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.