The SaaS Sales Terminology Masterlist: Essential
Terms You Need To Know

SaaS Sales Terminology


The SaaS industry itself can get very technical real quick. As a SaaS developer or business owner, you may be well-versed with the different SaaS business terms and lingo.

But how about SaaS sales terminology?

Another part of your business that can have a lot of jargon thrown around is the sales part. And if you put that together with SaaS, the sheer amount of acronyms and technical terms can be very overwhelming.

To help you out, we’ve compiled a list of common SaaS sales terminologies, categorized based on usage.

Let’s dive right in.


SaaS General Terms


Let’s start with the basics. Here are some general terms that you’ll often hear in SaaS businesses, not just in the sales department, but throughout the whole company:


Software as a Service (SaaS)


Just in case you or anyone in your company doesn’t know this yet, SaaS is an acronym for “Software as a Service.”

It’s a type of software deployment model where software is provided to customers over the internet.

Rather than the traditional way of installing software on an on-premise server or computer, SaaS solutions are hosted by the provider and can be accessed by users through a web browser.


Customer Retention


Customer retention refers to maintaining and keeping your current customers subscribed to your SaaS product.

It’s often said that it costs more to acquire a new customer than to keep an existing one, which is why customer retention is more important.




Churn refers to when a customer cancels their subscription to your SaaS product. It is the opposite of customer retention.

SaaS businesses usually measure churn in terms of the percentage of customers lost (customer churn rate) and the percentage of revenue lost due to customer churn (revenue churn rate).


Account Management


Account management is the process of maintaining and growing your relationships with your current customers. It includes tasks such as upselling, cross-selling, and customer success.

I know that’s a handful of new sales terms being dumped at once. We’ll get back to them later.




Engagement is a measure of how active or involved a customer is with your SaaS product. It’s often expressed as the number of logins, the number of features used, or time spent in the app.


Customer Success


Customer success is a term you’ll hear a lot in SaaS. It’s the department or team responsible for making sure that customers are successful in using your product and achieving their desired outcome

This includes tasks such as onboarding, training, adoption, and retention.


Business-To-Business (B2B)


B2B, or business-to-business, refers to companies that sell products or services to other businesses.

B2B SaaS products are usually those that are used by teams or departments within a company. These include project management software, customer relationship management (CRM) software, and human resources (HR) software.


Business-To-Consumer (B2C)


On the other hand, B2C, or business-to-consumer, refers to companies that sell products or services directly to consumers.

B2C SaaS products are usually those that are used by individuals, such as fitness tracking apps, photo editing apps, and language learning apps.


Pain Point


A pain point is a problem or challenge that your target customer is facing.

It’s important to identify the main pain points of your target customers so you can position your SaaS product as a solution to their problems.




Positioning refers to how you position or market your SaaS product in the minds of your target customers.

It includes elements such as your product’s features, pricing, branding, and differentiation from competitors.


Buying Signals


Buying signals are the indicators that a customer is ready to make a purchase.

Some common buying signals include when a customer asks for a price quote, requests a demo, or expresses interest in your SaaS product.




Freemium is a pricing model where you offer a basic version of your SaaS product for free, and charge for premium features.

The freemium model is often used to attract customers and get them hooked on your product before they start paying.


Free Trial


A free trial is when a customer uses your SaaS product for a limited period of time, usually with the intention of eventually becoming a paying customer.

Trials are often used to give potential customers a taste of your product before they commit to buying it.


Return On Investment (ROI)


ROI, or return on investment, is a measure of how much money a customer makes or saves as a result of using your SaaS product.

It’s usually expressed as a percentage and is calculated by dividing the benefits (in monetary terms) by the costs (in monetary terms).


SaaS Sales Terms: Roles


In any sales team, there are different roles that need to be filled in order to function properly. Here are some of the most common roles you’ll see in a SaaS sales organization:


Sales Development Representative (SDR)


Or simply “sales rep.”

The first point of contact between a potential customer and the company, SDRs are responsible for generating new leads and setting up appointments for the sales team.

They usually work closely with the marketing team to come up with strategies for lead generation, such as email campaigns, webinars, or events.


Account Executive (AE)


After a lead has been qualified by an SDR, it is then passed on to an account executive. AEs are responsible for closing deals and growing relationships with customers.

They usually have a quota or target to meet every month, quarter, or year.


Customer Success Manager (CSM)


As the name suggests, customer success managers are responsible for making sure that customers are successful in using the product. This includes tasks such as onboarding and training.

They usually work closely with the account management team to ensure that customers are getting the most out of the product and are happy with it.


SaaS Sales Terms Concerning Potential Customers


When you’re trying to turn a potential customer into an actual customer, the journey can be long and complicated.

And a sales team needs different terms to describe where the prospective customers are in the customer journey. Here are some sales terms you need to know that concern your potential customers.




A lead is a potential customer that has been identified as having a need for your product.

They may have been contacted by an SDR or they may have signed up for a free trial on your website. Either way, they are now in the sales funnel and are ready to be nurtured by the sales team.




A prospect is a lead that has been qualified by the sales team as a good fit for the SaaS product. This usually involves some basic research to make sure that they have a need for the product and that they are able to pay for it.




An opportunity is a prospect that is ready to buy your product. They usually have a budget set aside and are just waiting for the right product to come along.

The sales team will usually put together a proposal or pricing offer at this stage.


Closed Opportunity


A closed opportunity is what comes next. It can go two ways: closed-won and closed-lost opportunities.

Closed-Won: This is when the potential customer finally buys your product.

Closed-Lost: This is when the customer doesn’t buy your product. There are many reasons why this can happen, such as the customer not having the budget, not being able to see the value in the product, or going with a competitor instead.


Qualified Lead


A qualified lead is a lead that has a higher probability of becoming an actual customer.

You see, not all leads have the same likelihood of buying your SaaS product. Some leads are better than others and will be more likely to convert into customers.

There are two main types of qualified leads: marketing qualified lead (MQL) and sales qualified lead (SQL).

Marketing Qualified Lead (MQL): A marketing qualified lead is a lead that has shown an interest in your product but is not quite ready to speak to the sales team yet. 

They may have downloaded a white paper or signed up for a webinar but they’re not quite ready to make a purchase.

Sales Qualified Lead (SQL): A sales qualified lead is a lead that is ready to speak to your sales team. They usually have given their contact information so that your sales rep can reach out to them.

At this stage, they are already considering your product as a potential solution to their problem.


Bad Lead


A bad lead is a lead that will never convert into a paying customer.

There are many reasons why a lead might be bad. Maybe they’re not interested in your product, maybe they can’t afford it, or maybe they’re just not a good fit.

Whatever the reason, you should try to avoid wasting time on bad leads and focus on the ones that have a higher chance of becoming customers.


Buyer Persona


A buyer persona is a fictional character that represents your ideal customer.

When you’re creating marketing materials or trying to sell to someone, it can be helpful to think about what this person would want and how they would react. This is where buyer personas come in.

They can help you understand your customer better and create sales materials that appeal to them specifically.




The decision-maker is the person within a company who has the power to sign off on a purchase. This could be the CEO, CFO, or even just the manager of the department that will be using the product.




A champion is someone within a company who is passionate about your product and is championing it internally.

They may not have the budget or authority to make a purchase, but they can help to push it through the decision-making process.




A gatekeeper is someone who protects the decision-maker from salespeople. They are usually the assistant or PAs to the decision-maker and they control access to them.

If you can get past the gatekeeper, you’re one step closer to getting in front of the decision-maker.


Small To Medium-Sized Businesses (SMB)


Small to medium-sized businesses (SMB) are businesses making less than $50 million in annual revenue. They usually have a smaller budget and are less complex than enterprise companies.

When buying your SaaS product, SMBs usually just pick out one of your subscription tiers and don’t negotiate much on price.




Enterprise companies are businesses with more than $50 million in annual revenue. They usually have a larger budget and are more complex than SMBs.

Because of the complexity of their business processes, they usually need customized solutions that can’t be covered by preset subscription tiers.


Low-Hanging Fruit


The term “low-hanging fruit” is often used to describe opportunities that are easy to close. They usually have a short sales cycle and require little effort to convert them into customers.


SaaS Sales Terms: Techniques & Activities


The world of sales can employ a lot of various activities and techniques in order to bring about a successful close. Here are some of the most common ones that you’re likely to come across:


Always Be Closing (ABC)


“Always be closing” is a sales mantra that encourages salespeople to constantly be trying to close deals.

However, it’s a bit of an outdated technique as it can create too much pressure on prospects and turn them off.

So, salespeople today tend to focus on more relationship-building techniques, such as demand generation and lead nurturing.

Don’t worry. We’ll also talk about those activities further down in this article.


Cold Outreach


Cold outreach is when you reach out to someone who has not expressed any interest in your product. This is usually done over the phone (cold calling) but can also be done via cold email or social media.

It’s called “cold” because you’re reaching out to someone who doesn’t know you and is unlikely to be interested in what you have to say.

Cold outreach is generally considered to be a low-quality lead source and is not very effective at generating new business.

However, they can be useful for reactivating old leads that have gone cold.


Lead Generation


Lead generation is the process of generating new leads. This can be done through a variety of activities, such as content marketing, search engine optimization (SEO), and lead magnets.

Lead Enrichment


Lead enrichment is the process of adding data to your leads in order to better qualify them. This is usually done by using a lead enrichment tool that pulls data from various sources, such as social media and public records.

This can be helpful in understanding a lead’s business, budget, and authority level.


Lead Scoring


Lead scoring is the process of assigning a numerical score to each lead based on their likelihood of becoming a paying customer.

This helps salespeople prioritize their time and efforts by focusing on the hottest leads first.

It’s usually done by taking into account factors such as budget, authority, need, and timeline (BANT).




Deduplication is the process of removing duplicate leads from your database. This is important because you don’t want to waste time trying to sell your product to someone who’s already a customer.

It’s usually done by matching up email addresses, phone numbers, or other unique identifiers.




Segmentation is the process of dividing your leads into groups based on certain criteria. This is important because it allows you to customize your sales approach for each group.

There are many factors and criteria you can use in segmentation, such as the following:

Demographics: age, gender, location, etc.

Firmographics: company size, industry, revenue, etc.

Technographics: tools used, tech stack, etc.

Behavioral: website activity, email engagement, etc.

Psychographics: interests, hobbies, beliefs, etc.


Discovery Call


A discovery call is a phone call between a salesperson and a prospect, usually the first contact between them.

The purpose of the call is to learn more about the prospect’s needs and see if there is a fit between their needs and your product.




Follow-up is the process of staying in touch with a prospect after they have expressed interest in your product.

This usually involves sending them information about your product, case studies, or other helpful resources.

It’s important to stay top-of-mind with your prospects so that when they’re ready to buy, they think of you first.




A demo is a walkthrough of your product, usually given to a prospect who has shown an interest in it. The purpose of a demo is to show how your product works and how it can solve the prospect’s problem.

A good demo should be tailored to the specific needs of the prospect and should avoid using too much technical jargon.


Demand Generation


Demand generation is the process of creating awareness and interest in your product among potential customers. This usually involves activities such as content marketing, SEO, and lead nurturing.

The goal of demand generation is to generate a steady stream of high-quality leads that sales can then follow up with.


Lead Nurturing


Lead nurturing is the process of building relationships with prospects, even if they’re not ready to buy yet. This often includes sending them helpful information, such as blog articles, case studies, or white papers.

The goal of lead nurturing is to keep your company top-of-mind with prospects so that when they’re ready to buy, they think of you first.


Social Selling


Social selling is the process of using social media to build relationships and generate leads. This generally involves activities such as connecting with prospects on LinkedIn, following them on Twitter, and engaging with their content.

The goal of social selling is to build relationships with potential customers and become a trusted resource for them.




In traditional business, upselling means selling a more expensive version of a certain product to a customer who expressed intent to buy it.

For example, imagine having an electronics store and a customer wants to buy a laptop with 8 GB RAM and 512 GB storage. But then you offer a more advanced model with 16 GB RAM and 1 TB storage.

That’s upselling.

On the other hand, SaaS upselling is more about offering higher subscription plans to existing customers.

For example, a customer might be paying $50/month for your basic subscription plan that gives them access to 5 users. But then you offer them a more advanced plan for $100/month that gives them access to 10 users.




Cross-selling is when you sell complementary products to a customer who has already expressed interest in buying something from you.

For example, imagine having a clothing store and a customer buying a shirt. Then you offer them a matching tie.

In the context of digital products, cross-selling is when you sell complementary products to a customer who is already using your main product.

For example, a customer might be using your basic CRM software. But then you offer them an add-on dialer that integrates seamlessly with your CRM system.


Sales Automation


Sales automation is the use of software to automate sales activities. This includes tasks such as lead generation, follow-up, and demo schedule.

The goal of sales automation is to make the sales process more efficient and help sales reps close more deals.

Since we’re already talking about automation…


Drip Campaign


A drip campaign is a series of automated emails that are sent to leads over time. The goal of a drip campaign is to nurture leads until they’re ready to buy.

Drip campaigns usually consist of email content such as helpful resources, case studies, or product information.


Sales Enablement


Sales enablement is the process of equipping salespeople with the resources they need to be successful. This includes training, content, tools, and technologies.

The goal of sales enablement is to help sales reps close more deals and increase revenue for the company.


SaaS Sales Terms: The Sales Process


The sales process is the series of steps that a salesperson takes to close a deal. And you could encounter a lot of terms related to it. Here are some of the most common ones:


Sales Funnel


A sales funnel is a visual representation of the sales process. It shows the different stages that a lead goes through before becoming a customer.

The most common stages of a SaaS sales funnel include the following:

Top-Of-Funnel (TOFU): The potential customer becomes aware of your SaaS product. You may also encounter more specific names for different TOFU stages, such as the Awareness and Interest stages.

Middle-Of-Funnel (BOFU): The prospect wants to learn more about your product and compares it with your competitors. Specific stages in this part of the funnel include the Consideration and Evaluation stages.

Bottom-Of-Funnel (BOFU): The prospect decides to buy your SaaS product and becomes a customer. More specific stages at the later parts of the funnel include the Intent and Decision stages.

Retention stage: The existing customer continues to use your product or service.

Advocacy stage: The customer becomes a promoter of your product or service.


Customer Journey


The customer journey is the path that a potential customer takes from becoming aware of your product to becoming a paying customer.

It’s similar to a sales funnel, but it’s more holistic and includes all the touchpoints that a customer has with your brand.

Touchpoints are all the interactions that a customer has with your brand. These can be online (website, ads) or offline (store, events).

For example, a customer might first learn about your product from an ad. Then they visit your website to learn more. After that, they might receive a follow-up email from you. And finally, they might purchase your product.

The goal of mapping out the customer journey is to identify all the touchpoints that a customer has with your brand. This way, you can optimize each touchpoint to increase conversions.


Call-To-Action (CTA)


A call-to-action is a brief message that encourages the reader to take a specific action. This could be anything from subscribing to your email list to downloading a white paper.

Your CTA should be clear and concise. And it should be relevant to the stage of the customer journey that the prospect is in.

For example, if someone is at the top of the funnel, your CTA might be something like “Subscribe to our newsletter to learn more about SaaS products.”

On the other hand, if someone is at the bottom of the funnel, your CTA might be “Download our white paper on choosing the right SaaS product for your business.”


“A-ha!” Moment


The “a-ha!” moment is the point in the customer journey when the prospect experiences the value of your SaaS product.

For example, let’s say you have a SaaS product that helps businesses manage their social media marketing campaigns.

Now, imagine a potential customer that might be experiencing some setbacks in their social media marketing efforts. Then they sign up for a free trial of your SaaS product and see significant improvements.

As a result, they are more convinced that they need your SaaS solution.

That’s the “a-ha!” moment.

Once a potential customer has that “a-ha!” moment, they’re more likely to convert into a paying customer.




A conversion is when a prospect takes the desired action that you want them to take.

This could be anything from subscribing to your email list to purchasing your SaaS product.

The goal of any sales process is to increase conversions. And there are a number of ways to do this, such as optimizing your website for lead generation or using effective sales techniques.


Customer Onboarding


Customer onboarding is the process of helping a new customer get started with your product.

The goal of customer onboarding is to help the customer get value from your product as quickly as possible. This way, they’re more likely to become a paying customer.

There are many different ways to onboard customers. But some common methods include providing helpful resources (such as guides and tutorials), giving live demos, or offering free trials.


Service Level Agreement (SLA)


A service level agreement (SLA) is a contract between a service provider and a customer.

It outlines the terms of the service, such as what the customer can expect in terms of uptime, support, etc.

Having an SLA in place is important for any SaaS business. It helps to set expectations and ensure that both parties are happy with the arrangement.




Reactivation is the process of getting an inactive customer to start using your product again.

This usually involves reaching out to the customer and offering them some type of incentive, such as a discount or a temporary free upgrade.

The goal of reactivation is to get the customer engaged with your product again so that they’re more likely to become a paying customer.


SaaS Sales Terms: Metrics


There are a number of important metrics to track in any SaaS business. These metrics can give you insights into how well your business is doing and where there might be room for improvement.

Below are some of the most important SaaS sales metrics:




Bookings is a metric that measures the total amount of revenue you make through all the billable products and services you have provided to your customer.

Aside from your SaaS product itself, this also includes other fees for onboarding, premium support, special training, etc.


Lead Velocity Rate (LVR)


LVR is a measure of how fast you are generating qualified leads month to month.

To calculate it, you simply take the number of new MQLs and SLQs you’ve gained by the number of leads you had at the beginning of the month.


Monthly Recurring Revenue (MRR) & Annual Recurring Revenue (ARR)


Monthly recurring revenue (MRR) is a metric that measures the amount of money you make every month from your SaaS product.

Annual recurring revenue (ARR), is the amount of money made every year from your customers.

Both MRR and ARR are important metrics to track. They give you an idea of how much revenue you can expect to receive on a monthly or yearly basis.


Annual Contract Value (ACV)


Annual contract value (ACV) is the total amount of money a customer pays for your SaaS product over the course of a year.

This metric is important to track because it gives you an idea of how much revenue you can generate from each customer.


Customer Lifetime Value (CLV) or Lifetime Value (LTV)


Customer lifetime value (CLV) or lifetime value (LTV) is the total amount of money a customer spends on your SaaS product over the course of their lifetime

This metric is important to track because it gives you an idea of how much revenue you can generate from each customer over the long term.


Customer Acquisition Cost (CAC)


Customer acquisition cost (CAC) is the amount of money you spend to acquire a new customer.

This metric is important to track because it gives you an idea of how much it costs to acquire new customers. It is also often stacked against the CLV to form the CLV:CAC ratio, which measures how much ROI you are getting for your CAC.


Final Thoughts On SaaS Sales Terminology


As you can see, there is a lot of SaaS sales terminology to learn. However, don’t let this overwhelm you.

Start with the general terms in SaaS. Then move part by part.

What are the roles you need to be familiar with? What are the terms in the SaaS sales process? What do you call your potential customers?

Just take it little by little until you know each SaaS sales term by heart.

Need more guides to help you grow your SaaS business? Visit our blog here.

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Ken Moo