This glossary defines the 15 terms that matter most when a contractor picks a CRM, builds a pipeline, or checks whether ad spend brings in real revenue. Each definition uses plain language and gives context for home service businesses.
CRM (Customer Relationship Management)
A CRM is software that tracks every contact between a business and its leads, prospects, and customers in one system. For contractors, a CRM replaces spreadsheets and sticky notes. It keeps contact records, chat history, deal values, and follow-up tasks in one place. 65% of businesses adopt a CRM within their first five years, according to Capterra's CRM user research. But 43% of those users say they use less than half the features they pay for.
Lead scoring
Lead scoring is a way to rank leads by how likely they are to become paying customers. For contractors, this usually means looking at job type, urgency, location, and budget signals. A roofing lead asking for emergency storm repair scores higher than a lead still planning a future remodel. Urgent jobs tend to close faster.
Pipeline
A pipeline is a visual view of every active deal in your business, sorted by stage. A typical contractor pipeline has five to seven stages: New Lead, Contacted, Site Visit Scheduled, Proposal Sent, Negotiation, Won, and Lost. Each deal has a dollar value. That lets the business forecast monthly revenue and spot bottlenecks. If 40 deals are stuck at Proposal Sent and only 3 are at Won, the problem is closing, not lead generation.
Pipeline stage
A pipeline stage is the step a deal is at in the sales process. Examples are New, Qualified, Proposal Sent, Won, or Paid. Good stages make the next step clear for whoever owns the deal. Stages should match how the business really sells, not what a generic CRM template suggests.
Lead qualification
Lead qualification is how you confirm whether a lead is real, a good fit, and ready for the next step. It usually checks four things: service match, location match, urgency level, and budget signals. AI-powered qualification can do this on its own. It asks set intake questions over WhatsApp or web chat. Then it sends qualified leads to the pipeline and filters out spam or out-of-area requests.
Lead attribution
Lead attribution connects a closed deal back to the marketing source that created it. Without attribution, a contractor spending $3,000 per month on Google Ads cannot tell which campaigns, keywords, or landing pages produced the $45,000 in closed revenue. Attribution needs three parts:
- Click tracking (GCLID, UTM parameters)
- Identity stitching (linking anonymous visits to named contacts)
- Pipeline linkage (keeping the source on the deal through close)
GCLID (Google Click Identifier)
GCLID is a unique tracking code that Google Ads adds to every ad click URL. Google's auto-tagging documentation explains how it works. When you save it with the lead record, GCLID enables closed-loop attribution. The business can trace a signed $8,500 roofing job back to the exact keyword and ad campaign behind the first click.
Conversion rate
Conversion rate is the percentage of leads that move from one stage to the next in the pipeline. Common conversion metrics for contractors include:
- Lead-to-estimate rate (target: 50-60%)
- Estimate-to-close rate (target: 35-55%)
- Overall lead-to-customer rate
Tracking conversion at each stage shows where the process breaks down.
WhatsApp Business API
The WhatsApp Business API lets businesses send and receive WhatsApp messages at scale. It adds CRM links, automated replies, and chat tracking. For contractors, the API brings the same order to WhatsApp lead intake that web forms have. Inbound service chats are free. So the main way contractors use it costs close to nothing in messaging fees.
AI chatbot
An AI chatbot is an automated chat agent that asks set intake questions with no human needed. For contractors, AI chatbots collect service type, urgency, location, and budget signals from new leads. They work over WhatsApp, web chat, or SMS. The chatbot sends qualified leads to the pipeline. It gives unqualified leads a polite decline. That saves 8-12 minutes per lead on average.
Unified inbox
A unified inbox keeps website chat, WhatsApp messages, SMS, and related chats together in one view. The business does not have to chase context across different tools. Without one, a WhatsApp lead might sit on one tech's phone. A web form lead goes to a shared email. And the team has no way to see both.
Follow-up automation
Follow-up automation is a rules-based system. It sends reminders, messages, or alerts based on what happens in the pipeline. Examples:
- An auto-acknowledgment within 60 seconds of a new lead
- A reminder if a proposal has no response after 48 hours
- An alert if no team member has replied to a lead within 15 minutes Contractors who use structured follow-up sequences close 15-25% more proposals than those who rely on memory.
Cost per lead (CPL)
Cost per lead is the total marketing spend on a channel divided by the number of leads that channel generated. For contractors, Google Local Services Ads usually produce a CPL between $25 and $75, based on the trade and market. CPL alone is misleading without close rate data. A $75 lead that closes at 50% costs $150 per customer. A $25 lead that closes at 10% costs $250 per customer.
ROAS (Return on Ad Spend)
ROAS measures the revenue you get for every dollar spent on ads. A ROAS of 5:1 means $5 in closed revenue for every $1 in ad spend. Contractors who track ROAS per channel can see which campaigns to scale and which to cut. You need CRM attribution that links ad clicks to closed deals. Without it, you cannot work out ROAS with any accuracy.
Customer lifetime value (CLV)
Customer lifetime value is the total revenue a business can expect from a single customer over the entire relationship. For home service businesses, CLV goes far past the first job. Take an HVAC company with an average first job of $1,200. It has a 40% maintenance contract renewal rate over 6 years. It can expect a CLV of $4,800 or more. So keeping customer records in the CRM is worth far more than deleting them to save on per-contact pricing.
"I wish someone had handed me a glossary like this when I first started looking at CRMs. Half the sales pitches went over my head because I didn't know what 'attribution' or 'pipeline stage' actually meant in my business." — Landscaping company owner, Charlotte
For the benchmarks and stats used in these definitions, see the home service business statistics page. To build a lead management system with these ideas, see the contractor lead management guide.