Blog · Territory, capacity and quota planning
Three ways to set territory quotas, top-down allocation by last year's revenue, bottom-up from rep commitments, and share of potential from the ledger and the norms, what each rewards and punishes, a worked comparison on the same four territories, the identity that the quotas sum to the company target under every method, and why the third method is the only one a rep can check.
Quota season is an argument about method dressed as an argument about numbers. Three methods, one worked comparison on the same territories, and the identity all three must pass. This guide sets them out and says which one a rep can check.
| Method | Quota = | Rewards | Punishes | Rep can check? |
|---|---|---|---|---|
| Top-down by history | last year's revenue × uplift, scaled to target | Standing still | Growth | No: the uplift is arbitrary |
| Bottom-up by commitment | what the rep commits, reconciled up | Sandbagging | Honesty | No: it is negotiation |
| Share of potential | territory potential × (target ÷ total potential) | Working the gap | Nothing; the reach is equal | Yes: account by account |
Account and rep identifiers only.
Σ territory quotas = company target, under every method
Top-down holds it by scaling. Bottom-up usually fails it and is scaled by argument. Share of potential holds it by construction: the share is the target over total potential.
Company target $14.0m. Four territories.
| Territory | Last year | Potential | Rep commits | Top-down (×1.12, scaled) | Bottom-up (scaled to target) | Share of potential (45.2%) |
|---|---|---|---|---|---|---|
| A: mature | $4.0m | $4.9m | $4.1m | $4.5m | $4.6m | $2.2m |
| B: growth | $4.0m | $11.5m | $4.3m | $4.5m | $4.8m | $5.2m |
| C: new hire | $1.5m | $6.8m | $2.0m | $1.7m | $2.2m | $3.1m |
| D: steady | $3.0m | $7.8m | $3.4m | $3.3m | $3.8m | $3.5m |
| Total | $12.5m | $31.0m | $13.8m | $14.0m | $14.0m | $14.0m |
Top-down gives A and B the same quota on the same history, and B's rep has more than twice the room. Bottom-up needed scaling to reach the target and everyone's commitment was moved. Share of potential gives A two point two, because A is nearly full, and B five point two, because B is not, and the rep in B can open the territory potential table and see which accounts and which gaps make up the five.
| Adjustment | For | Stated as |
|---|---|---|
| Ramp | A rep in their first year | Quota × ramp fraction by month, from the team's own curve |
| Known change | A contract won or lost after the potential was set | A dated line with the account |
| Mid-year move | Accounts reassigned | The move record's quota transfer |
Each is a dated line, and the identity still holds after them.
History as the base. Growth punished for a decade.
Commitments as the base. The target never reached; the sandbag rewarded.
Potential without a universe. Mature territories look full because the prospects are not counted.
Adjustments unstated. The identity breaks and nobody knows where.
Mapped once, the ledger, the norms and the universe file produce territory potential, the share that reaches the target, the quotas and the identity, with the adjustments as dated lines. Covirage builds this from the exports as they are. The territory planning solution describes the setup, and the territory potential guide covers the figure the third method is built on.
Because it measures where the rep got to, not where the territory could go. The rep who took a territory from two to four million gets a quota of four and a half; the rep who held a mature territory at four gets the same. One is being punished for growth and the other rewarded for standing still.
It makes every quota the same reach, which is as fair as arithmetic gets. What it does not do is account for a rep's ramp or a known change at a customer, and both are adjustments on top, stated and dated, not reasons to abandon the base.
Whatever share makes the quotas sum to the company target: the target over total potential. It is one number, the same for every territory, and it is what makes the identity hold by construction.