9 SaaS Sales Terms You Need to Know

The global SaaS market went from being worth just under $50 billion in 2016 to over $145 billion in 2022. With this growth comes a huge opportunity for hungry tech entrepreneurs and sales professionals. If you’re new to the industry, there are several SaaS sales terms you’ll need to know to get started on the right foot.

Here are nine to add to your vocabulary.

1. Customer Journey

Seldom do leads land on your website and whip out their payment card and buy right away. Usually, there are several touchpoints along the way where a prospect first learns about your product, interacts with content and sales materials, reviews the pros and cons, speaks with a SaaS sales rep, and so on before finally making the decision to buy.

And it doesn’t end there. Even after buying, there’s the post-purchase stage where a customer decides if they want to continue using your product and recommend it to others.

This is collectively known as the customer journey, which breaks down like this.

Having a clear idea of how the customer journey unfolds is a necessary precursor to equipping your sales team for success.

2. Freemium

An increasingly popular way to get your foot in the door with leads and motivate them to use your product is by offering a “freemium” version, which includes “basic or limited features to users at no cost and then charges a premium for supplemental or advanced features.”

While it’s not the right business model for everyone, it can be a smart move for many businesses. And training SaaS sales reps to push it can be instrumental in fueling growth.

3. Marketing Qualified Lead (MQL)

An MQL is a lead toward the top of the sales funnel who has expressed some level of interest in your product but not enough to be passed off to your sales team.

This type of lead may show promise but doesn’t have the same amount of intent as an SQL, which I’ll discuss next. Therefore, an MQL is a lead that still requires nurturing from your marketing team and isn’t one your sales team should focus on yet.

4. Sales Qualified Lead (SQL)

An SQL is someone who has moved down the sales funnel to either the decision or action stage.

They have expressed a strong intent to buy and have a high lead score. Therefore, an SQL is a high-priority lead that your sales team would want to swiftly reach out to over an MQL.

5. Product Qualified Lead (PQL)

A PQL is a lead that has used your product, typically via a free trial or freemium version. They have experienced it in action firsthand and understand the value it offers.

Because of this level of engagement, PQLs have a much higher chance of converting than a lead higher in the sales funnel like an MQL. As a result, you’ll want your SaaS sales team to place a high priority on PQLs and perform systematic outreach to increase the odds of converting.

6. Lead Velocity Rate (LVR)

LVR is the growth percentage of qualified leads you generate month-to-month. While it doesn’t necessarily tell the whole story and can be a “vanity metric” if misused, I believe LVR is definitely something you want to be aware of, as it gives you a baseline reading of the trajectory your sales team is on.

For example, a steady increase in the number of qualified leads month-to-month usually indicates you’re on the right track and positioned for growth. Of course, it doesn’t mean much if your sales team isn’t converting leads, but more often than not, a positive LVR shows you’re in a good place.

As for the formula for calculating LVR, it is as follows.

7. Customer Lifecycle

This overlaps somewhat with the customer journey but focuses more on the post-conversion part of the process. Simply put, it’s the series of steps involved in a lead’s decision-making and extends beyond the purchase to product activation, renewal, and referral.

HubSpot illustrates the SaaS customer lifecycle perfectly with this graphic.

A big part of creating a successful SaaS company is fine-tuning your customer lifecycle so you’re able to fluidly move customers through the process while minimizing friction. To learn the fundamentals of the customer journey, I suggest reading this post from HubSpot.

8. Cohorts

Cohorts are a group of customers that share something in common, such as specific traits or behavior. A simple example would be a group of customers that purchase your product at the same time and go through the same onboarding process.

Performing cohorts analysis is important because it helps you understand what contributes to success so you can replicate it while also eliminating inefficiencies. If, for example, after experimenting with a new sales technique there was a surge in the number of customers signing up, this is likely a strategy you would want to repeat.

9. Value Gap

This is the difference between what a customer expects and what they actually get. A large value gap is problematic because it usually leads to customer dissatisfaction, which can reduce loyalty and increase churn.

Lowering the value gap requires a two-pronged approach, involving sales and the post-sale process of onboarding and customer service. The latter I won’t get into, but from the sales side of things, this means setting the right expectations from the start and ensuring your sales team provides customers with a realistic overview of product features and capabilities, as well as limitations.

Adding Key SaaS Sales Terms to Your Vocabulary

There’s been an explosion in the SaaS industry as of late. With market growth and revenue continuing to increase, there’s plenty of opportunity.

A critical starting point for breaking into the SaaS industry is having a command of essential SaaS sales terms. While the full “dictionary” is an extensive one, the terms listed above should help you get a basic grasp and ensure you focus on the right areas.

Looking to build an elite SaaS sales team using cutting-edge, science-based technology? See how HireDNA can help you find the right talent with 4x greater accuracy than traditional resumes and phone screening.

SaaS Sales Hiring for Beginners: How to Build a Winning Team From the Ground Up

Besides having an amazing product, SaaS sales hiring is arguably the most critical part of building a successful business. It’s also one of the most daunting, with Bersin Research, reporting that 75% of companies struggle with SaaS sales hiring.

Even for established companies with deep pockets and a dedicated recruiting team, it can be tricky. But if you’re a new startup just getting your bearings, it can be truly intimidating.

For this post, I’m going to lay down a simple template you can follow to build a winning SaaS sales team from the ground up so you’ll know which specific areas to address and assemble a team of true rockstars. Let’s get right into it.

Figure Out What Type of Culture You Want

It may sound a little cliche, but I believe that building a great SaaS sales team starts with first setting a firm foundation. And perhaps the most integral part of establishing a foundation is deciding what you want your culture to be like.


Because your culture will set the tone on how you approach sales hiring, what type of salespeople you want, what skills and characteristics you want them to have, and so on. Without a clearly defined culture, you’re almost guaranteed to lack direction, which will throw off every subsequent step in the formula.

So I recommend taking the time to crystallize exactly what type of culture you want. It will likely evolve over time, but having a clear initial snapshot should help you get started out on the right foot. For guidance on this, check out this Forbes article.

Create an Ideal Candidate Profile

Once you have a grasp on the company culture you’re going for, you’ll want to use that to create an ideal candidate profile. This can include industry experience, hard skills, soft skills, talent needs, working style, and so on. The more specific you get, the more likely you’ll be to find winning candidates that will thrive in your sales environment.

A tool you can use to streamline this process is HireDNA, which will help you build an ideal candidate from scratch.

With it, you can pinpoint exactly what you’re looking for in a SaaS salesperson, leaving no stone unturned, which brings us to our next step.

Use Data-Driven Sourcing, Assessments, and Screening

SaaS recruiting has advanced dramatically in recent years. Rather than relying on “old school” tactics for sourcing, assessing, and screening candidates, you can now leverage cutting-edge technology and concrete data that simply wasn’t possible in the past.

With HireDNA, for example, you can tap into a national network of hundreds of thousands of SaaS salespeople — both active and passive candidates — to find relevant professionals based on your ideal candidate profile.

For assessment, HireDNA uses a data-driven evaluation, looking at key factors like the role, your culture, required experiences, and unique selling skills. Each candidate receives a score in each category, and those with a match score of 75% or higher qualify for the position.

And for screening, HireDNA uses a sophisticated science-based skills assessment that tests 21 core selling competencies, such as the will to sell, motivation, and responsibility.

That way, every candidate in your talent pool is thoroughly vetted, and you can narrow it down to the absolute cream of the crop. From there, it’s just a matter of interviewing the list of candidates you’ve shortlisted and choosing those that best match your culture and ideal candidate profile.

Set Your Sales Reps Up for Success

Up until this point, I’ve talked about the steps leading up to the pre-hire moment. But for the rest of the post, I’ll focus on everything post-hire, starting with equipping your salespeople with what they need to succeed.

This typically begins with robust onboarding, which is something I’ve covered extensively in this post. Some essentials of SaaS onboarding include:

  • Offering new reps an end-all-be-all orientation resource to quickly get them up to speed
  • Formally training them on the software they’ll be selling
  • Educating them on buyer personas
  • Educating them on your UVP and competitor strengths and weaknesses

Another big piece of the puzzle is providing salespeople with proper mentorship and coaching, especially during the initial stages. This should ensure they have the built-in support system needed to “get in the groove” with minimal friction. Not to mention, it’s an effective way to reduce turnover.

Also, simply making it a point to consistently check in with SaaS salespeople to see how they’re doing and if they’re comfortable can go a long way.

Objectively Assess Performance with Analytics

Finally, you’ll want to identify a list of core metrics that most essential to success and stay on top of them with analytics. You don’t need to go crazy with it and measure every single metric, per se, but you should analyze those that are critical to your bottom line like maximizing revenue, increasing efficiency, and fueling growth.

Some examples include:

  • The number of qualified prospects a rep reaches out to
  • Conversion rate
  • Length of the sales cycle
  • Gross revenue
  • Long-term sales growth

You can find a list of the best SaaS sales analytics platforms here.

Winning with Your SaaS Sales Hiring

The fact that three-quarters of companies struggle with SaaS sales hiring speaks to the inherent difficulty of the process, especially for beginners. But by following a proven template that checks all the key boxes, you’ll know how to systematically approach the process and assemble a team of professionals that will position your business for success.

To learn more about how HireDNA can help with SaaS candidate sourcing, assessments, screening, and more, schedule a demo today. Companies that use HireDNA are able to cut their hiring time in half and eliminate 96% of hiring mistakes.