GITNUX MARKETDATA REPORT 2024

Statistics About The Average Contract Value

The average contract value is a key measure of central tendency that provides insights into the typical value of contracts in a dataset.

Last Updated: June 20, 2024

Written & Summarized by: Jannik Lindner

How we write

In this post, we explore a comprehensive collection of statistics surrounding average contract values (ACV) and their impact on various aspects of software as a service (SaaS) businesses. From the relationship between ACV and customer acquisition costs to the influence on churn rates and sales cycles, these data points shed light on the dynamics of ACV in the SaaS industry. Join us as we analyze key metrics such as customer lifetime spans, LTV/CAC ratio, profitability, and growth rates based on different ACV ranges to gain valuable insights into the intricacies of pricing strategies and business performance within the SaaS sphere.

Statistic 1

"The median average contact value (ACV) for software as a service (SaaS) businesses is around $21,000 per year."

Statistic 2

"For businesses with an ACV of less than $5,000, the median cost of customer acquisition (CAC) is 98% of the ACV."

Statistic 3

"The companies with higher average contract value (ACV) tend to have longer sales cycles."

Statistic 4

"Companies with an average contract value (ACV) under $5K have a median churn rate of 13%."

Statistic 5

"Firms with an ACV greater than $5k typically spend about 40% of their ACV on sales and marketing."

Statistic 6

"Companies with ACV between $5K-$25K have an LTV/CAC ratio of 3.4 on average."

Statistic 7

"Small businesses with lower ACV's have average customer lifetime spans of 2.3 years."

Statistic 8

"Companies with ACV's of over $50,000 often require executive involvement in the sales process, impacting the sales cycle length."

Statistic 9

"B2B companies with higher average contract value see a lower churn rate, with most having less than 5% annual churn."

Statistic 10

"Median revenue retention rate gets better as initial contract value increases."

Statistic 11

"For SaaS companies with an ACV over $25,000, the median growth rate is 40%."

Statistic 12

"Companies with lower average contract values (under $1K annually) usually sign no-contract or month-to-month agreements."

Statistic 13

"Companies with ACV over $10,000 generally achieve profitability faster than those with lower ACV."

Statistic 14

"SaaS businesses with an ACV under $5,000 have a median lead conversion rate of 27%."

Statistic 15

"The organizations with smaller ACVs (around $6K) typically have higher upsell rates (18-27%)."

Statistic 16

"SaaS companies with an average contract value (ACV) under $5K have an average customer acquisition cost (CAC) payback period of about 13 months."

In conclusion, the statistics gathered on average contract value (ACV) among software as a service (SaaS) businesses offer valuable insights into the dynamics of customer acquisition, sales cycles, churn rates, marketing expenditures, and profitability. Companies with higher ACVs tend to have longer sales cycles and lower churn rates, while also dedicating more of their revenue to sales and marketing efforts. Additionally, businesses with lower ACVs typically experience higher customer churn and lead conversion rates, along with shorter payback periods for customer acquisition costs. Overall, the data underscores the importance of ACV in shaping various aspects of business performance and strategic decision-making within the SaaS industry.

Jannik Lindner

Jannik is the Co-Founder of Gitnux and has been working in the digital space since 2016. He is specialized in content and tech.

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