How to calculate average deal size
Average deal size is the mean revenue per closed deal. It feeds forecasting, capacity planning, and pricing strategy. The main pitfall is that a handful of outsized deals can distort the average, so always look at the median alongside it.
Short answer
Calculate average deal size by dividing total closed-won revenue in a period by the number of deals closed. For example, 500,000 dollars across 25 deals is a 20,000 dollar average. Watch the median too, since a few large deals can pull the average up and hide what a typical deal really looks like.
Step by step
Sum closed-won revenue
Add the value of all deals closed-won in the period. Decide upfront whether you use annual value, total contract value, or first-year value, and stay consistent.
Divide by deal count
Divide by the number of deals closed to get the mean.
- Average deal size = total closed-won revenue / deals closed
- Also calculate the median deal size
- Pick one revenue basis (ACV, TCV, first year) and keep it
Check the median
Compute the median as well. A large gap between mean and median means outliers are skewing the average.
Segment by product and segment
Break it down by product, segment, and channel to see where larger deals come from and where you could push size up.
Use it to plan
Feed average and median deal size into pipeline coverage, quota, and capacity math so targets rest on realistic deal economics.
How Ardovo helps
Ardovo reports both average and median deal size, sliced by product, segment, and rep, so Rook can show whether a rising average is real growth or one whale distorting the picture, and where deal size could be expanded.
Frequently asked questions
Should I use average or median deal size?
Use both. The average is easy to roll into planning math, but a few large deals can inflate it. The median shows what a typical deal really looks like. When mean and median diverge sharply, trust the median for day-to-day expectations.
Which revenue figure should I use for deal size?
Pick one basis and apply it consistently: annual contract value, total contract value, or first-year value. Mixing them across deals produces a meaningless average. ACV is the most common for recurring-revenue businesses.
How do I increase average deal size?
Sell to larger segments, bundle or add products, multithread to reach budget owners, and lead with value rather than discounting. Segmenting deal size by product and segment shows where the biggest expansion opportunities sit.