# Territory & Quota Planning Glossary

> Plain-English definitions of TAM, SAM, quota carry, ramp, capacity, whitespace, and the other 20-odd terms that get mixed up in every planning meeting.

Free cheat sheet for sales teams. Topic: [Comp, Quota, Territory & Capacity Planning](https://www.peerlab.ai/library/topic/comp-quota-territory-capacity-planning/). Published by PeerLab in the [Sales Enablement Resource Library](https://www.peerlab.ai/library/). Source: https://www.peerlab.ai/library/territory-quota-planning-glossary/

## How to use it

Keep this open during any planning, comp-design, or capacity conversation and point to a definition instead of debating what a term means mid-meeting.

## What's inside

- 4 market-sizing terms: TAM, SAM, SOM, Whitespace
- 6 territory-design terms: Territory, Territory Carve, Book of Business, Account Segmentation/Tiering, Named Accounts, Account-to-Rep Ratio
- 9 capacity & quota terms: Quota, Quota Carry, Quota Relief, Capacity, Ramp/Ramp Time, Ramped Rep, Coverage Ratio, Attainment, Win Rate
- 8 comp-mechanics terms: OTE, Pay Mix, Accelerator, Decelerator, Draw, Clawback, Split Credit, Windfall
- Every term defined in one plain-English sentence, grouped by theme rather than alphabetically

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.