Average Deal Size(ADS)
Quick definition
The average contract value of closed deals over a specific period.
Detailed explanation
Average Deal Size (or Average Contract Value - ACV) is a fundamental metric that influences your business model and go-to-market strategy. It's calculated by dividing total closed revenue by number of deals. ADS determines which sales motion works economically - €5K deals can't support a 6-month enterprise sales cycle, but €500K deals can. It's also a leading indicator of business health - rising ADS usually means you're moving upmarket or upselling better, declining ADS may indicate discounting or downmarket movement. You can increase ADS through: better upselling (multi-year, premium tiers, add-ons), targeting larger accounts (move upmarket), or better value quantification (less discounting). However, higher ADS often means longer sales cycles and lower win rates - it's a trade-off.
Synonyms
Examples
A SaaS company has €25K ADS with 40% win rate and 60-day cycle. They target larger accounts, ADS rises to €80K but win rate drops to 25% and cycle to 120 days. Net: revenue per rep per quarter increases from €200K to €240K → worth it.
Analysis of won deals shows: single-year contracts = €30K ADS, multi-year = €75K ADS. Team starts systematically pitching multi-year with discount incentive. ADS rises to €50K, plus better retention → LTV impact is significant.
When to use this?
Track ADS monthly and segment by product, customer size, and acquisition channel. Set targets for deal size growth, but balance with volume - 2x deal size is worthless if you close 3x fewer deals. Analyze outliers: what did we do differently on mega-deals? How do we replicate that?
Match-day approach
Match-day helps you increase ADS without killing win rate. We train teams in upselling techniques (multi-year pitches, premium features, volume discounts), develop value propositions for enterprise buyers, and build deal expansion plays (start small, land-and-expand). We also help with pricing strategy - often companies can charge 20-30% more when they quantify value well. We also segment your sales motion by deal size - small deals via self-serve/inside sales, large deals via enterprise AEs with longer touch process.
Related terms
Lifetime Value (LTV)(LTV)
The total revenue you expect to generate from a customer throughout their entire relationship with your company.
Win Rate
The percentage of opportunities you win out of all closed deals (won + lost).
Deal Velocity
The speed at which deals move through your pipeline from first contact to closed won.
Learn more
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