pipeline hygiene refers to the ongoing practice of keeping sales pipeline data accurate, current, and free of deals that are stale, misclassified, or should be removed. A clean pipeline contains only opportunities with realistic close dates, up-to-date stage information, and recent activity, so forecasts reflect what is likely to close rather than what reps hoped would close weeks ago.

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• Sales pipeline

  A sales pipeline is a structured, stage-by-stage view of every active opportunity a sales team is working, from first contact to closed deal. It shows how many deals are in motion, where they stand, and how much revenue is expected to close, giving managers a current picture of sales health and the likely forecast.

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• Sales qualified lead (SQL)

  A Sales Qualified Lead (SQL) is a prospect that has been reviewed by a sales development representative and confirmed to meet the organization's minimum criteria for direct selling, typically confirmed budget, authority, need, and timeline. When a prospect reaches SQL status, an account executive takes ownership and an opportunity is created in the CRM.

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Quotas, OTE, accelerators, ramp and capacity: how reps are paid, ramped and deployed.

• Accelerator (commission)

  A commission accelerator is a higher commission rate that activates when a sales rep exceeds a defined quota threshold (typically 100% of quota), rewarding overperformance with a greater percentage of each incremental dollar closed. Accelerators are the primary mechanism used to differentiate top-performer earnings from average-performer earnings in sales compensation plans.

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• Commission plan

  A sales commission plan is a formal document that defines how sales representatives earn variable compensation, specifying base salary, commission rates, quota thresholds, accelerators, payment timing, and any special incentives or clawback provisions. It is the primary mechanism sales organizations use to align rep behavior with company revenue objectives.

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• On-target earnings (OTE)

  On-target earnings (OTE) is the total annual pay a salesperson earns at exactly 100% of quota: base salary plus target commission or bonus. A $200,000 OTE with a 50/50 split means $100,000 base and $100,000 variable. OTE is a target, not a guarantee; actual pay rises or falls with quota attainment.

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• Ramp period

  A sales ramp period is the time between a rep's start date and the point at which they carry a full quota. During ramp, quota targets are reduced and step up as the rep finishes onboarding, training and early deal cycles. Average sales cycle length and product complexity set how long it lasts.

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• Sales capacity planning

  Sales capacity planning is the process of calculating how many productive sales reps are needed to achieve a revenue target, accounting for quota per rep, ramp time for new hires, expected attrition, and the lag between hire date and full productivity. It connects the revenue plan to the hiring plan and is the primary input for sales headcount budget decisions.

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• Sales quota

  A sales quota is a quantitative performance target, typically a revenue number, assigned to an individual rep, team, or territory over a defined period. Quotas form the foundation of sales compensation plans by determining when and how much variable pay is earned, and they serve as the primary tool for allocating revenue responsibility across the sales organization.

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• SPIFF (sales performance incentive fund)

  A SPIFF (sales performance incentive fund) is a short-term bonus paid to salespeople on top of regular commission for a specific result in a set window, such as $500 for each deal that includes a new product closed this quarter. SPIFFs redirect rep attention quickly without rewriting the annual comp plan, and they end on a fixed date.

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• Territory planning

  Territory planning is the process of segmenting the addressable market into defined groups of accounts and assigning each group to a sales rep or team. Territories are balanced based on revenue potential, account count, geographic clustering, and rep capacity, with the goal of giving each rep a workable set of accounts that can support their quota.

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Qualification frameworks such as BANT and MEDDIC, and the cadences and playbooks reps run.

• Account-based selling (ABS)

  Account-Based Selling (ABS) is a B2B sales strategy where reps treat a defined set of high-value target accounts as markets of one, coordinating outreach, messaging, and engagement across multiple stakeholders within each account rather than prospecting individual leads. ABS is typically paired with Account-Based Marketing (ABM) for a coordinated GTM motion.

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• BANT

  BANT is a four-element sales qualification framework developed by IBM that helps reps assess whether a prospect has the Budget, Authority, Need, and Timeline to be a viable opportunity. It is best suited for transactional or mid-market deals and is less effective for complex enterprise sales involving multiple stakeholders and long procurement cycles.

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• Challenger sale

  The Challenger sales model is a B2B selling method in which reps teach buyers something new about their business, tailor that insight to each stakeholder, and take control of the conversation, including pricing. It comes from CEB research by Matthew Dixon and Brent Adamson, published in The Challenger Sale (2011), and favors insight over relationship building.

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• Dead deal criteria

  Dead deal criteria are the specific, documented signals that indicate an opportunity is no longer worth active pursuit and should be disqualified from the pipeline. Unlike gut feel, these are objective, observable conditions (such as no Economic Buyer contact, 21+ days without response, or budget explicitly removed) that trigger a formal review and disqualification decision.

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• MEDDIC / MEDDPICC

  MEDDIC is a B2B sales qualification framework that checks six things before a deal is forecast: Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion. Created at PTC in 1996, it is built for complex, multi-stakeholder enterprise deals. MEDDPICC adds Paper Process and Competition for deals with legal reviews and rival vendors.

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• Mutual action plan (MAP)

  A Mutual Action Plan (MAP) is a shared, collaborative document that outlines the specific steps, task owners, and deadlines required for both the buyer and the seller to reach a signed contract and successful go-live. It replaces informal close date estimates with a concrete, agreed-upon timeline that both sides are accountable to.

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• Sales cadence

  A sales cadence is a structured sequence of outreach touchpoints (emails, calls, LinkedIn messages, and other channels) designed to engage a prospect over a defined period. Cadences standardize when and how SDRs and AEs reach out to target contacts, so the outbound motion is repeatable and measurable instead of depending on each rep's judgment.

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• Sales playbook

  A sales playbook is a documented guide to how a sales team sells, including the ideal customer profile, messaging frameworks, talk tracks, objection handling, discovery questions, demo scripts, and qualification criteria. It writes down what top performers do so every rep can work from the same standard.

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What each category of revenue software does, what to test in a demo, and which vendors we cover in the directory.

• Conversation intelligence

  Conversation intelligence software records and transcribes sales calls, then uses AI to analyze what was said, detecting keywords, objections, competitor mentions, and talk patterns. Sales leaders use it for rep coaching, and sales ops uses the aggregate insights to refine playbooks, identify what top performers do differently, and track competitive messaging trends.

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• CPQ (configure, price, quote)

  CPQ (configure, price, quote) is sales software that guides a rep through building a valid product configuration, applies the correct list prices, discounts, and approval rules, and produces a customer-ready quote. It sits between the CRM and the billing system, so B2B teams with many products, bundles, or discount tiers can quote fast without pricing errors.

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• CRM (customer relationship management)

  A CRM (Customer Relationship Management) platform is the system of record for all customer and prospect data: contacts, accounts, opportunities, and activities. Sales ops teams use it to manage the pipeline, enforce process, run reports, and connect every other tool in the revenue stack.

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• Data enrichment

  Data enrichment is the process of appending missing or outdated information to CRM records, including firmographic data like company size and industry, contact data like verified email and phone, and technographic data about installed software. Enrichment tools automate this process at scale, keeping CRM data current without manual research by sales reps.

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• Incentive compensation management (ICM)

  Incentive Compensation Management (ICM) software automates the calculation, tracking, and communication of sales commissions and bonuses. It replaces manual spreadsheet-based comp processes with a system that runs attainment calculations accurately at scale, gives reps real-time visibility into their earnings, and produces the audit trails that finance and compliance require.

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• Revenue intelligence

  Revenue intelligence software automatically captures sales activity from email, calendar, and calls, then uses AI to score deal health, surface pipeline risks, and generate forecasts. It shows sales leaders and ops teams what is happening in the pipeline without relying on manual CRM updates from reps.

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• Sales engagement platform

  A sales engagement platform (SEP) is a workflow tool that helps sales reps execute structured, multi-channel outreach sequences across email, phone, and LinkedIn. It automates the timing and cadence of touches, tracks prospect engagement, and syncs activity back to the CRM, so reps can work more leads without dropping personalization.

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• Sales forecasting software

  Sales forecasting software generates revenue projections by combining CRM pipeline data, historical win rates, and AI/ML deal scoring with structured rep and manager submission workflows. It replaces spreadsheet forecast models with a purpose-built system that gives sales leaders and finance more accurate, auditable, and timely revenue predictions.

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