The Position Of Key Sales Objectives In An Incentives Scheme

Anyone who manages a sales team knows that sales activity must mirror the overall strategy of the company. The point of sales activity is to help the company reach its goals – and the clearer those goals, the easier it is to build a strategy that works.

Key Sales Objectives (KSO) are related to the overall goal of the company, but they are shorter and often more challenging in nature. If you use them correctly, KSO can guide your team in the correct direction.

What Is A Key Sales Objective?

A KSO is a goal that is separate from the sales team’s main long-term targets. They are current key management objectives that are short-term, and there is not usually a target attached to them.

KSO are fully quantifiable so management can assess sales people’s performance against the current KSO.

How Is A KSO Different From A Main Target?

As we have seen, KSO are different in that they are shorter term than main targets. However, just like bigger targets, KSO can be:

  • Quantitative – bringing specific revenues or numbers of clients
  • Qualitative – winning a new contact in a specific industry

KSO can also go beyond the traditional targets of revenue generation or winning a specific number of new clients. For example, a KSO might be to win a certain number of new clients, but in a specific industry. Or it might be to gain a specific number of subscribers for a certain product.

How Should Management Use KSO?

Management must decide on the KSO for a specific period, and communicate this clearly to their sales team. This allows sales people to prioritize their tasks to match the current KSO.

It is possible to use more than one KSO at a time. However, management needs to show the sales team which objective is more important to reach.

How Are KSO Paid?

KSO are part of the sales incentives scheme, and management must decide how to reward sales staff who reach their objectives. 

When deciding how to pay KSO, management should ask themselves:

  • Will this be part of the total variable pool, or will it be an additional amount which can be earned on top of that?
  • Is the value of the KSO large enough to motivate sales staff, without distracting them from their core long-term objectives?
  • Is the payment scheme simple enough? It should be very clear what behavior will be rewarded, and to what value (e.g. “for each new client in the banking sector, a sales person earns $5000, regardless of deal size.)

KSO Should Not Conflict With Main Targets

It is vital that KSO do not conflict with main targets, as this will scatter sales people’s focus and ultimately hurt the company.  The best way to stop conflict is to keep KSO highly specific and measurable. For example:

  • Increase revenues for a specific part of the market or even a specific client
  • Land a certain number of clients in a specific geographical area or for a certain product
  • Cross sell a new product to a specific number of existing clients

Three Golden Rules For Effective KSO

To help you use KSO in your business, make sure each one meets these three key requirements:

  • Realistic and motivating enough that sales people will want to go after them
  • Fully quantifiable so it is easy to measure the sales team’s success
  • Fully aligned with the short and / or medium term strategy of your firm

If you use them properly, KSO can provide a valuable motivation boost to your team. Because they are quicker to achieve, they provide the satisfaction of hitting targets while your team works on longer-term goals.

Before implementing your KSO, ensure they support your firm’s larger objectives so that they help, not hinder, your aims.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.