The Hidden Cost of Poor Territory Planning

Territory planning often occurs behind the scenes. For many sales orgs, it’s a spreadsheet project that’s squeezed between end-of-year goal setting and annual kickoff. But when it’s not done right, your territory plan can lead to consequences far beyond simple administrative headaches. 

Misaligned territories can lead to lost revenue, low morale, and lackluster sales data, to name a few. Keep reading to explore the hidden cost of poor territory planning — and why ignoring your territory strategy is more expensive than you think.

Missed Revenue Opportunities 

At its core, territory planning is about maximizing coverage and optimizing your team’s ability to reach the right customers at the right time. When territories are designed without considering market potential, rep capacity, or historical performance, the result is often uneven and inefficient coverage. 

Reps might miss out on high-potential accounts due to geographic oversights or fail to reach quota due to low-opportunity territory assignments. Or, a high-performing rep might be assigned to a territory with limited growth potential while a less experienced rep may be overwhelmed with too many accounts. Either way, you’re leaving money on the table. 

How much money? Research from Harvard Business Review shows that optimized territory designs can increase sales up to seven percent without any additional resources or strategy changes. Those lost deals, untapped upsell potential, and leaky pipelines add up quickly!  

Burnout and Low Rep Morale 

A sales rep’s success is often tied directly to the accounts and regions they’re assigned to. Reps feel a strong sense of ownership over their territories — and understandably so. When territory assignments feel unfair or unclear, rep and team morale is likely to decrease. 

Reps in high-demand territories may risk burnout from a heavy workload while those in underperforming areas may feel set up to fail. These territory imbalances can lead to disengagement or employee churn. 

Failing to address the human element of sales territory planning can result in increased attrition, loss of institutional knowledge, and thousands of dollars spent rehiring and onboarding new reps. No one has time for that!

Inefficient Use of Sales Resources 

Your sales team is an incredibly valuable resource — and one of your company’s largest investments. Throwing reps into the field without a strategic territory plan is a huge waste of time and energy. 

Poorly designed territories often lead to inefficiencies in how (or where) reps spend their time. This could mean too much time driving between appointments, overlapping account ownership, or unclear rules of engagement. These inefficiencies might seem small but, over time, they can cost your organization far more than you realize.

Confusion over territory assignments disrupts productivity and generates a lower return on investment on your most expensive resource. Every minute your sales team spends not selling is a hit to your wallet.

Internal Friction and Misalignment 

When territories are unclear or perceived as unfair, internal friction is inevitable. Reps will argue over account ownership instead of focusing on growth. Sales managers will spend time mediating disputes instead of coaching or strategizing. Operations teams will focus on reactive strategies instead of long-term plans. 

This misalignment diverts attention away from selling and creates distrust among team members, tarnishing company culture and collaboration. 

Inaccurate Forecasting and Planning 

Territory imbalance doesn’t just impact individual rep performance; it also skews your sales data. When some reps are set up for success while others have dry territories, it’s hard to accurately assess one’s true potential.

Reps may hit quota simply because they are in a high-opportunity area while others may miss their target due to underperforming areas. If territory assignments don’t reflect actual market potential, your data becomes misleading and can distort forecasts, revenue projections, or hiring plans.

These faulty assumptions can evolve into strategic blind spots and put your larger business decisions at risk. 

Damaged Customer Experience 

Last but not least, territory misalignment can also have a negative impact on your prospect and customer community. Unclear boundaries may cause a lead to get passed around multiple reps without clear communication, or a key account might be unintentionally ignored for weeks due to lack of clear ownership. This internal confusion can form distrust and cause valuable relationships to weaken. 

In today’s competitive sales environment, customer experience is paramount. Poor customer service can result in lost deals, reduced renewals, or reputational damage. 

The Bottom Line

Territory planning might be your least favorite task, but’s also one of the most valuable. Poor planning doesn’t just hurt your sales org. It impacts your entire company, customer community, and brand as a whole. The good news? There’s an easy way to improve it.

Territory planning software can help streamline the planning process with visual territory models based on your CRM data. Instead of relying on spreadsheets that don’t tell the full story, a solution like Territory Planner by Ascent Cloud can help you build, balance, and optimize your territories in new and powerful ways. 

Get in touch to learn how to reclaim those hidden costs and improve your territory planning process today.