The Most Used CRM Terms

15 min read
Vlad Kovalskiy
August 23, 2017
Last updated: April 5, 2023
The Most Used CRM Terms

“Courteous treatment will make a customer a walking advertisement”, said James Cash Penney back in the simpler days of entrepreneurship. Today, the idea behind his quote is even more significant. As our modern clientele grows less and less patient, staying courteous becomes less of a choice.

But, showing politeness doesn’t suffice either; speed, efficiency, and availability are just as crucial. Not only do our customers expect to be delighted every step of the way, but they want to feel special as well. That’s where customer relationship management steps in, simultaneously enriching their experience and accelerating our growth.

To help you master the jargon and work more efficiently, we’ve compiled a CRM 101 list of frequent CRM terminologies and phrases used by experts and providers.

What Is CRM, Exactly?

While customer relationship management (CRM for short) refers to a set of practices and strategies a company can use for handling customer interactions and data, a CRM software system records, stores, organizes, analyzes, and streamlines this managerial process throughout the customer lifecycle.

Essentially, a CRM tool serves as a database for customer information. Beyond this, a CRM system manages workflow, automates marketing campaigns, reinforces sales, and optimizes different aspects of customer service.

On-Premise CRM

The first two terms you’ll need to get familiar with are “on-premise CRM” and “cloud CRM”. Though both have their advantages, many companies opt for the first solution for three convincing reasons.

On-premise CRM is a type of customer relationship management software that a company hosts in-house, on its own server. This allows full system customization, which cannot be said for all cloud solutions. The second trait many businesses find tempting is better control over CRM data.

Cloud CRM

Alternatively known as “on-demand CRM”, “online CRM” and “SaaS CRM”, the cloud version of this software is held and maintained on the provider’s server, and accessed via an internet browser.

The most commonly cited advantages of employing a cloud CRM are ease of use and ease of access. Since there’s no in-house software, there’s no need for in-house servers, installations, and maintenance either. The only thing a user needs to access the system is an internet connection, which makes a cloud CRM available from any place and device, and at any given moment.

CRM Entity

CRM entities are used to manage customer data within a system, and model it into different data records. If it’s easier, think about them as database tables – Lead entity would hold Lead records, for instance, while Contact entity would hold Contact records.

Each CRM system has a number of template entities, the most frequent among them being the aforementioned Lead and Contact, but also Company (sometimes titled Account), Deal (Opportunity), Quote (Proposal), Order, and so on. Most systems allow you to add custom entities as well.


In business vocabulary, a sales lead is a potential sales contact, a person, or an organization that expresses an interest in your offer. In CRM vocabulary, this term designates the same meaning.

Not all leads convert into paying customers though, which means that not all of them should be given the same CRM treatment. The system uses a number of factors to evaluate the level of their interest, thus qualifying them as “junk”, “warm”, or “hot” leads.


Otherwise called prospects, leads are an essential part of every sales process. They are difficult to acquire, still, and companies large and small are always looking for new ways of doing so.

Different strategies for seeking and recruiting prospects are appropriately called prospecting. Outbound calls and emails are the most common prospecting practices, and they can address entirely new leads or retarget and nurture those that have gone cold.


Unlike in telemarketing where the term “contact” usually means “cold lead”, in CRM systems, it doesn’t designate a potential customer at all. In fact, a CRM contact refers to a prospect that’s already been converted by purchasing your products or services.

A CRM system detects customer conversion, thus automatically upgrading a lead’s status to contact. Manual import is also allowed, though you’d surely prefer to put the process on autopilot and focus on your relationship building and customer retention.


Since contact is no longer a potential customer, but an existing one, a prospect has to pass through a number of CRM stages in order to finally reach the Contact entity. The term “deal” refers to one of these pre-purchase stages but is also associated with the post-purchase status that a buyer enjoys after becoming a part of your customer base.

In short, a deal is any sales opportunity that you identify through either Leads or Contact records. Most CRM deals come with convenient visual representations of the sales funnel so that you can follow and analyze their behavior throughout the process, and customize the stages they go through until they eventually make a purchase.


There’s so much confusion around technical sales terms like leads, prospects, and deals, and it’s important to note that they do come with semantic nuances that are sometimes negligible and other times significant. In case of “opportunity”, the situation is luckily less complicated.

In both sales and customer relationship management, “opportunity” is a synonym for “deal”. Since opportunity management means the same as deal management, the two words are interchangeable, which is why some CRMs adopt the first term, while others use the second.


If a CRM provider offers you account management software, that’s because this system is sometimes called both ways. The “account” inside of a CRM software is in some cases referred to as the “Company”, so recall this before you get all confused about what you’ve purchased.

The main aspect of the CRM account is that it can be associated with both individual and multiple contacts. This entity is especially important for businesses that perform B2B sales since it allows account managers to handle a number of individuals within the same company.


The road from a lead to a customer is a long one, and so is the path separating a product catalog from an invoice. In between stands a “quote”, which, in CRM terms, denotes a formal sales proposal with set prices that can be sent to prospects before they make their final purchasing decision.

Of course, the very point of CRM quotes is to make this path smoother. That’s why modern systems integrate with product catalogs on one side and automatically convert quotes into invoices on the other. To your prospect’s convenience, template quotes can be sent via email or printed out.


Ever since money started making the world go round, “invoice” has stopped being a technical term. CRM invoices are nothing but a digital form of the same commercial instrument issued by a seller to a buyer, though they do come with a number of handy options.

Look for a system that enables you to customize invoices with your brand logo, since modern customers expect services that are both effective and professional-looking. For the same reason, opt for a solution that supports custom fields, and allows you to choose between printing your invoices out and emailing them straight to the customer.

In case your company provides project-based services and charges for them on a monthly basis, ask for a recurring billing feature as well. It will enable you to reduce manual work by scheduling invoices beforehand and letting the autopilot do the rest.


In CRM terms, “activity” is a separate entity that is used to establish a single to-do objective similarly to project management software “task”. Most CRM systems come with a set of built-in activities like emails, phone calls, and appointments, though they can be custom-created as well.


Apart from core functionalities, the best CRM systems offer a number of features designed to streamline your business processes, whether it comes to sales, accounting, or customer service. The most beneficial among them are workflow management and automation, both intended to increase your productivity and enhance your performance.

You’ll be delighted to find that CRM workflow includes most of the basic task management capabilities; still, automation of day-to-day tasks is considered its crown jewel. With only a few clicks, it allows you to create automated responses to and set triggers for virtually any CRM event, be that a follow-up reminder, an email to customer, or ticket resolution.

Sales Funnel

A “sales funnel” is a visual representation of sales. Some CRM solutions show all deals at various stages others the customer journey that stretches from the moment a potential customer becomes a qualified lead to the point that lead converts into a paying customer.

Since sales are the alpha and omega of customer relationship management (acquisition and nurturing mean nothing without actual conversion), the funnel is the essential part of all CRM systems.

Sales Pipeline

Commonly used as synonyms, “sales funnel” and “sales pipeline” aren’t entirely the same thing. Though they both describe the flow of prospects through a sale, the pipeline can designate a current state of sales for separate lines of business.

For example, if your company sells cars, accessories and provides car services you might want to see how things are going in each sector. Thus, you will have three different sales pipelines: “car sales”, “accessories sales” and “car services”.

Being a visual representation of a sales process, a CRM sales pipeline allows you to track and stay on top of each of your business lines throughout the process. It usually comes with its own reporting system.

Marketing Automation

Whatever aspect of the business the system automates, the principles are always the same. Just like with CRM workflow, CRM marketing automation gets triggered by a number of predefined events, thus eliminating the need for manual work and reducing the risk of human error. Calls and emails are automated with ease as well, and so is the sales funnel.

360-Degree View of the Customer

Before the advent of sophisticated technology, a “360-degree view of the customer” was a purely conceptual idea that entertained the thought of getting a complete view of the customer by gathering data from every single touchpoint they make with a company’s brand.

Today, this idea is very much a reality. Thanks to advanced customer trackers, data collectors, and analytic tools, all of which the best CRM systems provide to their users, basing strategic decisions upon exhaustive customer data is no longer a pipe dream.

Business Process

Business processes within CRM software enable you to tailor and arrange the system’s “activity” entities in a way that is most suitable to your company’s unique workflow. Whether it comes to task management or email marketing automation, a business process makes a fully customizable and very helpful functionality that streamlines virtually all aspects of your day-to-day operations.

Adoption Rate

This term doesn’t refer to any specific functionality or feature within a CRM software system, but this doesn’t mean that it isn’t important for companies looking to employ such a solution. On the contrary, the “adoption rate” may be the most important factor for choosing one CRM over another.

The adoption rate designates the percentage of organizations that are actually using a CRM solution they’ve purchased, compared to the number of those for whom the software was too difficult to adopt. In simple terms, it is a guarantee for effectiveness.

Web Form

Finally, a reliable CRM solution should come with a web form builder and a set of customizable templates to make embedding into websites easier. The purpose of a CRM web form is a simple one – to collect information customers leave on the website and import the data into the system for further classification and management.

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Table of Content
What Is CRM, Exactly? On-Premise CRM Cloud CRM CRM Entity Lead Prospecting Contact Deal Opportunity Account Quote Invoice Activity Workflow Sales Funnel Sales Pipeline Marketing Automation 360-Degree View of the Customer Business Process Adoption Rate Web Form
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