ACV
Definition
Annual Contract Value -- the average annualized revenue per customer contract, normalizing multi-year deals to a yearly figure.
ACV represents the annual dollar value of a subscription contract and is used to normalize revenue across contracts of different lengths. A three-year contract worth $300K has an ACV of $100K. ACV is a key input for sales capacity planning, quota setting, and market segmentation. Companies often tier their GTM approach based on ACV -- self-serve for low ACV, inside sales for mid-market, and field sales for enterprise deals.
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FAQ
What does ACV mean?
ACV represents the annual dollar value of a subscription contract and is used to normalize revenue across contracts of different lengths. A three-year contract worth $300K has an ACV of $100K. ACV is a key input for sales capacity planning, quota setting, and market segmentation. Companies often tier their GTM approach based on ACV -- self-serve for low ACV, inside sales for mid-market, and field sales for enterprise deals.
What are the best ACV tools?
Top tools related to ACV: HubSpot, Salesforce, Pipedrive, Attio, Folk.