How to Plan Sales Territory Effectively for Maximum Coverage
Design sales territories that balance workload, opportunity, and geography to maximize team productivity and market coverage.
When to Use This Guide
- ✓Launching new sales teams
- ✓Reorganizing existing territories
- ✓Expanding into new markets
- ✓Balancing uneven territories
- • Complete customer database
- • Historical sales data
- • Geographic information
- • Team size decisions made
Gather and Clean Territory Data
Compile all customer and prospect data needed for territory planning.
Collect customer locations, revenue history, industry, size, and potential for each account.
Export CRM data: Company name, address, annual revenue, industry, purchases (12mo), potential score
- • Clean duplicate accounts first
- • Standardize address formats for mapping
- • Include both customers and prospects
- • Planning with incomplete or dirty data
- • Ignoring prospect data
- • Not updating historical revenue
Choose Territory Design Approach
Select geographic, vertical, account-based, or hybrid territory structure.
Geographic: by location. Vertical: by industry. Account-based: by size/strategic value. Hybrid: combination.
FMCG: Geographic territories by zip code. SaaS: Vertical territories by industry + geography
- • Geographic works for field sales with travel
- • Vertical works for specialized expertise
- • Account-based for key account programs
- • Choosing approach without considering sales motion
- • Mixing approaches inconsistently
- • Not aligning with rep skill sets
Calculate Territory Potential
Estimate revenue potential and workload for each proposed territory.
Sum existing customer revenue + estimate prospect potential + calculate required visits.
Territory A: $2M current customers + $3M prospect potential = $5M total. 150 accounts × 6 visits/year = 900 annual visits
- • Use 3x-4x multiplier for potential vs. quota
- • Calculate visit capacity per rep (800-1200/year)
- • Consider account concentration vs. spread
- • Not balancing potential across territories
- • Ignoring travel time in visit calculations
- • Overestimating prospect conversion
Draw Territory Boundaries
Define specific boundaries using maps and account assignments.
For geographic: use zip codes, counties, or natural boundaries. For vertical: assign industry codes.
Territory 1: Zip codes 10001-10099, 10200-10250 OR Industries: Healthcare, Biotech in Northeast region
- • Use natural boundaries (highways, rivers)
- • Keep territories contiguous for field sales
- • Consider traffic patterns and drive times
- • Creating territories that require excessive cross-town travel
- • Ignoring commute from rep homes
- • Boundaries that split natural market areas
Assign Accounts and Validate Balance
Assign each account to territory and verify even distribution of opportunity and workload.
Check that each territory has similar revenue potential, account count, and required visit load.
Review: Territory 1: $4.8M potential, 145 accounts. Territory 2: $5.1M potential, 152 accounts. (Balanced)
- • Aim for ±10% variance in potential across territories
- • Balance both revenue and account count
- • Consider rep experience levels
- • Highly unbalanced territories causing resentment
- • Not accounting for account size differences
- • Ignoring existing relationships in reassignments
Communicate and Implement Changes
Roll out new territories with clear communication and transition plan.
Announce changes, explain rationale, provide territory details, and manage account transitions.
Hold territory planning meeting, share maps/lists, address questions, set 30-day transition period
- • Explain 'why' behind territory decisions
- • Give reps time to learn new territories
- • Manage customer communication during transitions
- • Surprise territory announcements
- • No transition period
- • Not managing customer confusion
Formulas & Examples
territory Potential
Existing Customer Revenue + (Prospect Count × Avg Deal Size × Win Rate)visit Capacity
Available Selling Days × Visits Per Day (typically 250 days × 4-5 visits = 1000-1250/year)example Territory
{
"name": "Northeast Metro Territory",
"geography": "Zip codes: 10001-10299, 10400-10499",
"accounts": {
"customers": 95,
"prospects": 180,
"total": 275
},
"revenue": {
"existing": "$1,800,000",
"prospectPotential": "$2,700,000",
"total": "$4,500,000"
},
"workload": {
"customerVisits": "570 (6 per year)",
"prospectVisits": "360 (2 per year)",
"totalVisits": "930",
"capacity": "1,100",
"utilization": "85%"
}
}Recommended Tools
SalesPro Hub territory mapper
Mapping software (Maptitude, MapInfo)
CRM territory management
Excel for calculations
Google Maps for validation
Frequently Asked Questions
How often should I rebalance territories?
Review annually, make major changes every 2-3 years. Too-frequent changes disrupt relationships and rep momentum.
What if reps have existing relationships in new territories?
Consider grandfather clauses for major accounts, or split commissions during transition period. Balance relationship preservation with optimal design.
How do I handle uneven territory potential?
Adjust quotas to reflect territory potential differences, or redesign boundaries to create more balance. Don't penalize reps for territory assignment.
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