Struggling with scattered territories and missed quotas? You’re not alone. Field sales teams face more complexity than ever. With so many prospects, products, and regions, it’s easy to lose focus. When territories aren’t planned well, reps waste time, miss opportunities, and struggle to hit quota. Customers may not get the attention they deserve, and growth stalls.
A strong sales territory plan helps you organize your team, match the right reps to the right accounts, and make the most of every selling hour. This guide breaks down the territory planning process into clear steps, explains what to consider, and shares best practices and tools to help you succeed.
Table of Contents
What is Sales Territory Planning?Â
Why Sales Territory Planning Matters
7 Steps to Writing a Profitable Sales Territory Plan
Sales Territory Management Best Practices
Essential Tools for Sales Territory Planning
Validating and Measuring Your Territory Plan
Common Pitfalls (and How to Avoid Them)
Frequently Asked Questions
For Further Reading
What is Sales Territory Planning?
Sales territory planning is the process of dividing your market into manageable segments and assigning those segments to your sales reps. The goal is to make sure every customer and prospect gets the right level of attention, and every rep has a fair, achievable workload.
Territories can be based on:
- Geography (states, zip codes, cities)
- Industry (healthcare, manufacturing, retail)
- Account size (enterprise, SMB)
- Customer type (new business, existing accounts)
- Sales potential (high-value, growth accounts)
The right approach depends on your business, your team, and your market.
Why Sales Territory Planning Matters
An effective sales territory plan lays the foundation for a high-performing, customer-focused sales team. Here’s why investing time in territory planning pays off for your organization:
1. More Productive Sales Teams: When reps know exactly which accounts or regions they own, they spend less time sorting out leads and more time selling.
2. Better Customer Experience: Customers get consistent attention from reps who understand their needs and challenges.
3. Balanced Workloads: A good plan prevents some reps from being overloaded while others are underutilized.
4. Smarter Growth: Planning helps you spot new opportunities, avoid missed markets, and allocate resources where they’ll have the most impact.
5. Clear Accountability: Everyone knows their responsibilities, which makes coaching and performance reviews easier.
By prioritizing territory planning, you set your team up for greater efficiency, stronger customer relationships, and more predictable growth. It’s a strategic step that benefits both your sales force and your bottom line.
7 Steps to Writing a Profitable Sales Territory Plan
A strong territory plan is built on careful analysis, clear structure, and ongoing management. Here’s a step-by-step process that integrates all the key factors for success:
1. Analyze Your Business Goals and Objectives
Start by clarifying what you want to achieve. Ask:
- What is our sales vision?
- What are the main trends in our industry?
- What problems do we solve for customers?
- What are our numeric sales goals?
- Which products or services drive the most growth?
Get input from leaders in sales, marketing, and operations to ensure alignment.
2. Study Your Customer Base and Market Segmentation
Look at your current customers and prospects:
- Who are our best customers?
- What do they have in common?
- Which segments offer the most growth?
- What are the main challenges or opportunities they face?
- Which industries do we serve best?
- What objections do we hear most often?
Use CRM and sales data to identify patterns among your best customers. Segment your market by industry, company size, customer type, and buying behavior. Group similar accounts together to focus on the segments most likely to generate revenue.
3. Determine Your Total Addressable Market (TAM) and Account Potential
Calculate the total number of potential customers who fit your ideal profile. Use:
- CRM data
- Market research
- Public databases
- LinkedIn and industry lists
Prioritize territories based on revenue potential, strategic fit, and historical performance. Not all accounts or territories are created equal—use data, not just intuition, to assess account potential. Create a simple scoring system to rank opportunities and allocate your best resources to the highest-potential segments.
4. Perform a SWOT Analysis
A SWOT analysis is a powerful tool to analyze your product or service relative to your competition and market trends. To create one, work with your team to list your:
- Strengths (e.g., strong brand, expert reps)
- Weaknesses (e.g., limited coverage in some regions)
- Opportunities (e.g., new industries, product launches)
- Threats (e.g., competitors, market changes)
This helps you decide where to focus and where you might need to improve. For example, a strength that’s also a large opportunity may need a dedicated territory, while a serious competitive threat may require special attention.
5. Design and Document Sales Territories
Define clear boundaries for each territory. Consider:
- Geography
- Industry or vertical
- Revenue or account size
- Product focus
Assign reps based on experience, relationships, skillset, and workload. Factor in travel requirements and deal complexity. Document everything in your CRM or territory management tool, and communicate assignments clearly to the team.
6. Build an Action Plan for Each Territory
For every territory, set:
- Sales quotas and stretch goals
- Pipeline targets
- Top account lists and outreach strategies
- Regular activity plans (prospecting, follow-ups, etc.)
Route inbound leads to reps who excel at quick follow-up, while assigning outbound-heavy territories to those who are strong prospectors. Use mapping tools to optimize travel and group appointments efficiently. Review and update these plans at least quarterly.
7. Track Performance and Stay Flexible
Don’t just plan for today—think about how your territories might evolve:
- Emerging markets: Are there new industries or regions you want to target?
- Product launches: Will new offerings require dedicated focus in certain areas?
- Market changes: Stay alert for shifts in customer needs, competitor moves, or economic factors.
Monitor progress regularly. Use dashboards and reports to keep everyone informed. Adjust territories, goals, or resources as needed based on performance data and market changes. Encourage reps to share insights about new opportunities they’re seeing on the ground.
Summary Table: Steps to an Effective Sales Territory Plan
| Step | Key Considerations | Actions |
|---|---|---|
| Analyze business goals | Vision, trends, sales targets | Gather input, set clear numeric goals |
| Study customer base & segmentation | Customer traits, buying behavior, best segments | Analyze CRM data, group similar accounts |
| Determine TAM & account potential | Market size, revenue potential, strategic fit | Score/prioritize opportunities using data |
| Perform SWOT analysis | Strengths, weaknesses, opportunities, threats | Involve team, document findings |
| Design & document territories | Geography, industry, workload, rep strengths | Use mapping tools, assign reps, document |
| Build action plan | Quotas, pipeline, lead source/type, travel | Set targets, route leads, optimize routes |
| Track performance & stay flexible | Metrics, market changes, growth opportunities | Review dashboards, adjust plans quarterly |
A careful approach to these factors will help you design territories that are fair, efficient, and ready to grow with your business.
Sales Territory Management Best Practices
Once your territory plan is in place, ongoing management is key. These advanced tips help you keep your plan effective and your team engaged:
- Use a call rotation schedule: Schedule regular follow-ups for each account, using your CRM or calendar to stay organized.
- Monitor seasonal and industry trends: Plan outreach before peak buying periods or industry cycles.
- Balance new business and account management: Encourage reps to nurture existing customers as well as pursue new accounts.
- Experiment with lead allocation: If geography isn’t working, try dividing by industry, product, or account type.
- Look for cross-selling opportunities: Review what customers buy and suggest logical add-ons or upgrades.
- Share knowledge: Encourage reps to share successful strategies and lessons learned.
Essential Tools for Sales Territory Planning
The right tools make planning and managing territories much easier:
- CRM: Centralizes customer data and tracks interactions.
- Spreadsheets: Useful for initial planning and quick analysis.
- Mapping Software: Helps visualize territories and optimize travel routes.
- Sales Intelligence Platforms: Provide real-time metrics and performance dashboards.
- Communication Tools: Foster collaboration and team alignment.
Validating and Measuring Your Sales Territory Plan
Measuring your progress is a crucial part of managing sales. By looking at specific parts of your process, you can determine what is working and what needs improvement.
Ask yourself and your team:
- Is your growth of strategic customer relationships on target? Are you focusing on accounts that provide new sales opportunities and growth?
- Are you advancing opportunities in your pipeline? Does every salesperson have a system for developing and moving accounts forward?
- What is your close rate on targeted opportunities? Are you closing deals at a rate that justifies your territory assignments?
- How accurate is your sales forecast? Can you reliably predict the sales your territory will produce?
- Do you have the right resources deployed? Are top talent and support focused on high-potential territories?
Track key metrics such as:
- Revenue and gross profit by territory
- Number of units sold
- Conversion rates
- Commissions earned
- Repeat business and customer retention
Hold regular reviews (at least quarterly) to assess territory performance and make adjustments as needed.
Common Pitfalls (and How to Avoid Them)
Even the most experienced sales leaders can run into challenges when designing and managing effective territories. Being aware of these common pitfalls—and knowing how to address them—can help you avoid setbacks and keep your team performing at its best.
- Unclear Boundaries: Leads to confusion and lost deals. Solution: Document and communicate territory assignments.
- Ignoring Rep Strengths: Assigning reps without considering their skills can hurt results. Solution: Match reps to the right accounts.
- Not Adapting: Markets change—review and update your plan regularly.
- Overreliance on Geography: Consider other factors like industry or account size.
- Lack of Data: Use CRM and analytics to make informed decisions, not just gut instinct.
By proactively addressing these issues, you’ll build a territory plan that’s clear, flexible, and driven by real insights—setting your team up for long-term success.
Frequently Asked Questions
How often should I review my territory plan?
At least quarterly. More often if your market changes quickly.
What’s the best way to balance workloads?
Use a mix of account count, deal size, travel time, and feedback from reps.
How do I handle new hires or turnover?
Keep territory assignments documented and up to date. Assign new reps to less complex territories at first.
Should I use software or manage territories manually?
Start with spreadsheets if you must, but move to CRM and mapping tools as your team grows.
How do I measure territory effectiveness?
Track revenue, quota attainment, customer retention, and rep satisfaction.
For Further Reading:
- Field Sales Management: How to Overcome the Biggest Obstacles
- Territory Management: Strategies for Reps & Managers
- Sales Route Planning: Guide for Field Sales Teams
- Sales KPIs Every Field Sales Leader Should Track
- Field Sales Visibility Tactics
- 10-Step Sales Action Plan to Crush Quota
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