Sales glossary

    What is average deal size?

    Also called: Average deal value

    Average deal size is the total value of the deals you won in a period divided by the number of deals won.

    How it's calculated

    Add up the value of every deal you won in a period and divide by the number of those deals. Decide up front what 'value' means: first-year contract value, total contract value and monthly recurring revenue all give different answers, and mixing them makes the number meaningless. Count only won deals; open and lost deals belong in other metrics. Many teams also track the median, because one unusually large deal can pull the average up and hide what a typical deal looks like.

    How to calculate it

    Average deal size = total value of deals won in the period ÷ number of deals won in the period

    Worked example: A rep wins 8 deals in a quarter worth a combined $240,000. Her average deal size is $240,000 ÷ 8 = $30,000.

    Example figures only. Use your own numbers.

    Check your win rate and pipeline coverage in the cold call calculator

    Example

    A team's average deal size has slipped for two quarters. Reviewing calls, the manager finds reps offering a discount as soon as price comes up. The team practices the price conversation, asking what the buyer is comparing against before offering any concession, and tracks the average over the next quarter.

    Why it matters

    Average deal size is one of the inputs that turn a revenue target into a plan. Divide the target by your average deal size and you know roughly how many deals you need to win; combine that with your win rate and you know how many opportunities you need to create. It also explains differences between reps. Two reps can hit the same number with very different mixes of deal count and deal size, and they need different coaching. A falling average can point to discounting, a drift toward smaller customers or proposals that cover less of the problem than the buyer has.

    How reps grow it

    Bigger deals usually come from better discovery, not harder negotiation. When you understand the full scope of the problem, who else it affects and what it costs, you can propose a solution that matches it instead of the smallest package that gets a yes. Practice the questions that widen the conversation, such as 'Who else on your team deals with this?', and practice holding your price when the buyer asks for a discount, since every unearned concession lowers the average.

    Average deal size: common questions

    Should average deal size use the mean or the median?

    Track both if you can. The mean, the usual average, is what you need for revenue planning, but a few very large deals can distort it. The median shows what a typical deal looks like and is better for spotting changes in everyday selling.

    How do you increase average deal size?

    Run deeper discovery so the proposal matches the whole problem, involve the other teams it affects, offer sensible packages or add-ons, and avoid unearned discounts. Upselling and cross-selling to existing customers raises deal value over time too.

    Practice it before it counts

    Run the call this term describes against an AI buyer and get it scored after you hang up. 250 free credits, no card.