What is average deal size?
Average deal size is the typical value of a closed deal: total revenue won divided by the number of deals. It is also called average selling price, or ASP.
It is a quiet driver of everything downstream. A larger average deal raises sales velocity, shortens payback at the same cost, and usually signals a move upmarket.
The average deal size formula.
Average deal size = total revenue won divided by the number of deals closed, over a period. Decide whether revenue means first-year value, total contract value, or new ARR, and apply it consistently.
Be clear about which revenue figure you use. A TCV-based deal size will run larger than an annual one for multi-year contracts.
A worked example.
You close 25 deals for 1 million dollars in total. Average deal size is 1,000,000 divided by 25, which is 40,000 dollars.
What is a good average deal size?
There is no benchmark, since deal size is a function of your segment and pricing. A self-serve product closes small deals; an enterprise platform closes large ones. The signal is the direction: a rising average deal size across cohorts means you are winning larger accounts.
Average deal size is per closed deal; ACV annualizes the recurring part. For a multi-year deal, the two are different numbers, so do not use them interchangeably.
How to grow your average deal size.
Move upmarket, sell higher tiers, or bundle more into each deal. Larger and multi-product deals lift the average.
Winning bigger accounts starts with reaching them. Organic search that targets the problems enterprise buyers research brings larger deals into the pipeline. See how we build enterprise pipeline.