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Acronyms Dictionary

ACV

Definition

Annual Contract Value. A metric that represents the average annual revenue value of a single customer contract.

Deep Dive

ACV is a key sales and customer success metric, particularly for subscription-based businesses (SaaS). It measures the average revenue generated from a single customer contract over a 12-month period. Unlike ARR, which looks at the total revenue across all customers, ACV focuses on the value of individual accounts.

Examples & Use Cases

  • 1Calculating that a $36,000 three-year contract has an ACV of $12,000
  • 2Comparing ACVs across different sales territories to identify high-performing regions
  • 3Setting sales quotas based on the expected ACV of new target accounts

Related Terms

ARRTCVLTV

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