Average Contract Value (ACV)
The annualised value of a contract, averaged across a set of deals. The standard unit for comparing new business.
Annualised, which is the point
ACV normalises across contract lengths so a three-year deal does not appear three times larger than an equivalent annual one. Without annualisation, mixing term lengths makes averages meaningless.
Segment it
RELATED TERMS
Pipeline Velocity
A composite of the four variables determining how fast pipeline converts to revenue: number of opportunities, average deal size, win rate, and sales cycle length.
Annual Recurring Revenue (ARR)
The annualised value of recurring subscription revenue at a point in time. A run rate, not a measure of revenue earned during a period.
Average Deal Size
The mean value of closed-won opportunities over a period. An input to pipeline velocity and capacity planning.
Learn how to apply this: RevOps 101: Revenue Operations Foundations
Definitions are the vocabulary. The courses are where you learn to operate it, with the interactive audit tools.
See the course