Territory & Quota Planning Glossary

Plain-English definitions for the ~24 terms that get mixed up most in planning meetings, organized by theme so related terms sit together.

Market Sizing

• TAM (Total Addressable Market): The total revenue opportunity if you captured 100% of every possible customer for your product, globally, with no constraints. The dream number, not a planning number.
• SAM (Serviceable Addressable Market): The slice of TAM you could actually sell to today given your current product, geography, and go-to-market.
• SOM (Serviceable Obtainable Market): The realistic slice of SAM you can capture in a given planning period given your actual capacity, competition, and brand awareness. This is what quotas should ladder up to.
• Whitespace: Revenue opportunity inside accounts or segments you already have access to but haven't sold into yet — the gap between what an account could buy and what they currently buy.

Territory Design

• Territory: A defined set of accounts, geography, or segment assigned to a rep or team to sell into.
• Territory Carve: The act of dividing the total market/account universe into territories — the exercise itself, not the result.
• Book of Business: The specific set of accounts (existing customers and/or prospects) a rep owns responsibility for.
• Account Segmentation / Tiering: Grouping accounts (e.g., Tier 1/2/3 or Enterprise/Mid-Market/SMB) by size, potential, or strategic value so coverage model and quota can differ by tier.
• Named Accounts: Specific accounts explicitly assigned to a rep by name (common in Enterprise), as opposed to a geographic or segment-based territory.
• Account-to-Rep Ratio: How many accounts a single rep is expected to cover — the core lever for balancing depth of coverage vs. breadth.

Capacity & Quota

• Quota: The revenue (or bookings) target assigned to a rep for a given period.
• Quota Carry: Whether and how much of a full quota a rep is responsible for in a given period — a ramping rep might "carry" 50% of a full quota in month 3.
• Quota Relief: A formal, documented reduction to a rep's quota for a portion of a period — for parental leave, territory disruption, or a mid-year hire.
• Capacity: The total revenue-generating capability of your sales team, accounting for headcount, ramp status, and vacancies — not the same as the sum of assigned quotas.
• Ramp / Ramp Time: The period a new rep needs to reach full productivity (full quota carry), and the length of that period.
• Ramped Rep: A rep who has completed their ramp period and carries a full quota.
• Coverage Ratio / Pipeline Coverage: The multiple of pipeline needed relative to the target to reliably hit it, accounting for win rate (e.g., "4x coverage" means $4 of pipeline for every $1 of quota).
• Attainment: Actual revenue/bookings closed as a percentage of assigned quota for a period.
• Win Rate: The percentage of qualified opportunities that close as won, out of all qualified opportunities that reach a decision (won + lost).

Compensation Mechanics

• OTE (On-Target Earnings): Total expected annual compensation (base + variable) if a rep hits 100% of quota.
• Pay Mix: The split between base salary and variable/at-risk pay within OTE, expressed as a ratio (e.g., 60/40 base/variable).
• Accelerator: A multiplier that increases commission rate above a certain attainment threshold (e.g., 1.5x commission rate above 100% of quota).
• Decelerator: A multiplier that decreases commission rate below a certain attainment threshold — rare, but used to discourage low-effort deal-chasing.
• Draw: A guaranteed advance against future commissions, usually used during ramp, reconciled once actual commissions are earned.
• Clawback: A contractual right for the company to reclaim already-paid commission if a deal doesn't hold (e.g., customer cancels within 90 days).
• Split Credit: Dividing commission/quota credit for a single deal between two or more reps (e.g., an SDR and an AE, or two AEs on a co-sold deal).
• Windfall: A large payout driven mostly by circumstances outside the rep's actual influence — inbound demand, an inevitable renewal, or pure market timing — rather than by their skill or effort.