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B2B Sales Glossary:
Sales Strategy & Planning
Master the essential revenue and financial metrics that drive B2B SaaS success. From ARR and MRR to retention metrics and customer economics, these terms are critical for understanding pipeline health, forecasting growth, and making data-driven decisions.
Territory Management
Short Definition
What Is Territory Management?
Territory management is the process of dividing a total addressable market into defined segments (geographic, vertical, company size, or account-based) and assigning those segments to individual sales reps or teams. The goal is to distribute market opportunity equitably and strategically so that every rep has a fair chance to hit quota, every account in the ICP is covered, and the organization maximizes revenue from its available market.
Territories can be defined in multiple ways: by geography (West Coast enterprise, Northeast mid-market), by industry vertical (fintech, healthtech, logistics), by company size (SMB under 50 employees, mid-market 50–500, enterprise 500+), or by named account lists. Many growth-stage SaaS companies use a combination: they segment first by company size, then by geography within each segment.
Poor territory design is one of the most underappreciated causes of sales team underperformance. Optimizing territory design can increase revenue by up to 7% without any change in headcount, quota, or product—purely by ensuring the right reps are covering the right accounts.
Why Territory Management Matters in B2B Sales
For sales leaders building a sales machine, territory management is foundational infrastructure. Uneven territories create structural unfairness: some reps sit on large, high-potential markets and exceed quota with minimal effort; others work exhausting territories with limited upside and churn out regardless of skill. The result is misleading attainment data, retention problems among good reps in bad territories, and a forecast that reflects territory quality rather than team quality.
Territory management is also a direct lever on forecast accuracy. When territories are well-designed and coverage is complete, pipeline generation is more predictable. You know what market exists, you know who is covering it, and you can model expected output. When territories overlap, have gaps, or are poorly sized, pipeline is unpredictable and forecasts suffer accordingly.
How to Design and Manage Territories Effectively
1. Start with total addressable market, not headcount.
Map your ICP across your target market before you assign territories. Understand how many accounts exist in each segment, their estimated deal value, and their propensity to buy. Territory size should be driven by market opportunity, not by how many reps you happen to have.
2. Balance territories by potential, not just by account count.
A territory with 500 SMB accounts may be worth less than a territory with 50 enterprise accounts. Build a scoring model that weights accounts by estimated deal size, fit score, and growth trajectory. Use that model to balance territories by revenue potential, not headcount.
3. Minimize territory overlap.
Overlapping territories create internal competition, confused buyers, and credibility problems. Establish clear rules of engagement: who owns what, what happens when two reps are pursuing the same account, and how account-level disputes are resolved. Document and enforce the rules.
4. Review territories at least annually — and after major headcount changes.
Markets shift, companies grow, and reps turn over. A territory design that was balanced 18 months ago may be significantly unbalanced today. Review territory coverage at the start of each fiscal year and whenever your team size changes by 20% or more.
5. Track territory performance as a diagnostic, not just an outcome metric.
If one territory consistently underperforms, investigate whether it is a rep issue or a territory issue before taking action. Coverage gaps, account quality, and competitive dynamics within a territory can all cause underperformance that looks like a rep problem on the surface.
Territory Design Models
Key Metrics and Benchmarks
Common Mistakes and How to Fix Them
Frequently Asked Questions
How often should territories be redesigned?
Most B2B SaaS organizations review and adjust territories annually as part of their fiscal year planning process. Interim reviews are warranted when headcount changes by 15–20% or more, when a new product is launched that changes the ICP, or when market data shows significant shifts in account density or value in specific segments.
What is the difference between territory management and account management?
Territory management is the strategic process of defining and assigning market segments to reps. Account management is the ongoing process of building and expanding relationships within specific assigned accounts. Territory management determines who owns what; account management determines what to do with it.
How do I handle accounts that grow from one territory segment into another?
Define clear rules of engagement in advance, typically based on account ARR, employee count, or a specific trigger date. Establish whether the account stays with the original rep, transitions to the new segment's rep at renewal, or is jointly covered during a transition period. Document the rules before the situation arises; real-time arbitration is costly and creates tension.
Can territory management software help, or is this a spreadsheet problem?
For teams under 10–15 reps, a well-maintained spreadsheet combined with CRM territory fields is often sufficient. Beyond that scale, dedicated territory management tools (Salesforce Territory Management, Fullcast, Varicent) provide modeling capabilities that make it easier to balance territories by opportunity score, visualize coverage gaps, and simulate the impact of headcount changes before they happen.
Updated February 27, 2026
Reviewed by Ben Hale