How to Create a Sales Territory Plan: A Step-by-Step Guide to Achieving Success in 2025

Sales reps often find themselves competing for the same customers, creating confusion, inefficiencies, and missed opportunities. 

The result? Under-served regions, overwhelmed sales teams, and untapped revenue. This chaos not only hampers productivity but also leaves a substantial amount of potential on the table. 

In today’s highly competitive market, a well-structured sales territory plan is just as crucial as your sales compensation strategy. According to the Sales Management Association (SMA) (2024) reports, 58% of B2B companies rate their territory design efforts as ineffective, pointing to the need for a well-structured plan to eliminate these issues and drive growth. 

A strategic territory plan helps ensure that each sales rep is aligned with the right accounts in the right regions, effectively optimizing coverage while reducing internal competition. Without this clarity, resources are misallocated, and sales efforts become fragmented. 

In this guide, we’ll walk you step-by-step through how to create a sales territory plan that fosters fairness, enhances focus, and drives sustainable growth. By the end, you’ll have the tools and strategies to design a territory plan that maximizes your team’s efficiency and sets the foundation for long-term success.

What Is a Sales Territory Plan?

A sales territory plan is a structured strategy that defines how sales reps cover specific regions, industries, or accounts to maximize revenue and efficiency. It’s a strategic blueprint that ensures each sales rep is allocated the right set of customers or prospects within a defined geographical area, vertical, or account type. 

The core purpose of a territory plan is to balance workloads, ensure comprehensive market coverage, and increase the overall effectiveness of the sales team. 

By strategically defining boundaries, whether based on geography, industry, or account size, a territory plan enables reps to manage their resources and time more efficiently, ultimately boosting both sales performance and team morale.

Territory Planning vs. Account Planning

While sales territory planning and account planning are both essential components of a sales strategy, they are fundamentally different. Understanding these differences is key to optimizing both processes.

Sales territory planning provides the foundation by setting up clear boundaries for where and how sales reps will operate, while account planning dives into the specific tactics and strategies that reps will use to engage those accounts within their designated territories.

Now that we’ve defined what a sales territory plan is and distinguished it from account planning, let's explore why building one correctly can be a powerful growth multiplier for your business.

Key Benefits of a Well-Structured Territory Plan

A well-structured sales territory plan is not just a tool for organizing your sales team; it brings measurable benefits that impact both day-to-day operations and long-term growth. Here’s how an optimized territory plan can drive success:

1. Improved Sales Efficiency (More Coverage, Less Overlap)

One of the most immediate advantages of a well-designed territory plan is enhanced sales efficiency. By clearly defining territories, you eliminate the confusion and wasted time that comes from multiple reps chasing the same accounts. This reduces overlap, ensuring that your team isn’t competing for the same leads. 

With defined regions or sectors, each sales rep can focus their efforts on customers who fall within their specific territory, maximizing the time spent on high-value prospects. The result is better coverage across the market and more opportunities being pursued simultaneously, without the inefficiencies of duplicated efforts.

2. Higher Rep Productivity and Morale

When sales reps are clear on their territories and understand where to focus, their productivity naturally increases. A structured plan provides clarity on goals and expectations, making it easier for reps to prioritize their efforts. This clarity leads to higher motivation, as reps feel empowered to manage their regions without competing with colleagues. 

Moreover, when territories are balanced and fair, reps are more likely to trust the system, leading to better morale. Feeling confident in their ability to hit sales targets due to an effective territory plan can significantly reduce turnover and burnout, which in turn boosts overall team performance.

3. Better Customer Coverage and Stronger Relationships

With a well-organized territory plan, sales teams are able to give each customer the attention they deserve. This leads to stronger, more meaningful relationships. When reps focus on a specific set of accounts in their territory, they have more time to build rapport and understand the needs of their customers. 

As a result, they can tailor their sales strategies to meet those needs, leading to improved customer satisfaction, loyalty, and retention. Over time, these stronger relationships can result in repeat business and referrals, creating a steady revenue stream.

4. More Accurate Forecasting for Leadership

Sales leaders need reliable data to make informed decisions about the future. A clear territory plan makes forecasting much more accurate, as it provides a structured approach to tracking performance across different regions or market segments. 

With visibility into how each territory is performing, leadership can predict sales trends, allocate resources more effectively, and identify areas where additional support may be needed. This accuracy helps prevent surprises and ensures that the business is well-prepared to meet its revenue goals.

5. ROI Impact: Cost of Sales, Quota Attainment, and Revenue Growth

The financial impact of a well-structured territory plan is significant. By optimizing sales coverage and eliminating inefficiencies, businesses can reduce the cost of sales. When sales reps are focused on the right prospects in the right territories, they’re more likely to close deals, improving quota attainment across the team. 

This leads to more predictable revenue and a higher return on sales investments. Companies that take the time to build an optimized sales territory plan often experience increased revenue without the proportional increase in sales costs, making it a key factor in driving profitability.

With these key benefits in mind, it’s clear that a well-structured territory plan isn’t just an operational tool; it’s a growth engine. By improving efficiency, boosting morale, strengthening customer relationships, and providing more accurate forecasts, your sales team will be primed for success. 

Now, with the benefits of a territory plan clear, let’s walk through the exact framework you can follow to create a sales territory plan that drives these outcomes for your business.

Step-by-Step Framework for Creating a Sales Territory Plan

Building a sales territory plan requires careful thought and execution. By following a structured, step-by-step process, you can ensure your sales team is focused, efficient, and set up for success. Below is a framework to guide you through each essential step.

Step 1: Define Sales Goals and Objectives

The first step in crafting your sales territory plan is to define your sales goals and objectives. Deciding on your focus is crucial. Are you prioritizing new customer acquisition, expansion, or customer retention? Each of these objectives will influence how territories are structured.

For instance, a SaaS company might focus on acquiring new customers in emerging markets, while a medical device company could prioritize expanding its presence within hospital networks. These goals should directly align with the broader strategy of the company, ensuring that sales efforts are contributing to the overarching business vision.

Additionally, ensure that your goals align with your sales compensation structure. Sales reps should be incentivized to meet the right objectives, whether it’s bringing in new clients or nurturing existing relationships, so their goals are directly tied to the territory’s priorities.

Everstage helps you align your sales territories with your broader business goals, ensuring each region is structured for maximum impact. 

With real-time data and performance insights, you can design balanced territories, set achievable quotas, and plan more strategically. Everstage also makes it easier to visualize coverage, identify growth opportunities, and keep your team focused on the right markets to drive consistent revenue growth.

Step 2: Analyze Customers and Market Data

Once your objectives are clear, the next step is to dive into customer and market data. Start by reviewing your CRM to understand the current distribution of customers across your regions. This data will give you a snapshot of where your existing customers are located and how they’re performing.

You should also supplement this with external data like market share, competitor presence, and customer demographics to gain a deeper understanding of the market landscape. 

Look for patterns such as revenue concentration using the 80/20 rule, which often reveals that around 20% of your customers generate 80% of your total revenue. 

When applied to sales territories, this insight helps you identify which regions, accounts, or customer segments contribute the most to your bottom line. You can then ensure that high-value areas receive the right level of sales coverage and resources, while optimizing underperforming territories. 

Additionally, perform a white space analysis to uncover regions or segments that are underserved or not currently being targeted, allowing you to balance workloads and maximize overall sales potential.

Step 3: Segment Accounts and Prioritize Opportunities

Now that you have a better understanding of your customers and the market, it’s time to segment your accounts based on their revenue potential and strategic value. This process involves tiering accounts into categories such as Tier A, Tier B, and Tier C.

• Tier A: These are high-value strategic accounts that require more focus and resources.
  
  
• Tier B: These are mid-sized accounts with solid growth potential.
  
  
• Tier C: These are smaller accounts or leads managed by SDRs for prospecting.

In addition to size and industry, you should also consider Customer Lifetime Value (CLV) when segmenting accounts. CLV helps you understand which accounts have the most long-term value, ensuring that high-potential clients get the attention they deserve.

By tiering your accounts, you prioritize your efforts and ensure that resources are allocated where they will yield the greatest return.

Step 4: Conduct a Sales Territory SWOT Analysis

Before finalizing your territory design, it’s essential to understand both your internal capabilities and the external market factors that can influence your territory performance. A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is an excellent tool for this.

• Strengths: Identify areas where your team excels, such as a strong customer base in a specific region or experienced local reps.
  
  
• Weaknesses: Recognize areas that need improvement, such as limited brand awareness or inconsistent follow-up.
  
  
• Opportunities: Look for untapped regions, emerging industries, or competitor gaps that can be leveraged.
  
  
• Threats: Consider external risks such as new competitors, economic downturns, or regulatory changes.

This analysis will help you identify the most promising regions and markets, ensuring that your territories align with your team's strengths and market opportunities. Use this data to inform your territory design, ensuring it’s aligned with both your internal capabilities and external market dynamics.

Step 5: Choose the Right Territory Design Model

Once you have a clear understanding of your SWOT analysis, it’s time to choose the right territory design model. Each model has its strengths, and the best choice depends on factors like company size, product type, and market dynamics. Here’s a quick decision matrix to guide your selection:

The model you choose should align with your sales cycle length, product complexity, and team maturity. For instance, if you sell enterprise software across regions, a hybrid model allows you to maintain local coverage while dedicating resources to key accounts.

Step 6: Map Territories Strategically

With the territory model in place, it’s time to map your territories. This involves determining the boundaries of each territory while ensuring they’re balanced in terms of opportunity and workload. Mapping software like Salesforce Maps can help you visualize your territories, making it easier to spot regions that need adjustment.

Ensure that territories are distributed fairly and in a way that prevents reps from stepping on each other's toes. Avoid overlapping territories (sometimes referred to as "sales land grabs"), which can cause confusion and reduce team collaboration. 

Step 7: Assign Territories to Reps Fairly

Assigning territories isn’t just about geography; it’s also about matching the right reps to the right areas based on experience and capabilities. For example, senior reps with experience in managing complex deals might be better suited for larger, more strategic accounts, while junior reps or SDRs could handle smaller accounts or lead-generation-focused territories.

Also, make sure that the quota potential of each territory is aligned with rep compensation. If a territory is too large or difficult to manage, it could demotivate your sales reps. Ensuring fairness in territory assignments helps maintain rep morale and ensures that everyone has a reasonable chance of meeting their quotas.

Step 8: Build Territory-Level Sales Action Plans

Each rep should have a clear action plan for their assigned territory. This plan should include account prioritization (e.g., Tier A/B/C), daily or weekly activities (meetings, outreach, demos), and a forecast for the territory’s revenue.

For example, you might set a goal for a rep to target 10 Tier A accounts each month, with the expectation of conducting two demos per account. These concrete action plans ensure reps stay focused and organized, working towards measurable targets. Providing templates or frameworks can further streamline this process and help keep reps on track.

Here’s a Territory-Level action plan template example:

Step 9: Track, Review, and Optimize Regularly

Finally, no territory plan should remain static. Sales teams, markets, and opportunities evolve, and your territory plan should be flexible enough to accommodate those changes. Set up regular reviews to track key performance indicators (KPIs) and ensure territory effectiveness.

Here are some KPIs to track, along with calculation methods and industry benchmarks:

Sales Volume Per Territory: 

Sales volume per territory represents the total revenue or units sold within a defined geographic or account-based territory. It provides a snapshot of how each region performs compared to others and serves as a leading indicator of market potential and rep productivity.

How to Calculate: Sales Volume per Territory = Total Sales Revenue (or Units Sold) in Territory ÷ Defined Time Period

Industry Benchmark: Varies by industry, customer segment, and pricing model. There is no standard benchmark for Sales Volume Per territory since factors such as market maturity, product lifecycle, and customer base differ greatly.

Quota Attainment Rate

This KPI evaluates the percentage of sales representatives meeting or surpassing their assigned quotas. It is a critical indicator of how realistic your sales targets are and how effectively your teams are performing against organizational goals.

How to Calculate: Quota Attainment Rate = (Number of Sales Reps Meeting or Exceeding Quota ÷ Total Sales Reps) × 100

Industry Benchmark: According to Forrester, the average quota attainment rate across industries is around 47–50%, meaning fewer than half of sales reps hit their targets, a figure that has been trending downward in recent years.

Market Penetration Rate

Market penetration rate indicates how much of your target market has been captured in a specific territory. It reflects your brand’s market reach and the effectiveness of sales efforts within that area.

How to Calculate: Market Penetration Rate = (Current Customers in Territory ÷ Total Addressable Customers in Territory) × 100

Industry Benchmark:
Market penetration rate varies widely by industry. For example, according to KPI Depot, consumer products may aim for 60–80% penetration in mature markets, while SaaS or B2B services typically range between 5–20% due to niche targeting.

Sales Cycle Length

Sales cycle length captures the average time taken for a deal to progress from initial engagement to closing. It helps assess the efficiency of your sales process and pipeline management.

How to Calculate: Average Sales Cycle Length = Total Days to Close All Deals ÷ Number of Deals Closed

Industry Benchmark: Sales cycle length depends heavily on deal size and product complexity. Therefore, they can vary across industries.

Quarterly reviews should be used to assess market changes, rep feedback, and overall performance. Use analytics dashboards to track performance metrics in real-time, linking them to both compensation and territory goals. This helps ensure that adjustments can be made swiftly to improve results.

By following these steps, you’ll have a robust framework for creating and managing a sales territory plan that drives revenue growth. 

Conclusion: Turning Territory Plans into Revenue Growth

A well-structured sales territory plan is key to driving revenue growth. By following a clear framework, defining goals, analyzing data, segmenting accounts, mapping territories, executing the plan, and optimizing regularly, you create a strong foundation for success. 

But remember, a territory plan is not a one-time effort. It’s a living system that must evolve with shifting markets and business objectives. Regular updates ensure that your sales team remains focused on high-value opportunities and is agile enough to adapt to new challenges.

To maximize the effectiveness of your territory plan, pair it with sales compensation analytics. Aligning territories with the right compensation structure ensures that your reps are incentivized to target the right accounts and achieve their goals.

For an all-in-one solution, tools like Everstage let you seamlessly integrate territory planning and sales compensation management. With real-time data and actionable insights, you can design balanced territories, set achievable quotas, and align incentives all in one platform. 

Take your territory planning and sales performance to the next level. Book a demo with Everstage today to see how you can align your territories, quotas, and compensation for maximum growth.