Definition
The average annualized revenue value of a single customer contract, commonly used in B2B sales to size deals.
Why it matters for growth
ACV helps a sales team and founder judge deal size trends and set quotas that reflect the actual size of contracts being closed.
Example
A company closes an enterprise contract worth $360,000 over three years, giving it an ACV of $120,000.
FAQ
- What is Annual Contract Value (ACV)?
- The average annualized revenue value of a single customer contract, commonly used in B2B sales to size deals.
- Why does Annual Contract Value (ACV) matter for growth?
- ACV helps a sales team and founder judge deal size trends and set quotas that reflect the actual size of contracts being closed.
- What is an example of Annual Contract Value (ACV)?
- A company closes an enterprise contract worth $360,000 over three years, giving it an ACV of $120,000.