Average Contract Value (ACV)

Average contract value (ACV) measures the mean dollar value of sales contracts secured over a given time period. ACV can represent new customer deals, renewals, or both. Higher ACVs reflect a company's ability to win bigger, higher tier deals and expand share of wallet within accounts over time.

Monitoring ACV benchmarks sales team success at negotiating and closing large, complex transactions versus many smaller sales. Sudden ACV declines may indicate challenges closing enterprise deals or require discounting. ACV plays an important role in modeling sales productivity and potential revenue. Boosting ACV depends on matching robust solutions to maximum account value.

Back to Glossary