7 Step Guide to Building a Profitable Sales Territory Plan (with Examples)

Want to Improve Your Team's Sales Performance?

Table of Contents

Sales organizations are more challenged than ever with a connected world, complex offerings, and what seems like an endless world of prospects. Without a strong sales territory plan, sales teams may feel all over the place, and as a result may not be producing the best results for your customers or your organization.

If you’re looking to maximize sales productivity and the value that your sales team brings to customers, it may be time to review and enhance your sales territory plan.

Good sales territory planning provides a framework to measure sales potential, set goals, and focus your team’s sales efforts for maximum success. It provides your sales team the guidance to properly identify and understand customers and prospects, assess and measure value, and support customers in a way that leads to loyalty.


Table of Contents

What is a Sales Territory?
What is Sales Territory Planning 
Benefits of Sales Territory Planning
How to Divide Sales Territories
Factors to Consider When Planning Sales Territories
7 Steps to Writing a Successful Sales Territory Plan
Sales Territory Planning Best Practices
Essential Tools to Plan Your Sales Territories
5 Ways to Validate a Sales Territory Business Plan

What is a Sales Territory?

A sales territory is a clearly defined geographic area or customer group that is assigned to an individual sales rep or sales team. Sales territories can be further segmented based on geography, account size and history, industry, and a number of other qualifying factors.

What is a Sales Territory Plan?

A Sales Territory Plan is a tactic to ensure your sales team is targeting the right prospects and identifying what goals need to be hit in order to achieve growth and profitability.

Historically, most territories were broken down by geography, but in today’s connected world, sales territories can also be divided in many ways including:

  • Industry
  • Sales potential
  • Customer type


Sales Territory Mapping Software. Territory Mapping



With a clearly defined territory, sales teams can work strategically to address the needs of their assigned market. A strong sales territory plan allows you to:

  • Ensure your sales team’s efforts are focused on the who, what, when, where and why that offer the strongest return on investment.
  • Align salespeople to the regions, segments, and/or verticals best suited for their background and expertise.
  • Partner intelligently across company teams to drive corporate objectives

  • Optimize customer experience by aligning accounts with sales teams that understand their unique challenges and opportunities.
  • Set the stage for strong long-term customer and market relationships.


Benefits of Sales Territory Planning

If you’re doubting the value of a strong sales territory plan, consider these inarguable benefits:


More time spent selling

A strong territory plan allows organizations to maximize their sales momentum by aligning the right sales teams to the right opportunities. Studies by industry analysts consistently show a decline in sales productivity due to factors such as extensive traveling, the need to learn and understand new segments, and administrative overhead.

With a clear sales territory plan based on geography and sector, salespeople can spend less time traveling and preparing for customer engagements, and more time working directly with customers.


Strategic targeting

Segmenting opportunities by more refined criteria such as number of potential opportunities, industry, company size and role (to name a few), is a great way to take a more tactical approach to sales territory design.
When allocating by more refined criteria, sales reps can go into each meeting with confidence knowing they’re walking into a business or home to pitch someone who’s a good fit for what you’re selling.

Better customer service

By aligning your salespeople to a set of accounts that aligns to their background, expertise, and geography, they are better able to understand customer needs and build solutions that align.

With consistent territories, salespeople can build long-term relationships, leading to higher customer loyalty and repeat business.



Balanced workloads

Workload is measured in time and effort required to adequately manage all accounts in a given territory. A strong territory plan compares workloads and designs territories so that each salesperson is at full capacity and not encroaching on each other’s territories.

To maximize rep production, you need to do some due diligence when it comes to assigning balanced territories.

This is not only important for maximum performance, but also reducing rep frustration and turnover which can be extremely costly.


Best reps work the biggest accounts

Tracking performance against value metrics you set for each territory and rep gives management understanding into territory performance overall. With this insight, you can create balanced territories and ensure that you’re assigning top-performing reps to the highest-value accounts.


Smarter insights

With data based insights into territories you can understand territory-level performance, see where the strengths and weaknesses lie, and make strategic decisions about territory design and distribution.

Using territory management software helps sales managers analyze performance to know how not only viable each territory is, but also how sales reps are performing.

Sales Management Association found that organization who utilize territory planning software have a 20% increase in quota attainment than those who do not.

How to Divide Sales Territories

Here are several common methods used to divide sales territories:


By geography

Sales territories are defined based on the physical location of existing and prospective customers. This could include country-level territory assignments all the way down to targeting customers within a certain distance of a storefront location.

This is one of the easiest, and most popular ways, to divide sales territories as there can be little confusion as to who owns which accounts. If you decide to assign territories by geography, always keep an eye on the population and unique customer needs within that area to make sure the workload is evenly distributed among reps.


By account size

This method involves assigning larger complex accounts to more senior and experienced sales reps. The smaller accounts are then allocated to the less experienced salespeople. This ensures the high value accounts are being served by your best team members.


By product line

Many companies sell a large number of products across many different product lines. In this case, it might make sense to divide sales territories by product lines so that reps can specialize and gain deep product knowledge. This form of territory assignment also makes it easier to tie product sales back to individual rep performance.


By industry

This type of territory assignment might work well for companies that sell into specific industries. This makes it easier for reps to specialize in a given niche and build rapport with clients.

This method can sometimes create issues when specific industries have different sales cycles and close rates. Reps that are left selling into the slower moving, or lower value niches, may feel disadvantaged.


Factors to Consider When Planning Sales Territories

When segmenting territories among your reps, you want to make sure they’re allocated fairly. To ensure this, ask yourself the following questions:

  • Is the workload equally divided up between each member of the team?
  • Does the territory design provide equal compensation opportunities?
  • Is there a good mix of existing and new accounts per territory?
  • Does the territory route allow easy travel time management?

Once you’re able to answer the questions above, it’s time to consider:

1. Revenue Source

Current Customers. Where are your best customers and prospects located? Geographic and industry-based clusters are the most common focus because it’s easier to get new customers in an area with existing customers. Historical sales data will become your new best friend as it’s the best predictor of future success.

A sales tracking software will give you a complete history of this data.

Inbound Leads. When inbound leads convert, focus on the demographics such as geography, industry and size. Then, build a strategy to divide them as evenly as possible across your sales force.

The focus needs to be on revenue generated from inbound leads as opposed to volume of leads.

Outbound Prospecting. Sales territory design for outbound efforts begins by first laying out the territories to work, then overlaying them with prospecting territories according to how you’re allocating salespeople.

For example, you assign two sales reps to each state (two territories) and one canvasser (one prospecting territory).

2. Rank Your Team

Create a scorecard and evaluate your sales reps to identify who your top, middle, and low level performers are.

  • How much is their quota?
  • Do they consistently achieve this number?
  • How many current customers and prospects are in their funnel?
  • How many viable prospects are located within their territory?

3. Rank Your Territories

Most Profitable (Least Risky). Evaluate which of your territories are most successful and double down on what’s already working.

Most Growth. If you’re more focused on the long-term instead of the short-term, focus on territories that haven’t been worked yet. It’s likely to take longer to become profitable, but will generate greater growth over time.

Learning / New Markets. To establish yourself in a new market segment or determine if it’s viable, send a canvasser into this territory to accomplish a specific task. This will help determine exactly what’s needed to succeed in that market.

4. Track and Measure Metrics

Sales metrics are invaluable in understanding the success of every sales team within the company, and entire sales department as a whole. They help you to spot trends and determine efficiencies, and inefficiencies, within the company.

With sales enablement platforms like SPOTIO, you can easily pull results for:

  • Team performance in relation to your sales funnel
  • Data from custom statuses and fields based on KPIs
  • Graphs representing team performance, best time and day to knock, etc.
  • The number of attempts it takes to establish contacts, get leads and make sales
  • This data gives you the information you need in order to assign balanced workloads across your sales team.

7 Step Plan to Write a Successful Sales Territory Business Plan

The next logical question is, where do you start? In this section, we’ll provide an overview of each planning step, along with key questions and suggestions. Depending on your offering, industry, company size, or various other factors, you may use some or all these steps when building your territory plan.


Checklist of Common Business Goals


1. Analyze your business goals and objectives

The first step to drafting a solid sales territory plan is bringing clarity to your company’s landscape, defining organizational goals, and evaluating industry trends. This is a basic step to ground you and your team on what you’re trying to accomplish with your sales territory plan.

As you go through the subsequent process, you should continually refer back to this data to maintain a pulse on whether your plan accomplishes what you’ve set out to do.


To get the juices flowing, start by answering these key questions:

  1. What is your organization’s most current vision, mission, and north star objective?
  2. What are the key trends in your industry or market?
  3. What pain do your offerings solve for customers?
  4. What are your sales goals, in numbers?
  5. What is your conversion rate? Based on this how many prospects should you have in your funnel at any given time to ensure that you’re meeting your sales goals?
  6. Are there specific products/services that you are selling more than others? Why?


2. Analyze your prospects and customers

The next step is looking deep into your customer base. In addition to understanding their businesses, challenges, and unique traits, it’s important to identify what makes them unique and what sets them apart from each other.

Key questions to ask yourself include:

  1. Who are your most profitable and lucrative prospects and customers defined by industry, region, product, etc.?
  2. What do these customers have in common?
  3. Which of your prospects or customers offers the most profound growth opportunities for your company?
  4. What are your customers buying today and what does this tell you about their challenges and opportunities?
  5. Are their industries you serve with success? Are their industries that you’ve had less success with?
  6. When customers and prospects object, what is the biggest reason why?


3. Determine your Total Addressable Market

Your Total Addressable Market (TAM) is the entire body of prospects and customers that fit your ideal customer profile. Traditionally, organizations use data including industry, location, size, and revenue to begin mapping their TAM.

While this is still important, technology and tooling makes it easier than ever to identify prospects within your TAM that may not be so obvious.

Using traditional and modern sources, even tools like social media, look for company and industry look-a-likes that may be a suitable candidate for your offering.



Once an ideal customer profile is solidified, the next step is to figure out how large the market opportunity is that fits the description. You may use a matrix to include a range of large and small markets which present large or small opportunities.

While estimating the size of your market used to be a struggle of guesswork and complicated calculations, there are now tools available to businesses to automate the TAM discovery process.


4. Perform a SWOT Analysis

A simple way to evaluate your position in the market is to perform a SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis. Since we all have blind spots, a SWOT analysis is best performed with the help of a broader team, including other company leadership, as well as members or your sales management and sales rep teams.

  • What Strengths will you build upon?
  • Which Weaknesses do you need to mitigate?
  • Which Opportunities in your marketplace are you suited to take advantage of?
  • What Threats in your selling environment will you defend against?



In doing this analysis, you will start to see patterns that indicate areas of your business that require more or less attention for various reasons.

For example, a strength that’s also a large opportunity may need a dedicated territory. On the other hand, an area that aligns to a serious competitive threat may require special attention to protect your company’s place in the industry.

The SWOT characteristics you identify will not always be related to revenue or geography. They may be related to more obscure things like training needs of your sales team, gaps in systems and tools, or even gaps in your products themselves.

Doing this analysis will help you be aware of other ways to think about your business and territories.


5. Determine and Document Sales Territories

Based on the work you perform in the sections above, you should have an idea of how to divide your sales territories. It’s important to document these clearly, outlining details of each territory including things like:

  • Geographic Boundaries
  • Industry or Segment Boundaries (including any overlap and how that is addressed)
  • Revenue Boundaries
  • Product Boundaries
  • Anything else that may be applicable to your sales organization


6. Devise an Action Plan

Similar to the SWOT analysis, devising an action plan is a group exercise that should include various stakeholders in the company, specifically the leaders of each of your identified territories. Just as well, the action plan should be built to be nimble.

In a world where market opportunities change every day, the sales territory plan should be built to follow, ensuring that your action plan keeps up with changing opportunities and threats.

Gone are the days of an annual territory and action planning session. It’s important that change management is built into the framework to ensure your teams are not caught off guard with changes.

Within each category, you should answer the following questions:

  • What is the territory’s quota?
  • What is the territory’s quota stretch goal?
  • What is the territory’s closed business YTD?
  • What is the territory’s gap?
  • How much pipeline do I have today?
  • What is the territory’s pipeline gap?
  • What are my goals for the year?

In addition to the overall territory, you will need to spend time looking at top accounts and where they fit in your territory plan. List top accounts and explain why they are chosen (relationships, industry fit, target profile).  For each, in one sentence, be clear and focused on the outreach strategy.

Next, create an opportunity map and make sure opportunity plans are thorough. What’s the compelling event? Why now? What’s the strategy to engage with a champion and economic buyer? What’s the mutual success plan?

Finally, close out with strategies to build your sales funnel.

In addition to being responsive to external factors, action plans should be reviewed on a quarterly basis to ensure your plan isn’t going stale unintentionally.


7. Track Territory-level Performance

Once you’ve devised and implemented your territory plan, it’s important to regularly measure success in each territory and adapt as needed.

Metric reviews should happen on a regular, defined cadence such as monthly or quarterly, and should be automated using sales performance tools to avoid making this a manual, costly, and easily avoided overhead.

Measures you put in place will vary based on your unique company situation, but some important measures include:

Gross Sales

The most obvious measurement of sales success, gross sales is the sum of all sales that a territory carries out during a defined time frame. Gross sales is a useful metric because it shows the ability of sales professionals to make sales, regardless of what the profit margin is on those sales.

Gross Profit

This is the difference between the selling price for a product and the price the business paid to develop the solution. This measurement is important for businesses that want to encourage their sales forces to focus on high profit margins rather than just sales.

Total Unit Sales

The aggregated number of product units sold within a particular territory, regardless of price, profit or commission. This method of measurement is useful when a company mainly sells a single type of product.

Conversion rate

Conversion rate is the percentage of leads or appointments that result in a sale of some kind. Sales forces with a high sales turnover number are operating at a high level of performance.

Total Commissions

This is the amount of money the sales representatives for the territory in question take home as personal income. Although this measurement does not directly correlate to the competitiveness or degree of success of the business itself, it is effective to use as a means of motivating members of the sales force to achieve higher numbers.

Return Customers

A sign of true development and sustainable growth in a sales territory is the tendency of buyers in that territory to come back and buy again.

For this reason, one important measurement to make is the amount of revenue or profit coming from clients who have bought before. This amount may be expressed as a gross number or as a percentage of gross sales, gross profits or commissions.

With each review, it’s pertinent to ask your leadership whether the data being measures indicates the need for an adjustment to your territory plans. If you’re proactively monitoring and adjusting, you will maintain a plan that keeps you relevant with your customers and industry.


Sales Territory Planning Best Practices

Managing a sales territory is a skill that needs constant development. Moreover, you should adjust and adapt to changes in your area. Here are our suggestions for sales territory management best practices to implement:


Set-up Autoplays

During the strategy phase, you and your team determined how often to call, email, text or visit for each account based on their needs. This is where Autoplays comes in.

Autoplays is an automated way to send a sequence of sales activities (calls, texts, emails, and visits) so sales reps know what their next step in the outreach process will be. This takes the guesswork out of when it’s time to reach out to a prospect because once an Autoplay sequence is set, the SPOTIO app automates this engagement for you.



Prevent leads from falling through the cracks and help your team focus on what they’re there to do… close more deals.


Account for Seasonal Trends

Another essential part of managing sales territories you addressed when building strategy was to determine which accounts were the seasonal business. It’s an excellent idea to check in before the season arrives and reconnect, so you are in touch when the account is ready to buy.


Keep the Focus on the Long-term, Account-based Goals

New business is fantastic; however, it should not distract from the goals set for the targeted account-based marketing goals you set. Teaching the team to balance new business development with account management is a vital skill for any salesperson.


Set Minimum Daily Sales Activities

Did you know:

  1. You should send at least 2-3 emails (source).
  2. 95% of leads that convert happens after 6 call attempts (source).
  3. 44% of salespeople throw in the towel after  single follow-up attempt (source).
  4. 92% of salespeople only call 4 times. BUT, 60% of customers reject a reps advances 4 times before finally saying agreeing to move forward (source).

When reps can go into each day knowing what needs to be done to achieve results, they’ll be motivated to work harder.

Having a daily activity goal is beneficial to both reps and managers because it hold everyone accountable and sets the stage for success. Managers gain confidence that their team is doing everything they’re suppose to. And for reps, knowing how many calls they need to make, follow-ups it takes, or emails to send in order to get the attention of prospects is motivating.

By scheduling activities and adhering to a schedule, reps can avoid getting lost in a single activity and keep their pipeline moving.


Segment New and Existing Customers

Creating a fruitful sales territory strategy begins with what you already know. Assessing current customers will tell you the best way to segment territories.

When you set out to find new territories, start with what you know works. Look at your existing customers and ask yourself:

  • What did they buy?
  • Is there a common pain point your product solved?
  • What events lead to deals won? Vice versa, what lead to a lead becoming a loss?

When you leverage insight from wins, you can create territories with prospects that have a real chance of closing.


Explore New Ways to Divide the Leads

Many sales territory plans are set up by geography, and the leads from that area go to that sales territory rep. However, not every sales territory plan needs to be geographical; the location of the lead is not always the best way to go.

In cases where your sales reps do not have in-person meetings, you can try dividing new leads based on account type (i.e., verticals) or the referral source. Some people divide leads based on the product in which the lead is interested or by the size of the account.


Look for Cross-selling Opportunities

Analyze the products that an account buys and look for natural partner-products or services, i.e., the “Would you like fries with that?” strategy. Many times, customers might not realize that you offer the full suite of products and services and can make their lives easier by ordering from one supplier.


Essential Tools to Plan Your Sales Territories

Like any job, when you are planning sales territories, you need to have the right tools. The right tools will help you plan, build, and execute a sales territory plan. There is a multitude of options available.

Here are some essentials you need to set yourself up for success, improve productivity and close the best deals:



Customer Relationship Management (CRM) is how your company keeps track of its customer information and history. Many CRM applications also offer data analysis to help companies with customer retention and account growth. CRM compile data from several sources, including live chat, social media, and email correspondence, among others.

CRM is a significant source for successful sales territory planning.


Territory Mapping

Territory Mapping is key because it gives insight into prospects in any given area, helping management create balanced work-loads for reps. Which is why adding a territory mapper to your business is so important.

In addition to gaining data-driven insights into territories and being able to easily distribute amongst your team, Sales Territory Mapping Software can help you organize territories, visualize customers and prospects on a map and let reps know what next steps need to be taken, and measure performance.

This results in better collaboration, deeper insight into your sales process, saves time, and ensures you’re squeezing the most out of every territory.


Customer Mapping

Being able to analyze how customers interacted with reps enables managers to identify similar trends into what aspect(s) of the sales process resulted in a sale. Understanding how leads interact with your sales process is highly valuable.

Customer Mapping Software takes all the important data from your CRM and enables you to visualize your key data points in pins on a map. From here, you’re able to easily distinguish where opportunities are in the pipeline, filter by data points such as last visit and what happened during the previous interaction, and much more.

Keep your reps organized and make it easier for them to close the deal.


Route Planning

Need an easier way to plan routes, know the distance between each of your appointments, or maximize efficiency in the field? Route planning can do just that.

  • Reduction in time spent going from meeting to meeting
  • Find the best path and set appointments accordingly
  • Automatically track mileage and pull mileage reports with out any extra work

Sales Routing. Route Planner. Sales Route Planner App

Route planning is your golden ticket to time management and optimized driving routes by giving reps more time in front of customers, not the vehicle’s dashboard.


Rep Tracking

Rep Tracking is more than just ‘big brother’. Being able to see what reps are doing out in the field gives managers good intel so they can better coach, train, and allocate territories. With capabilities such as visit verification, find my team, and activity tracking, you’ll have your finger on the pulse on what’s actually taking place each day.

Rep tracking software provides GPS based clarity that creates accountability and valuable insight needed to keep your team successful.


Sales Tracking

Performance reports, data capture, pipeline metrics, visibility into activities, insights and sales territory analysis. That is what makes Sales Tracking Software so powerful. It goes without saying, this is valuable stuff.

Leveraging an application that takes real-time activity data into a single dashboard means you can track, manage, and assess your sales process with confidence.

An all-in-one field sales platform brings all of this functionality together. With a holistic view of every piece of the sales process, you can quickly identify issues and learn from successes so you know what it takes to achieve continuous growth.


5 Ways to Validate a Sales Territory Business Plan

Measuring your progress toward your goal is a crucial part of managing sales. By looking at specific parts of your process, you can determine what is working on your behalf and, perhaps more importantly, what is not.

Here are five questions you should ask to validate a sales territory business plan courtesy of Steve Andersen, President and founder of Performance Methods Incorporated (PMI).

1. Is your growth of strategic customer relationships on target?

It is critical that the customers you focus on provide new sales opportunities and growth, so ensure you pick the correct ones.

2. Are you adding to and advancing the opportunities in your pipeline?

Systems build excellent account management, and every salesperson should have a system for developing and moving accounts through their pipeline.

3. What is your close rate on targeted opportunities?

Close rates are the number of sales you get divided by the presentations you made. For example, if you close three deals for every eight presentations you make, your closing rate (or closing ratio) is 38%. The higher your close rate on targeted opportunities, then the more valid your sales territory business plan is.

4. How accurate is the sales forecast?

The ability to correctly predict the sales your territory will produce is a vital skill for managing a sales territory.

5. Do you have the right resources deployed to help your team?

Managing resources is significant in the overall strategy of a sales team. The right resources along with the right motivating activity can be the key to success in a sales territory business plan. Ensure you have both deployed appropriately.

Sales territories tell salespeople where they can do business. Proper sales territory planning by you and your team can help them take care of business. Work with your team in a collaborative way to help them target the right accounts that give them best results and you have built a foundation for success that benefits the salesperson’s, the company’s and your bottom-line.

And who doesn’t want that?


SPOTIO is the #1 field sales engagement and performance management software that will increase revenue, maximize profitability, and boost sales productivity.

Want to see a product demonstration? Click here to see how SPOTIO can take your sales game to the next level.