Sales teams hit their targets when territories make sense and quotas aren’t out of touch. Yet 91% of businesses saw their reps miss the mark in 2024, with most nowhere close to the goal.
Territories that don’t match opportunities and quotas that somebody pulled out of thin air usually cause these failures. Some reps get stuck working patches with hardly any solid prospects, while others coast in areas that are loaded with possible customers. That gap crushes motivation and sends the top performers out the door. Organizations that nail territory and quota planning usually lift sales by 7% or more without adding headcount or blowing up their plan.
Savvy businesses know how to slice up their markets and hand out accounts in a fair way, and set numbers that fire up the team instead of wearing them down. A wise strategy for territory design and quota setting changes sales from a shot in the dark to something a lot more reliable. It boosts your team in a big way when done right.
Let’s talk about it.
How Sales Territories Work with Quotas
Geography still matters when businesses design their territories. Modern sales territories can get pretty complex compared with just drawing lines on a map, though. A territory might include specific accounts, entire industries, or particular product lines instead. Maybe you cover all the healthcare firms across three states, or maybe you look after the big corporate accounts nationwide. It really depends on what makes sense for your company and the market that you’re in.
Quotas are the performance targets that come along with your territory. They tell you what you need to hit in revenue, new accounts, or other metrics. Quotas are your measuring stick for success in your assigned area.
Your territory and quota should work together like two tightly aligned gears in a machine. A territory with lots of market upside should come with a higher quota than one that has fewer opportunities. A lot of the time, organizations don’t nail this balance, and the problems start to show up.
Most organizations look at the past sales numbers when they’re drawing territory lines and setting quotas. They also think about the market upside and whether they have enough salespeople on hand to cover everything well. If last year’s rep sold a million dollars in that territory, they might set next year’s quota at 1.2 million to push for a bit more growth.
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Salespeople feel the effects fast when territories and quotas don’t match up well. I see this misalignment all the time – one rep ends up with an impossible quota in a weak territory while another coasts along with soft targets in a strong region.
Build Your Territory with the 80/20 Rule
Most sales leaders stumble across the same pattern once they dig into their territory data. Around 80 percent of your revenue is probably coming from just 20 percent of your accounts. This doesn’t happen by accident with the other accounts, either. It’s the Pareto Principle at work, and once you see it, you can’t ignore it.
Savvy sales teams build their territories around this reality. They track down those high-value accounts first, then spread them across different territories so the opportunity is balanced. Nobody wants to be stuck with a patch full of low-value accounts as the person at the next desk reels in all the big fish.
This makes territories more fair, not less fair. Once you see where all the revenue sits, you can give each rep a decent chance to hit their targets. Every territory ends up with a healthy combination of high-value accounts and growth prospects that they can chase.
Some businesses have had to learn this lesson the hard way. They lost their best salespeople because the territories felt rigged from day one. One rep would smash their quota with minimal effort, and another would work twice as hard just to reach half of theirs. Nine times out of ten, it isn’t a performance issue at all – it’s a territory problem that never got fixed.
You always start by getting the right data. Map out which accounts bring in the money versus which ones just soak up time and energy. Your top performers will like that you put real thought into this, and your struggling reps might impress you once they have some decent opportunities to work with. I see this turnaround all the time – it’s pretty amazing how quickly results can swing the other way.
Build Smart Quotas That Work for Everyone
Territory design might lay the groundwork for your sales operation. Quotas actually determine if your team hits its numbers. Most businesses completely get this wrong because they pick revenue targets out of thin air and then scratch their heads when their reps end up in full revolt.
The SMART framework gives you a reliable way to build quotas that actually make sense for everyone involved. Your quotas need to be achievable while still tying back to overall business goals, and they have to have deadlines that everyone knows from day one. Meet all five criteria, and your vague revenue hopes will turn into concrete goals that your team can go after with confidence.
Effective quota calibration has some simple benchmarks that you can follow in practice. If somewhere between 60 and 80 percent of your team is hitting their quotas, you’ve probably found that sweet spot that everyone keeps talking about. If everyone is crushing their numbers month after month, your targets are probably too easy and you’re leaving money on the table. You’ve set the bar way too high if only a handful of reps succeed while everyone else struggles, and the team morale will tank faster than you can imagine.
Organizations used to handle this in a simple way that was completely broken from the start. Executives would just announce quotas from their corner offices and expect everyone to fall in line without any question. Leading organizations now bring their sales teams into the process to set goals together as a collaborative group. They take the time to analyze historical performance data and study market growth rates in their particular industry. They also research what competitors are able to achieve in similar markets and conditions. This collaborative style takes more time at the start than the old top-down way. Sales reps who help create their own quotas will fight much harder to actually reach them.
Sales Territory Models That Work
Sales territories have been through a big change since the days when every rep had their own small slice of the map to work with. Back in those days, it made sense to carve up regions by zip codes and big highways. Sales teams were always on the road, and most of their time was divided between driving from one location to the next and sitting in conference rooms. In-person meetings were the only way deals actually got done.
We all know how much the business landscape has changed since then. Deals now close through video calls and email exchanges just as frequently as through in-person meetings. This big change has actually opened the door to some completely new ways of organizing territories that don’t depend on geography. Plenty of businesses are now assigning accounts based on company size instead of location. A single rep might wind up taking care of all the large clients in their portfolio, no matter whether those businesses are based in Seattle or Miami. Other organizations are dividing their territories by industry verticals and allow their reps to develop deep specialization in areas like healthcare, finance, or retail.
Account-based setups done right can give a lift to the total efficiency by somewhere between fifteen and twenty percent. Sales reps wind up wasting far less time stuck in traffic or at airports, and they get the chance to build much deeper expertise in their particular market segment. Of course, you still need to watch travel costs and avoid letting important relationships slip through the cracks. Nobody wants to hop on a cross-country flight just to attend each client meeting. Most B2B firms have figured out that a hybrid approach usually works best for their particular situation.
They might assign their biggest accounts on a national basis but keep the smaller clients within a short driving distance of their reps. Some organizations combine traditional geographic boundaries with industry specialization to get the best of all worlds. Your ideal balance changes with the type of product you’re selling and how long your normal sales cycles run. More complex products with longer sales cycles usually benefit quite a bit from having focused reps who know their market well. Basic transactional sales often still work best with the traditional territory setup.
Smart Tools for Better Territory Planning
Sales territory planning used to be this painful annual grind where you’d spend weeks hunched over spreadsheets and sit through meetings that seemed to drag on forever. AI tools can now crunch through all that customer data and determine how big your market could be in just a few minutes – the work that used to take entire months to finish. Even better, these systems can automatically calculate travel time between accounts and then match your reps’ strengths with the best opportunity areas.
Years ago, the way of operating was pretty basic – draw up the territories once a year and cross your fingers and hope everything worked out. Modern territory management is completely different – you can actually review and make small changes to your setup every quarter as market conditions change around you. If a competitor sets up shop in your backyard or the economy suddenly changes direction, you can pivot fast instead of being stuck until the next annual planning session rolls around.
Plenty of sales leaders get nervous that all this technology might eventually replace their experience and gut instincts. I get why that’s concerning. These tools actually give you more time to focus on the strategic aspects instead of becoming bogged down in endless number crunching. All the heavy data analysis gets handled automatically as you work on how to apply those findings to make your team more successful.
Predictive analytics can now flag problems well ahead of time, before your revenue takes a hit. If one territory gets overloaded with too many accounts or another doesn’t have enough real opportunity to keep a rep busy, you’ll get the heads-up weeks in advance. This early warning system means you can rebalance the workloads quickly, just as your top performers start feeling either overwhelmed or completely bored.
Modern quota management also lets you make realistic adjustments after unexpected events throw everything off track. You don’t have to leave your sales team stuck with impossible goals after a market downturn – you can recalibrate the targets fast and fairly. This flexibility keeps your reps motivated because their day-to-day work actually lines up with the opportunities waiting for them.
Level Up Your Incentives and Rewards
Territory and quota planning isn’t something that you nail overnight, and that’s actually a positive aspect. Building a system that your team can actually use ends up being just as valuable as having the final setup in place. Every adjustment you make along the way, every lesson you pick up from a misaligned quota or an unbalanced territory, teaches you something new about your market, your team, and what really drives performance day after day – and more than anything else, about how your salespeople show up each day.
It’s fascinating how much the whole process changes the entire culture of a sales organization once everything clicks. Your top performers stop feeling like they’re carrying the whole team, and your newer reps finally have a chance to hit their numbers and build true confidence.
Your employees around the office will go from explaining why targets were missed to celebrating wins and mapping out even bigger ones for next quarter. You can see a team move from being stressed and burned out to being energized and excited for bigger challenges.
Territory and quota planning may seem like just another admin chore. They’re actually the building blocks for sales teams that stay, continue growing, and hold on to their best talent for the long haul. It doesn’t matter if you have five reps or you’re running hundreds across a few regions – the same core principles apply. Start where you are now, use what you already have, and make one worthwhile improvement at a time.
Level 6 helps businesses build sales teams that really deliver. We stand apart because we concentrate on incentive programs that actually work – not another cookie-cutter reward plan that soon gets ignored. Your team might need a lift in performance, or you might want to raise morale and strengthen culture, and we have the right tools for the job. Our lineup ranges from branded debit cards to employee recognition programs, along with custom sales incentives built around what your business actually needs. Every program is adjusted to match your goals and challenges. Reach out for a free demo when you’re ready to see what true performance looks like and learn how successful businesses are lifting their sales results.
Claudine is the Chief Relationship Officer at Level 6. She holds a master’s degree in industrial/organizational psychology. Her experience includes working as a certified conflict mediator for the United States Postal Service, a human performance analyst for Accenture, an Academic Dean, and a College Director. She is currently an adjunct Professor of Psychology at Southern New Hampshire University. With over 20 years of experience, she joined Level 6 to guide clients seeking effective ways to change behavior and, ultimately, their bottom line.
