How to Calculate Average Deal Size
Average deal size measures the typical revenue value of your closed deals. It's essential for forecasting, quota planning, and understanding your market position.
The Average Deal Size Formula
Average Deal Size = Total Revenue / Number of Deals
For SaaS: Track ACV (Annual Contract Value)
Why Average Deal Size Matters
- Revenue Forecasting: Predict future revenue based on pipeline
- Quota Setting: Set realistic targets based on typical deal values
- Market Positioning: Understand if you're moving upmarket or downmarket
- Sales Efficiency: Larger deals often mean more efficient growth
- Resource Allocation: Determine appropriate sales effort per deal
Strategies to Increase Deal Size
- Upsell Existing Customers: Easiest path to larger deals
- Create Premium Tiers: Offer higher-value packages
- Bundle Products: Combine offerings for more value
- Target Larger Accounts: Move upmarket systematically
- Multi-Year Contracts: Increase total contract value
- Value-Based Pricing: Price based on customer value, not cost