Sales Territory Planning Guide: Steps, Tips & Examples

Learn how to create a sales territory plan that balances your team’s workload, expands your market reach, and drives profitability.

Even the most seasoned sales reps can struggle if they’re not targeting the right customers, in the right place, at the right time. Sales territory planning may sound like just another administrative task, but it’s one of the most reliable tools you can use to boost your team’s performance.

You wouldn’t expect delivery drivers to make efficient stops without a careful, pre-planned route. They’d be zigzagging across town, doubling back between drop-offs, and wasting fuel as packages destined for adjoining neighborhoods end up separated by miles of unnecessary driving.

Similarly, your sales team needs a clear, strategic plan that divides your total market into manageable segments. Without one, your selling environment can become chaotic, with the same reps pursuing the same accounts as more valuable sales opportunities go unaddressed.

Sales territory management doesn’t just prevent overlap and confusion; it offers a competitive advantage. According to the Sales Management Association (SMA), a majority (58%) of B2B sales organizations believe their sales rep territory plans are ineffective. But those with optimized plans see 10–20% greater sales productivity, a 10–15% increase in cost reduction and reallocation, and 20% more revenue growth opportunities. Meanwhile, existing and potential customers receive more targeted attention from reps specializing in their particular market segment, ultimately boosting customer retention and loyalty.

Whether you’re putting together your first sales territory plan or refining your existing approach, this guide will walk you through the planning process from end to end – so you can map out balanced, high-impact territories that set your team up for success.

What is a sales territory plan?

A sales territory plan is a blueprint dividing your addressable market into practical blocks that your team can reasonably cover. It’s essentially a strategic and structured approach to selling, helping you decide which salespeople should sell to which customers in which locations.

That said, it’s a much more nuanced process than just drawing lines on a map.

Traditionally, sales territory designs were based on geographical location alone. But today, an effective territory plan needs to account for a variety of factors.

Geographic boundaries: Defining the physical areas each sales rep should cover, whether by zip code, county, state, or even country
Account distributions: Assigning specific companies or prospects to different sales team members
Customer segments: Grouping different accounts and customer types by company size, industry, service needs, and other relevant criteria
Sales and revenue goals: Setting specific targets and KPIs for each territory
Resource allocations: Dedicating a specific amount of time, budget, and support resources to each territory
Coverage strategies: Outlining the right sales approach and cadence to accounts within each territory

Unlike sales performance management (SPM) and sales planning, which focus on high-level quotas and revenue targets, territory planning zooms in on the “who, where, and how.” It’s the difference between saying, “We need to sell $10 million this year,” and mapping out exactly how your team will divide and conquer the market to hit that number.

Without predefined territories, you leave your market coverage to chance. Reps will naturally gravitate toward the same high-profile accounts, leading to a frustrating, competitive sales environment and a confused customer experience. Giving reps dedicated hunting grounds allows them to develop deeper expertise, build more meaningful customer relationships, and become trusted advisors within their space.‍

Why do you need a sales territory plan?

When sales leaders talk about boosting sales performance, they often turn to the usual suspects: training programs, CRM upgrades, and trending sales methodologies.

However, a thoughtfully designed territory plan can deliver ROI that puts those other initiatives to shame – and often with far less upfront investment.

Let’s break down the true business impact of effective sales territory planning and how a solid plan can contribute to your bottom line.

Shorter sales cycles

Focusing on dedicated territories allows sales reps to recognize patterns in their customer base’s business needs and buying patterns. That helps them spot opportunities more quickly, navigate deals more efficiently, and forecast future revenue more accurately.

Higher win rates

When territories are strategically organized around industry verticals or customer segments, sales reps develop deeper expertise on their prospects’ business challenges and needs. This can transform shallow, transactional relationships into more personal, consultative partnerships.

Personalization, in turn, drives higher conversion rates and revenue growth. According to McKinsey, 77% of sales organizations that take a direct, one-to-one approach see a significant increase in their market share.

Enhanced customer experience

In a similar vein, nothing makes leads tune out faster than receiving multiple disconnected pitches from the same sales team. And they can’t tune in if they’re overlooked entirely.

Territory planning establishes clearer account ownership, ensuring prospects consistently engage with a familiar sales rep and build the sorts of relationships that boost trust and close deals.

Lower costs

Well-designed sales territories minimize travel waste for field teams and optimize call patterns for inside sales teams, reducing your overall customer acquisition costs.

Greater productivity

According to Salesforce, sales reps still spend 70% or more of their work time on non-selling activities, including prioritizing new lead opportunities (8%), tending to administrative tasks (9%), and planning their approach (9%).

Smart territory planning claws back productive hours by grouping accounts more logically and strategically, minimizing travel time and decision fatigue while allowing sales reps to focus on the highest-value accounts first.

Balanced team performance

Thoughtful territory distribution means sales opportunities are allocated more equitably across your team, ensuring each sales rep can perform at their best.

It also contributes to more meaningful performance metrics for coaching and compensation purposes, offering a more accurate picture of genuine sales talent (versus unfair advantages arising from uneven prospects).

Reduced turnover

Similarly, when sales reps see territory assignments as fair and balanced, they’re more likely to be motivated and to build meaningful relationships with coworkers they see as their support network – rather than their competition.

This can boost morale and camaraderie, lower costly turnover rates, and reduce the ramp time needed to get new hires up to speed.

New market opportunities

Sales teams can create micro-territories for emerging markets or new product launches, allowing them to cultivate promising segments without diverting attention to their already established revenue streams.

The bottom line? While a poorly designed territory structure can silently sabotage even the most skilled sales team, a thoughtful approach can become a competitive edge – transforming how efficiently you cover the market, how effectively you engage with customers, and how consistently you hit your numbers.

How to create a sales territory plan

Putting together an effective sales territory plan isn’t an exact science, but it does require a precise assessment of your market and team. Here are eight steps you can take to build one that actually works.

1. Map out your current market landscape.

Start with the facts on the ground, plotting out your existing customers and high-potential prospects. Where are they clustered, and what industries dominate in which regions?

This will establish a baseline and a reality check – preventing you from creating territories that look good on paper but make little sense in practice.

2. Clarify your customer segments.

Not all accounts are created equal. You can break your market into meaningful segments based on criteria like company size, vertical, purchasing patterns, and/or growth potential.

This segmenting exercise will set the foundation for how you group different accounts within individual territories.

3. Take full stock of your talent.

Be honest about your team’s strengths, weaknesses, and selling capacity. Some reps will shine with enterprise accounts, while others will thrive in high-volume small business sales. Some can handle broad geographic areas, while others need to focus on narrower patches.

Your territory structure should consider the realities of your existing team and account for how it may grow or evolve in the future.

4. Draw intentional boundaries.

Now comes the actual territory mapping. Whether you’re using geography, industry, product line, or account size as your main delineator, you should ensure each territory you create has:

A manageable number of accounts
A reasonable geographic span for field reps
Balanced revenue potential
Clear, non-ambiguous boundary lines

This will ensure you’re creating territories that are both fair and realistic for your team.

5. Set territory-specific targets.

While your high-level business goals are important, it’s more important to break them down into narrower, territory-level expectations that reflect the unique characteristics and needs of each area.

For example, a territory containing mostly enterprise accounts will call for different metrics than one focused almost entirely on SMBs.

6. Create separate account tiers.

Not every account within a territory needs (or deserves) equal levels of attention.

You can implement a tiered system that prioritizes accounts based on their worth and helps reps focus their time and efforts on the most promising opportunities.

7. Develop actionable territory playbooks.

Different types of territories may require different selling rhythms and activities.

Documenting your recommended approach, cadence, and strategic plays for each territory type will give your sales reps a working framework so they don’t have to reinvent the wheel with each new sales strategy.

8. Build in review processes.

The market is never static, and your territories shouldn’t be either.

Ideally, establish check-ins at least quarterly to assess your territories’ performance and make any necessary adjustments. Be sure to flag any emerging imbalances before they become full-blown disparities that damage your team’s morale and motivation.

30-60-90 sales territory plan checklist

When a newly hired or recently reassigned rep takes over a new territory, having a structured framework for their first three months can enhance their productivity and performance.

Here’s a practical checklist that sales managers and sellers can use to ensure they’re starting off on the right foot.

Days 1-30: Discovery and relationship mapping

The first month should focus on learning about the territory landscape and establishing important relationships.

Complete a thorough territory audit, cataloging existing customers, active opportunities, overlooked accounts, and competitive threats.
Review account history, studying what has worked and failed previously in this territory.
Flag priority accounts, highlighting the top 20% of accounts that will likely drive 80% of results.
Make introductory calls to current customers, emphasizing account continuity and your ongoing commitment to their success.
Identify key stakeholders and decision-makers, particularly on priority accounts, and create basic profiles with their details and preferences.
Meet with cross-functional partners, including customer success, marketing, and product team members who also support the territory.

Remember, at this stage, the goal isn’t to close deals. It’s to build a foundation of knowledge and relationships that will fuel future success.

Days 31-60: Strategic engagement and pipeline growth

With your baseline knowledge in place, the focus during this stage should be on activating the territory.

Apply an account prioritization system based on potential value and likelihood of conversion.
Develop account-specific customer engagement plans for your top-tier prospects.
Execute a structured outreach campaign to revive dormant or underperforming accounts.
Identify and pursue two to three quick wins, at minimum, to build up your momentum.
Draft territory-specific value propositions that address the unique challenges and pain points in your area.
Set a consistent schedule for territory management, including call days, field visit routing, etc.
Begin tracking key metrics for each territory to establish your performance baselines.

By the end of your second month, you should have a clear sense of your territory’s true potential, as well as a growing pipeline of vetted opportunities.

Days 61-90: Optimization and acceleration

In the final phase, you should focus on refining your approach based on your initial results.

Analyze early response patterns to identify which segments are most and least receptive.
Double down on high-performing tactics, and move away from activities with lower overall impact.
Develop deeper relationships within your most engaged accounts and with any champions you’ve identified.
Identify cross-selling and upselling opportunities among existing accounts, looking for quick ways to expand your relationship.
Create a territory growth plan that looks 6–12 months into the future.
Share territory insights with your product, marketing, and customer success teams and review your performance on shared metrics.
Find a sustainable sales rhythm that balances new business development with ongoing account management.

By the end of this framework, your reps should have turned an unfamiliar group of accounts into a strategically managed territory with clear priorities, mature relationships, and a healthy growing pipeline.

The beauty of this approach is its scalability. It works whether you’re managing a territory of 50 enterprise accounts or 500 SMBs. The essential steps remain the same, even as the implementation details may shift.

Sales territory plan examples

Theory is one thing, but seeing how territory plans work in practice is where the real learning happens. Let’s look at four approaches to territory planning that have proven effective across different sales models.

B2B enterprise

For a company selling enterprise software solutions, averaging around $250 in deal size, a territory model might focus on named accounts within specific industries across a large geographic region.

A territory built around 75–100 target enterprises, with accounts tiered by potential annual contract value, could look like:

Tier 1: 15–20 strategic accounts with $500K+ in revenue potential, requiring weekly touchpoints
Tier 2: 30–40 growth accounts with $250-500K in revenue potential, requiring biweekly engagement
Tier 3: 40–50 development accounts with future revenue potential, requiring monthly nurturing

A rep managing this territory could collaborate with sales development reps supporting prospecting efforts. Success metrics might target net-new logos, expansion revenue within existing accounts, and accelerating closing speed.

Field sales

For a medical device company with a direct field sales force, a territory might be structured geographically, covering a 75-mile radius around a major metropolitan area with a high hospital density. A territory could include:

12 hospital systems as a primary focus
35 independent clinics
8 purchasing groups influencing multiple facilities

A sales rep might be expected to make 15–20 in-person calls per week, following a rotating schedule where major accounts receive biweekly visits and smaller accounts receive monthly visits. The plan should also include detailed travel routes to maximize face time with customers while minimizing driving time.

Inside sales

A SaaS company targeting mid-market businesses might define a territory by industry and company size, focusing on financial service providers with 100-1,000 employees across the Northeast. For them, a territory could contain:

450 total accounts, organized into fintech, banking, and insurance micro-territories
Daily activity targets of 40–50 outreach attempts
Weekly goals of 8 demos and 3 proposals

The territory plan would need to include specific cadences for different account types, with tailored messaging for each industry segment and clear instructions for when to transfer accounts to specialists or managers.

Hybrid scenarios

For a modern business solutions provider using both digital and human touchpoints, a territory plan might segment accounts by preferred buying method in addition to size or industry. For example:

Self-service segment: 1,000 or more smaller accounts managed primarily through automated marketing and digital sales tools
Inside sales segment: 300 mid-sized accounts receiving proactive outreach via phone and video conferencing
Field segment: 50 strategic accounts calling for regular in-person meetings

This territory plan would outline trigger points for accounts to move between segments based on growth, engagement, or evolving customer needs. It would also define clear handoff procedures to move accounts between digital, inside, and field sales teams to ensure a seamless customer experience.

Measuring success

A territory plan is only effective if it delivers results. But determining whether your model is actually working means looking beyond basic sales numbers. You’ll want to keep your eye on a range of important metrics.

Territory penetration: Measuring what percentage of accounts in each territory are active customers. Low penetration rates can indicate untapped potential.
Quota attainment balance: Measuring whether all territories are hitting the same percentage of sales quotas, or some are overperforming while others struggle. Wider discrepancies can suggest issues with your territory design.
Sales activity distribution: Measuring the spread of sales efforts across each territory. If certain pockets get all the attention while others remain untouched, your territory map could likely use a review.
Travel efficiency: Measuring the ratio of time spent on direct customer interactions to time spent traveling for field sales. A disproportionate balance could be your first red flag for inefficient routing.
Account growth by territory: Measuring whether existing accounts are expanding at similar rates across territories. If some territories are better at growing their base, it could suggest an imbalance in your plan.

At some point, territory adjustments are inevitable, but your timing and approach matter.

You can tend to minor tweaks every quarter – moving a few accounts between sales reps to balance workloads or address coverage gaps – but you want to save moderate realignments and major overhauls for bi-annual or annual reviews unless you’re facing an urgent market crisis. These significant shifts can lead to productivity dips as your team adapts.

Keep in mind, too, that territory planning and optimization is never “done.” The best strategies evolve as the market shifts, products change, and your team evolves.

Watch the On-Demand Demo now and Level Up Your Territory Planning with Pigment. Discover how to map balanced, high-impact territories that drive revenue growth.

Common challenges in sales and territory management

There are a few territory traps that can snag even the most seasoned sales leaders. But you can sidestep them with a bit of forethought and careful planning.

The mistake: Dividing territories into seemingly “fair” equal parts

Equal isn’t always equitable. You may think equal slices of acreage, accounts, or potential revenue mean equal prospects, but there are nuances behind those numbers. A territory with 100 accounts in a mature market behaves nothing like a territory with 100 accounts in an emerging one. And terrain that looks manageable on a map might involve grueling travel logistics.

The fix: Layer multiple factors into your territory design. These should include, at minimum, account potential, market maturity, travel constraints, and buying cycles. Aim for balanced opportunities, not identical territories.

The mistake: Treating territories as permanent fixtures

Territories are living, breathing frameworks that change along with your industry and your business. What is a perfectly balanced territory today may become wildly imbalanced in a year if the market landscape shifts beneath it.

The fix: Build regular territory reviews into your calendar. Work in preset flags that trigger adjustments – like when a territory consistently surpasses or misses targets by a given margin. In those cases, it’s time to reassess, not to praise (or blame) the sales rep.

The mistake: Ignoring account growth trajectories

Today’s small account might be tomorrow’s whale. If you assign territories based only on current account value, you’re missing the bigger picture of how those accounts will grow over time. And if you assign all the accounts with high growth potential to one territory – while filling another with stable but stagnant customers – a future imbalance is almost certainly brewing.

The fix: Include growth projections in your territory plan. Spread accounts with high growth potential across different territories to ensure long-term sustainability and fairness.

The mistake: Designing territories in a vacuum

Your sales reps are people with individual strengths, weaknesses, and areas of expertise. Some reps thrive on high-volume, transactional selling, while others prefer more complex, relationship-based deals. Putting a relationship-builder in a territory that demands rapid-fire transactions will set everyone up to fail.

The fix: Consider your team’s skill sets and personalities when assigning territories. You can’t completely tailor your territories to personal preferences and styles. But you can set your reps up for success by designing with them in mind. Sometimes, switching just a few accounts to align with salespeople’s talents can vastly improve performance.

The mistake: Enforcing overly rigid boundaries

It may seem like building walls around territories and preventing account sharing will help you eliminate all possible conflicts. But some accounts benefit from having multiple perspectives or specialties at the table, and forcing them into the exclusive domain of a single rep can hurt your chances of closing.

The fix: Create intentional areas of overlap for strategic accounts. Allow multiple reps to contribute and collaborate under clear rules of engagement, with fair compensation structures that encourage teamwork (rather than turf wars).

The mistake: Basing territories on outdated, incomplete, or inaccurate data

Territory designs are only as good as the data that shapes them. If your account records are rife with errors, missing important details, or not up to speed, your territories will have those flaws built in.

The fix: Invest in a thorough data cleansing sprint. Or, better still, work with best-in-class sales planning software that provides real-time insights. You’ll want to verify firmographic and demographic details, update contact information, and fill in critical gaps about account potential and relationships – and you’ll want to do all of this before mapping out your territories.‍

Leveraging sales territory planning software

The days of plotting territories with pushpins on maps or juggling unwieldy spreadsheets are long gone. Modern, tech-driven territory mapping software can automate many of the manual tasks that have historically held teams back – and they surface better sales data and deeper insights to boot.

The right territory planning technology delivers immediate advantages, including:

Interactive visualizations that transform complex market data into intuitive visual maps, revealing patterns that spreadsheets alone can’t display
Scenario planning capabilities that run “what-if” analyses and test different territory configurations before they’re implemented
Multi-layered designs that automatically balance territories based on criteria like revenue potential or geographic breadth
Real-time performance tracking that identifies imbalances on a constant basis rather than waiting for quarterly reviews
CRM integrations that ensure territory data is automatically flowed into the right records and systems without manual interventions
AI-powered recommendations that suggest territory plan improvements based on historical data patterns
Workload modeling that accounts for different selling activities and time/travel requirements across customer segments

Of course, sales territory planning tools can’t solve major challenges alone. The right approach combines advanced technology with your team’s on-the-ground insights – along with clean customer data, clear business rules, and regular review cycles – to drive smarter territory decisions.

With the right platform at your back, however, you can ditch the territory planning busywork and stay one step ahead of the competition.

Key takeaways

Your sales territories are either working for you or against you; there’s no middle ground. But careful planning can ensure you’re building a solid foundation for selling excellence.

When paired with modern, tech-forward sales planning tools, sales territory planning gives teams the visibility, agility, and control they need to optimize every corner of their addressable market with data-driven decisions – instead of just gut instinct.

Level up your territory sales plan with Pigment

Pigment’s sales performance management platform provides everything you need to take your territory plan from strategy to execution.

Request a demo to learn how we can maximize your market strategy and impact – or watch a live product tour to see our industry-leading territory planning solution in action.