ACV (Annual Contract Value)

The annualized value of a customer contract.

Sales

Ufafanuzi wa

Annual Contract Value is the value of a customer contract normalized to one year. For a 3-year $90k contract, ACV is $30k. ACV is the standard unit for comparing deals of varying contract lengths and forecasting sales performance.

Pointi muhimu

  • ACV normalizes multi-year deals for comparison
  • Different from TCV (total contract value) which sums all years
  • Used in sales compensation and quota setting
  • New ACV vs expansion ACV track new-business vs growth separately
Mfano wa Mfano

A customer signs a 2-year deal at $48k total with year-1 at $24k and year-2 at $24k. ACV is $24k; TCV is $48k.

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