ADSSystem

Sales and Revenue Economics glossary

In one line

95 terms from Sales and Revenue Economics, each defined in a sentence or two, with a link to the calculator that works the number out where one exists.

A10
Account Penetration

How much of an account potential spend you already hold.

Account Profitability

What is left after the cost of serving that account. Some large accounts lose money.

Account Value

What an account is worth in total.

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Activity Rate

Calls, emails and meetings per rep. An input metric, and a poor one to manage by alone.

Attainment Rate

The share of reps hitting target. If it is below half, the quota is wrong, not the team.

Average Deal Cycle

Mean time from open to closed.

Average Deal Size

The same measure in sales language.

Average Discount

Mean reduction off list price. Every point comes straight out of margin.

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Average Revenue Per Deal

Revenue divided by closed deals.

Average Sales Price

Mean deal value. Watch the median alongside it.

B1
Booking Leakage

Contracts signed but never billed correctly.

C14
Channel Economics

Profitability of a route to market, direct or otherwise.

Churn Leakage

Revenue lost through cancellations that were preventable.

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Close Probability

Another name for the same estimate.

Commission Expense

Total commission paid. A variable cost, and it belongs in contribution margin.

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Commission Rate

The share of revenue paid to the rep.

Committed Revenue

Revenue the team is confident will land this period.

Compound Growth Rate

Growth expressed as the constant rate that would produce the observed change across several periods. Annualising means raising the period rate to a power, never multiplying it.

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Connect Rate

The share of calls answered.

Contact Rate

The share of attempts that reached a human.

Contracted Revenue

Revenue under signed agreement, earned or not.

Cost of Sales

Everything spent to close business, excluding making the product.

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Cost-Plus Pricing

Setting a price by adding a fixed percentage to unit cost. Simple and defensible, but it prices from your costs rather than from what the buyer will pay.

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Coverage Ratio

Pipeline against target, in general use.

Cross-Sell Business

Revenue from selling adjacent products to existing customers.

Cross-Sell Potential

Estimated value of adjacent products you could sell them.

Customer Profitability

The same at customer level.

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D6
Deal Mix

The balance between new, expansion and renewal business.

Deal Size Distribution

The spread of deal values. Averages hide a business built on three large accounts.

Deal Velocity

How fast deals move through the pipeline.

Demo Rate

The share that reached a product demonstration.

Discount Leakage

Margin lost to discounts nobody approved.

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Doubling Time

How many periods a given growth rate needs to double revenue. Dividing 72 by the growth percentage gives a close approximation and turns an abstract rate into a date.

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Downsell Business

Revenue kept by offering something cheaper instead of losing them.

E2
Existing Business

Revenue from customers you already had.

Expansion Business

Growth inside existing accounts.

F3
Forecast Accuracy

How close the forecast came to reality. Track it, or forecasting is theatre.

Forecast Bias

Whether the team consistently over or under-calls. More useful than accuracy on its own.

Forecast Variance

How far individual forecasts scatter from the outcome.

G1
Gross-to-Net

The gap between list price and what you actually collected.

L2
Lead-to-Opportunity Rate

The share of leads that become real deals.

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Loss Rate

The share of deals lost to a competitor.

M1
Meeting Rate

The share of conversations that produced a booked meeting.

N2
New Business

Revenue from customers you did not have.

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No-Decision Rate

The share that died without anyone choosing. Usually larger than losses, and usually ignored.

O3
Opportunity Conversion Rate

The share of opportunities that close.

Opportunity Probability

The odds a qualified opportunity converts.

Opportunity-to-Customer Rate

The share of deals that end in a signature.

P8
Partner Economics

What a partnership earns after revenue share and support cost.

Pipeline Coverage

How much pipeline you hold against the target you need to hit.

Pipeline Coverage Ratio

That relationship as a number. Three to one is the usual rule of thumb, and it depends entirely on win rate.

Pipeline Forecast

Projected revenue based on what is currently open.

Pipeline Value

The total worth of what is open, before any weighting.

Price Concession

A discount given to close a deal.

Probability Weighted Pipeline

The same, spelled out.

Proposal Rate

The share that reached a written offer.

Q6
Quota

The revenue target assigned to a rep or team.

Quota Attainment

How much of that target was hit.

Quota Capacity

Total quota across the team. Your theoretical revenue ceiling.

Quota Cost

What it costs to carry one unit of quota.

Quota Coverage

Whether you have enough reps carrying enough quota to reach the plan.

Quota Productivity

Revenue delivered against quota carried.

R9
Reactivation Business

Revenue from customers who had left.

Recognized Revenue

Revenue you are allowed to count as earned.

Renewal Business

Contracts continuing rather than starting.

Renewal Leakage

Renewals lost through process failure rather than dissatisfaction.

Rep Economics

Whether an individual rep generates more than they cost.

Rep Productivity

What one salesperson delivers against their cost.

Revenue Forecast

What finance expects to book.

Revenue Leakage

Money that should have arrived and did not, through discounts, errors or unbilled usage.

Revenue Productivity

Revenue per unit of sales cost.

S12
S&M Efficiency

New revenue produced per unit of sales and marketing spend.

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Sales and Marketing Expense

Total go-to-market cost. The denominator in most efficiency ratios.

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Sales Capacity

How much the team can realistically sell with its current headcount.

Sales Compensation

The full package of salary, commission and bonus.

Sales Cycle

The whole process from first contact to close.

Sales Cycle Length

How long that takes. Longer cycles mean acquisition cost sits unrecovered for longer.

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Sales Discount

Any reduction from the standard price.

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Sales Forecast

What sales expects to close.

Sales Growth Rate

The change in revenue between two periods as a percentage of the earlier one. Comparable only when the periods are the same length and the same season.

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Sales Pipeline

Every open opportunity, arranged by stage.

Sales Productivity

Revenue produced per rep.

Stage Conversion Rate

The share of deals moving from one stage to the next. Where the pipeline leaks.

Stage Weight

The probability assigned to each pipeline stage.

T5
Territory Economics

Whether a geography or segment covers the cost of covering it.

Time to Close

Days from opportunity created to won.

Time to Lead

How fast an inbound enquiry becomes a worked lead. Measured in minutes, not days, if you care about it.

Time to Opportunity

Days from lead to qualified deal.

Time to Revenue

How long from first touch to money in the bank.

U2
Upsell Business

Revenue from moving customers up a tier.

Upsell Potential

Estimated value of moving them to a higher tier.

W3
Weighted Pipeline

Pipeline value multiplied by stage probability.

Whitespace

The unsold opportunity inside accounts you already have. Usually cheaper than new logos.

Wholesale Price

The price charged to a retailer who will resell the product. It has to leave margin for both parties, which is why the retail price is usually set first and worked backwards.

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Win Probability

The chance a specific deal closes.