Average contract value (ACV) represents the average annualised revenue generated per customer contract. It’s a core performance metric for B2B organisations, particularly those operating on subscription or SaaS models. ACV helps gauge deal size, forecast revenue, and segment customers by potential lifetime value.
Marketers use ACV to align campaign strategies with profitability, investing more heavily in acquiring or expanding high-value accounts while optimising spend for smaller deals. It also informs lead scoring, as accounts with higher potential ACV may justify more personalised or resource-intensive engagement.
When tracked alongside metrics like customer acquisition cost (CAC) and customer lifetime value (CLV), ACV becomes a key indicator of business efficiency and scalability. It bridges marketing and sales performance, ensuring that pipeline generation efforts translate into meaningful revenue growth.
