These are the most important CRM terms for managing deals and building forecasts, with a simple example for each.
Pipeline
A pipeline is a series of steps that a deal moves through - from initial contact to closing. Most businesses have separate pipelines for new sales and renewals.
Example: You might have one pipeline for New Business and another for Renewals.
Stage
Each pipeline is divided into stages that represent how close a deal is to being won. Common stages include: Initial Contact, Qualified, Proposal Sent, Verbal Agreement, and Closed Won.
Example: A deal in the “Proposal Sent” stage is likely closer to closing than one in “Initial Contact”.
Total contract value (TCV)
TCV is the full value of a deal across the entire contract term - not just the first month or year.
Example: A 12-month contract at $1,000 per month has a TCV of $12,000.
Contract start and end dates
These dates define when the customer begins and finishes their contract. They are essential for forecasting and renewals.
Example: A deal marked Closed Won today might have a contract start date of next month.
ARR (annual recurring revenue)
ARR represents the recurring revenue generated from a deal on a yearly basis. It’s useful for SaaS or subscription-based businesses.
Example: A monthly subscription of $500 would have an ARR of $6,000.