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Average Contract Value (ACV)
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What is Average Contract Value ?
The Average Contract Value is the amount an average subscription contract is worth to your company. There tends to be less universal consensus on the definition of ACV compared to some other metrics, as some companies include one-time initial charges like setup or training in their ACV calculations, while others do not. For the matter of uniformity, we do not include one-time charges in the calculation of the ACV.
Average Contract Value Formula
ACV = sum(Value of all customer contracts) / (count(Number of customers under contract))
Average Contract Value Unit
Average Contract Value is stated in the unit EUR (€).
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More about Average Contract Value
Average Contract Value (ACV) is a crucial metric for businesses, particularly those operating in the B2B sector, as it provides insight into the average revenue generated from each customer contract over a specified period. Understanding ACV helps companies assess the effectiveness of their sales strategies, set realistic revenue targets, and improve their overall financial planning.
How to visualize Average Contract Value?
The KPI Average Contract Value (ACV) can be visualized as a data card, showing the current value. Or you can use bar charts to see trends and to compare your current value with previous time periods.
Average Contract Value visualization examples
Average Contract Value

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Average Contract Value

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Recommendations to improve Average Contract Value
- Upsell and Cross-sell: Encourage your sales team to upsell and cross-sell to existing customers. Offer them additional features or services that complement their current subscription. This will increase the average contract value and also improve customer satisfaction.
- Introduce Tiered Pricing: Introduce tiered pricing plans that offer more features and benefits at higher price points. This will encourage customers to upgrade to higher plans, increasing the average contract value.
- Offer Annual Subscriptions: Offer customers the option to pay for an annual subscription upfront. This will not only increase the average contract value but also improve cash flow for your company.
- Implement Usage-Based Pricing: Implement usage-based pricing where customers pay based on the number of users or the amount of usage. This will encourage customers to use your product more, increasing the average contract value.
- Provide Customized Solutions: Offer customized solutions to enterprise customers that require specific features or integrations. This will increase the average contract value and also improve customer loyalty.