Sales Territory Planning Best Practices
Why Territory Planning Best Practices Matter
Most sales teams do territory planning, but most do it poorly. They create territories based on geography alone, ignore account potential, and don't balance workloads. They end up with territories that are too large, too small, or too unbalanced.
Good territory planning follows best practices. It balances territories for potential, considers rep capacity, reviews regularly, uses data, and minimizes overlap. It creates territories that enable coverage, minimize conflict, and optimize performance.
Here are the best practices for sales territory planning — what works, what doesn't, and how to optimize for performance.
Best Practice 1: Balance for Potential, Not Just Count
Most teams balance territories by account count alone. This creates imbalances — one rep might have 100 small accounts while another has 50 large accounts.
The problem: Balancing by count ignores account potential. Territories with the same account count can have vastly different revenue potential.
The solution: Balance territories by account potential (revenue opportunity), not just account count. This ensures equal opportunity.
How to do it:
- Calculate total potential (revenue opportunity) for each territory
- Ensure territories have similar potential
- Adjust as needed to balance
Why it matters: Equal potential ensures fairness and optimizes performance. Reps have equal opportunity to succeed.
Example: Instead of giving Rep A 100 accounts and Rep B 100 accounts, give Rep A 50 high-potential accounts ($2M potential) and Rep B 50 high-potential accounts ($2M potential). This balances potential, not just count.
Best Practice 2: Consider Rep Capacity
Many teams ignore rep capacity when planning territories. They assign territories without considering how much work reps can handle.
The problem: Territories that exceed rep capacity lead to burnout and poor performance. Reps can't effectively manage too many accounts.
The solution: Consider rep capacity — how many accounts they can manage, how many calls they can make, how much travel they can do.
How to do it:
- Assess rep capacity based on experience, skills, and workload
- Consider account complexity and requirements
- Match territories to rep capacity
Why it matters: Territories that match rep capacity optimize performance and prevent burnout.
Example: A junior rep might manage 50 accounts, while a senior rep might manage 100 accounts. Match territories to rep capacity.
Best Practice 3: Review Territories Regularly
Many teams create territories once and never review them. Territories become outdated as markets change.
The problem: Markets change. Accounts grow. Reps change. Territories that aren't reviewed become outdated and suboptimal.
The solution: Review territories regularly — quarterly or annually. Adjust as markets change, accounts grow, or reps change.
How to do it:
- Schedule regular territory reviews
- Analyze territory performance and imbalances
- Adjust territories as needed
Why it matters: Regular reviews keep territories current and optimized. They ensure territories reflect market reality.
Example: Review territories quarterly. If one territory is consistently outperforming others, rebalance to ensure fairness.
Best Practice 4: Use Data to Inform Decisions
Many teams plan territories based on intuition alone. They don't use data to inform decisions.
The problem: Intuition-based planning creates suboptimal territories. It doesn't account for account potential, rep performance, or market trends.
The solution: Use data — account potential, rep performance, market trends — to inform territory planning decisions.
How to do it:
- Analyze account data — size, industry, potential
- Review rep performance data — quota achievement, activity levels
- Consider market trends and growth
Why it matters: Data-driven planning creates better territories and improves performance.
Example: Use CRM data to analyze account potential. Use performance data to assess rep capacity. Use market data to identify growth opportunities.
Best Practice 5: Minimize Overlap
Many teams have overlapping territories. Multiple reps cover the same accounts, creating conflict and confusion.
The problem: Overlapping territories create conflict. Reps compete for the same accounts. Customers get confused. Deals get lost.
The solution: Minimize overlap. Create clear boundaries. Assign accounts to specific reps. Avoid shared ownership.
How to do it:
- Define clear territory boundaries
- Assign accounts to specific reps
- Avoid shared account ownership
- Resolve conflicts quickly
Why it matters: Minimizing overlap reduces conflict and improves clarity. Reps know their accounts. Customers know who to contact.
Example: Instead of having multiple reps cover the same geographic area, assign specific accounts to specific reps. Create clear boundaries.
Best Practice 6: Match Reps to Territories Strategically
Many teams assign territories randomly or based on convenience. They don't consider rep-territory fit.
The problem: Poor rep-territory fit leads to underperformance. Reps struggle with territories that don't match their skills or preferences.
The solution: Match reps to territories strategically. Consider rep skills, experience, preferences, and capacity.
How to do it:
- Assess rep skills and experience
- Consider rep preferences and strengths
- Match reps to territories that fit their capabilities
Why it matters: Good rep-territory fit improves performance and satisfaction. Reps perform better in territories that match their skills.
Example: Assign industry-specific territories to reps with industry expertise. Assign geographic territories to reps who prefer local relationships.
Best Practice 7: Document Territory Plans
Many teams don't document territory plans. They keep plans in their heads or in scattered documents.
The problem: Undocumented plans lead to confusion. Reps don't know their boundaries. Conflicts arise. Plans aren't followed.
The solution: Document territory plans clearly. Create maps, document assignments, define rules.
How to do it:
- Create visual territory maps
- Document account assignments in CRM
- Define territory rules and boundaries
- Share plans with the team
Why it matters: Documented plans prevent confusion and conflicts. They ensure everyone understands territory boundaries and assignments.
Example: Create territory maps showing boundaries. Document account assignments in CRM. Share plans with the team.
Best Practice 8: Optimize for Performance, Not Just Fairness
Many teams optimize territories for fairness alone. They balance potential and count, but ignore performance optimization.
The problem: Fair territories don't always optimize performance. They might balance potential, but not optimize for deal velocity or win rates.
The solution: Optimize territories for performance. Consider deal velocity, win rates, and sales cycle length.
How to do it:
- Analyze performance metrics by territory
- Identify optimization opportunities
- Adjust territories to optimize performance
Why it matters: Performance-optimized territories improve results. They maximize revenue and deal velocity.
Example: If one territory has faster sales cycles, consider assigning more accounts to that territory to optimize for velocity.
Common Mistakes to Avoid
Here are common mistakes to avoid:
Balancing by Count Alone
The mistake: Balancing territories by account count without considering potential.
The fix: Balance by account potential (revenue opportunity), not just count.
Ignoring Rep Capacity
The mistake: Assigning territories without considering rep capacity.
The fix: Consider rep capacity when planning territories.
Not Reviewing Territories
The mistake: Creating territories once and never reviewing them.
The fix: Review territories regularly and adjust as needed.
Creating Overlap
The mistake: Having multiple reps cover the same accounts.
The fix: Minimize overlap and create clear boundaries.
Ignoring Data
The mistake: Planning territories based on intuition alone.
The fix: Use data to inform territory planning decisions.
The Bottom Line
Sales territory planning best practices:
- Balance for potential — Not just count, but revenue opportunity
- Consider rep capacity — Match territories to rep capabilities
- Review regularly — Keep territories current and optimized
- Use data — Inform decisions with data, not intuition
- Minimize overlap — Create clear boundaries and assignments
- Match strategically — Align reps with territories that fit
- Document plans — Create clear maps and assignments
- Optimize for performance — Not just fairness, but results
Why it matters: Best practices create territories that enable coverage, minimize conflict, and optimize performance.
Common mistakes: Balancing by count alone, ignoring capacity, not reviewing, creating overlap, ignoring data.
The sales teams that succeed aren't the ones that wing territory planning. They're the ones that follow best practices — balancing for potential, considering capacity, reviewing regularly, and optimizing continuously.
That's how you create territories that enable performance — by following best practices and optimizing continuously.