What is Selling by Objectives? (SBO)
Selling by Objectives (SBO) is a common concept in a selling organisation. Establishing sales quotas in a sales organisation is an involved process and SBO management is a strategic management technique that aims to improve the performance of the sales organisation by defining the selling objectives. SBO management is a managerial process where the management and sales persons come together to determine the common objectives and agree on the anticipated results.
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The idea behind SBO is that when the management and employees together establish specific objectives, the desired results, and the actions needed to achieve these results for the organisation in advance, it improvesthe employees’ motivation to participate and commit to their work.
Moreover, this aligns the overall objectives in the same direction. SBO management sets future targets by treating the territory as a business and managing each account.
SBO has the following key features:
- The salesforce is involved in setting the selling objectives of the organisation.
- Selling objectives are developed at both the qualitative and the qualitative levels.
- Selling objectives need to be both challenging and attainable.
- It aligns the overall objectives in the same direction.
Advantages of SBO Management
Improves Salesforce Participation and Motivation
SBO brings together the manager and salesforce to understand that establishing objectives is teamwork. It helps the salesforce to be involved in determining their roles and responsibility according to the specified goals.
Helps to Set Realistic and Measurable Goals
SBO helps to set clear and quantifiable goals. Since the salesforce is involved in the process of setting goals, they are more realistic and attainable.
Improves Communication and Coordination
SBO promotes communication and coordination between the management and salesforce because people work together towards common goals. In SBO management, feedbacks and guidance are given regularly to the salesforce.
SBO welcomes creative inputs from the salesforce in terms of how performances can be improved. It also helps to prevent confusion, and everyone is aware of their responsibilities and duties.