Should we organize our sales team by region or industry? And how do we scale without slowing things down?
If you’re asking these questions, you’re not alone. Sales leaders everywhere know that structure determines outcomes. Get it right, and your team moves faster, closes more deals, and delivers a better buyer experiences. Get it wrong, and confusion creeps in, reps slow down, and opportunities slip away.
Choosing the right sales organization structure is one of the most strategic decisions a sales leader can make. Here’s what you need to know to get it right.
Why does sales team structure matter?
Sales team structure is more than just an org chart. It shapes how your team goes to market, how smoothly they work together, and how buyers view your company.
The right structure keeps your reps focused, aligned, and clear on what matters. It also gives your customers a consistent experience no matter who they’re talking to. The wrong structure slows things down and leaves teams second-guessing about who owns what.
But sales structures aren’t fixed. As your business evolves, your structure should, too.
What is a territory-based sales structure?
In a territory-based structure, your reps own opportunities and accounts within defined geographic regions. This setup works best if your company has a broad customer base, sells products that require local support, or needs to navigate regional differences.
For example, a rep covering Texas must understand regional energy markets and local procurement norms. A rep in Quebec must speak French and comply with local language laws.
Territory-based sales structure pros and cons
Territory models come with clear benefits. Your reps can personalize outreach by attending local events, understanding budget cycles, and tracking which competitors are active in the area. Travel and logistics are also easier. Reps covering metro areas like Chicago or Atlanta can bundle meetings and reduce downtime between visits. And with clear account ownership, there’s less conflict and fewer coverage gaps.
But there are tradeoffs. Without industry alignment, it’s harder for your sales reps to tailor messaging or navigate complex buying cycles. Territory sales structures also limit specialization. When a rep owns all product lines across a region, it’s harder to go deep on a specific use case.
And not all regions are equal. Some of your reps might inherit territories packed with high-value opportunities. Others may get areas that require more effort for fewer returns. This imbalance can lead to frustration and burnout.
What is a vertical-based sales structure?
In a vertical-based structure, companies assign accounts by industry rather than geography. One rep might focus on healthcare, another on manufacturing, and a third on financial services. This setup works best if your company sells complex products, targets accounts in regulated industries, or needs deep subject matter expertise to close deals.
For example, a financial services rep might need to comply with regulations like FINRA and PCI. A healthcare rep must understand HIPAA compliance and how hospital systems make purchasing decisions.
Vertical-based sales structure pros and cons
Vertical sales models make it easier for your reps to tailor messaging using industry-specific insights that speak directly to buyer pain points. This builds trust and establishes credibility, especially in complex sectors. Your reps are also more likely to spot patterns and apply what works across similar accounts.
Vertical sales structures also come with challenges. Conflicts come up when industries and regions overlap. For example, one of your reps may think they own an account based on industry, while another claims it based on location.
Sales onboarding also takes longer, especially in niche markets where reps need to build expertise before they sell well. And in smaller verticals, your reps may struggle to build pipeline consistently.
Territory vs. Vertical: Head-to-Head Comparison
| Criteria | Territory-Based | Vertical-Based |
|---|---|---|
| Market Coverage | Broad geographical reach | Deep industry alignment |
| Sales Cycle Complexity | Simpler | More complex, consultative |
| Rep Expertise | Regional knowledge | Industry specialization |
| Scaling | Easier in early steps | More effective at scale |
| Conflict Management | Clear by geography | Needs coordination across regions |
Is a hybrid sales structure the best of both worlds?
Because territory and vertical sales models both have clear advantages, many companies combine them. In a hybrid model, you might assign SMB reps to regions so they can respond quickly and offer local knowledge. At the same time, your enterprise reps might focus on industries where deep expertise is required. You may also split large regions by vertical. For example, your healthcare team might cover the West, while your finance team covers the East.
Pros and cons of a hybrid approach
Hybrid setups are great when you need to move fast but still want reps with deep industry expertise. You get the local coverage you need without sacrificing expertise where it matters most.
That said, hybrid models work best when sales, operations, and enablement stay tightly aligned. Without that coordination, sales reps overlap or miss out on the support they need. But when done right, hybrid structures give you the best of both worlds: the regional depth of a territory model and the industry expertise of a vertical one.
What’s the best sales team structure?
There’s no one-size-fits-all approach. Instead, the right sales team structure depends on your product, your market, and where you’re headed next.
If you’re just getting started, a territory-based model is a good place to start. It’s simple, effective, and helps your sales reps get into the field quickly. Regional assignments also reduce conflict and keep your team focused.
If you’re mid-market, start layering in verticals. Maybe your product performs especially well in insurance or banking. Maybe certain reps have great industry experience. Introducing vertical specialization helps your team build momentum without disrupting what’s already working.
If you’re a mature or enterprise company, consider a hybrid model. With multiple product lines and buyer types, you’ll need the flexibility to balance regional coverage and industry expertise.
No matter your stage, revisit your structure often. Markets shift. Teams evolve. Regulations change. Revisiting helps you stay ahead and keep deals moving. To figure out your next move, examine data on win rates, deal sizes, and sales cycle length. If something’s off, your structure might need a second look.
What are common sales structure mistakes to avoid?
Choosing the right sales structure is important, but how you implement it matters just as much.
Making things too complex too early
When you’re just starting out, it’s tempting to build a structure that covers every possibility. But complexity slows teams down and jeopardizes deals. Instead, start simple and add layers only when you need them.
Assigning verticals without the right support
If you want reps to specialize, give them what they need to succeed. That means access to industry content, training, and data. Without proper support, vertical models fall flat.
Uneven coverage across regions or industries
Some reps end up with regions full of high-value accounts. Others get stuck in low-volume territories. To help your team stay motivated, keep things fair so everyone has a real shot at hitting their numbers.
Not evolving your structure as things change
To stay competitive, your go-to-market strategy must evolve alongside your business. If your structure stays the same, your team will miss out on new opportunities and sales operations will suffer.
Need help choosing the best sales team structure?
Territory models offer simplicity and speed. Vertical models build credibility and focus. Hybrid models give you flexibility but only with tight alignment.
There’s no one-size-fits-all approach. But the right structure helps your team move faster, close smarter, and scale with confidence. The opportunity is there. You just need the right structure to unlock it.
Ready to see how structure affects your bottom line? Try our sales enablement ROI calculator or book a demo with our team today.
