<- Glossary
Sales

Average Deal Size

Table of contents
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Final Thought
FAQs
related metrics
Pipeline Velocity
Total Pipeline Value
TL;DR
Average Deal Size measures the typical revenue amount from a closed-won opportunity. It helps sales teams understand the value of each sale, forecast more accurately, and align sales strategy with ideal customer profiles. In B2B SaaS, it’s a key indicator of whether you’re targeting the right market and pricing your product effectively.

What is Average Deal Size?

Average Deal Size is the mean revenue generated per closed-won deal during a specific time period.

Formula:

Average Deal Size = Total Revenue from Closed-Won Deals ÷ Number of Closed-Won Deals

Example: If your team closes 10 deals worth $250,000 in a month, the average deal size is $25,000.

This metric is typically tracked in:

  • Annual Contract Value (ACV) for subscriptions
  • Total Contract Value (TCV) for multi-year deals
  • One-time revenue for services or fixed fees

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Why It Matters in B2B SaaS

  • It impacts revenue forecasting. Knowing your average deal size helps estimate future bookings based on open pipeline.
  • It informs go-to-market strategy. Are you better suited for SMB, mid-market, or enterprise? Deal size tells the story.
  • It guides pricing and packaging decisions. Consistently small deals may point to underpricing or feature misalignment.
  • It drives sales capacity planning. Bigger deals may need fewer reps to hit targets, but longer cycles.
  • It supports customer segmentation. Segmenting average deal size by industry, channel, or region reveals where the highest-value deals come from.

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How to Measure Average Deal Size

  1. Filter all closed-won deals within the desired time period
  2. Calculate the total revenue associated with those deals
  3. Divide by the number of deals closed
  4. Segment by:
  • Sales motion (inbound, outbound, expansion)
  • Rep or team
  • Customer type (new logo vs. existing)

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Best Practices

  • Track monthly, quarterly, and annually. Trends matter more than one-off spikes
  • Exclude outliers. One huge enterprise deal can skew averages — use medians as a cross-check
  • Compare by segment. Knowing the average for SMB vs. Enterprise helps reps prioritize time
  • Pair with sales cycle and win rate. Larger deals often take longer — but may convert at higher rates
  • Benchmark internally. Average deal size by rep or team can uncover best practices or missed opportunities
Final Thought
Quotes

Average Deal Size is more than a math problem — it’s a strategic lens into how you sell, who you sell to, and what your product is worth. For SaaS teams chasing efficient growth, this metric helps balance volume and value, and refine your ideal customer profile over time.

FAQs
Should this include upsells and renewals?
Only if they are sold as distinct, closed-won opportunities within the sales pipeline.
What’s a good average deal size for SaaS?
It varies by market. SMB SaaS may average $1K–$5K, mid-market $10K–$50K, and enterprise often $100K+.
Can I use this for sales rep performance?
Yes, but context matters. A rep with fewer but larger deals may perform better than one with high volume and low value.
What’s the difference between ACV and TCV?
ACV = annualized revenue; TCV = total revenue over the contract life. Use ACV for recurring SaaS metrics.
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