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Annual Contract Value (ACV)

By Dan Kurtz 1 min read

Annual contract value is the average yearly value of a customer contract. For monthly subscriptions, it’s MRR × 12. For multi-year contracts, it’s total contract value divided by years.

ACV is the primary metric for B2B services and SaaS sales teams because it captures the size of the deal being worked. A team focused on $500 ACV runs differently from one focused on $50K ACV, even if they close the same number of deals.

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