Commerce Glossary

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What is Annual Contract Value (ACV)?

an - nu - al con - tract val - ue
noun
Is an important SaaS metric that represents the average annual revenue per customer contract. The annual contract value is the average value your customer contracts bring in each year. Growing this number can help you grow your business even without attracting more customers. If this number is low, you may need to consider adjusting your pricing or increasing your cross-sell or up-sell efforts. Keep in mind that this number does not reflect your overall revenue or the size of your customer base, so ACV could be very high if you have just a few high-paying customers.

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