What it measures
Average deal size is the total booked value of won deals divided by the number of won deals in the same period and segment. It tells you what a typical win is worth, on average, in your sales motion. Sales leaders and founders use it to plan how many deals a target requires, to set pricing and packaging priorities, and to compare segments or reps. It measures booked value at signature, not revenue recognized over time or cash collected.
Explain this formula
Divide the total closed-won amount by the number of closed-won deals. The result is in your currency per deal. In totals mode you enter both figures directly; in list mode you enter each won deal and the calculator adds them up and counts them for you.
List mode adds three readings that totals cannot provide: the median deal (the middle value when deals are sorted), the share of the total coming from the single largest deal, and a warning when the average and median differ by more than 50 %, a sign that a few deals are skewing the average. In both modes, all amounts must be in one currency and on one basis, and with zero won deals the average cannot be calculated.
What each term means
- Input mode
- Enter totals, or list each won deal to also see the median and outliers.
- Where to find it: Choose totals if you only have a sum and a count from a report; choose list if you can export each won deal, which also gives you the median and the largest deal’s share.
- Total won amount
- Total monetary booked value of won deals.
- Where to find it: Sum of the booked amounts of won deals in your CRM for the period and segment, excluding taxes, in one currency. Decide whether you use first-year or total contract value and keep that choice.
- Closed-won deal count
- Number of won deals included in the value total.
- Where to find it: Number of distinct won opportunities included in that total. Count each deal once, even if it contains several products or invoices.
- Won deal amount
- Booked value of one won deal, in the selected currency.
- Where to find it: In list mode, the booked amount of one won deal per row, using the same currency and contract basis for every row.
- Average deal size
- Total won amount divided by the number of won deals.
Worked example
Hypothetical example: a team closed 20 won deals in a quarter for a total booked value of 240,000.
- Average deal size240,000 ÷ 20 = 12,000
Average deal size = 12,000
Average deal size = 240,000 ÷ 20 = 12,000 per deal. If one more deal of 60,000 were won in the same quarter, the total would become 300,000 over 21 deals and the average would rise to about 14,286, although 20 of the 21 deals are unchanged. This is why the median is worth checking when deal values are uneven.
Hypothetical numbers, used to show the calculation. Not real company data.
When and why to use it
Use average deal size when you plan: dividing a target by the average deal tells you roughly how many wins it requires, and dividing again by your win rate tells you how many decided opportunities you need.
It is useful for pricing and packaging decisions. If average deal size falls while the number of wins rises, the team may be winning more small deals or giving larger discounts; if it rises, check whether that comes from broader scope or from a few exceptional contracts.
Compare it across your own segments, products and acquisition channels rather than for the whole business. A single figure that blends small and large customers rarely describes either.
Average deal size versus contract value, and why outliers matter in B2B
The same deal can be recorded at very different values. A three-year subscription worth 12,000 per year can be booked as 12,000 (annual or first-year value) or 36,000 (total contract value). Neither is wrong, but mixing them in one calculation inflates the average and makes periods impossible to compare. Pick one basis, ideally the one your quota uses, write it down and apply it to every deal.
B2B deal values are rarely evenly spread. A handful of large contracts often sit next to many smaller ones, and the average is pulled toward the large ones. In the list-mode example, five won deals of 8,000, 11,000, 12,500, 14,000 and 54,500 average 20,000, while the median deal is 12,500 and the largest deal alone represents 54.5 % of the total. Planning on 20,000 per deal would overestimate what most wins bring.
When the warning appears, do not simply drop the large deal. Report the average and the median together, look at whether large deals come from a distinct segment that deserves its own calculation, and check whether they are repeatable or exceptional before building a plan on them.
How to read and improve the result
A higher average means each win brings more booked value, on average. It is good news when it reflects broader scope or better-fit customers, less so when it comes from one exceptional contract or a shift in how deals are recorded.
Read it alongside the number of won deals and the win rate: a rising average with far fewer wins can leave total bookings unchanged or lower.
Practical levers
- Package complementary products or services so that the value of a typical deal grows with scope.
- Target segments whose needs justify larger engagements, and track them separately.
- Limit discounting through clear approval rules rather than case-by-case concessions.
- Review deals with the median value to understand what a typical win includes.
Common mistakes
- Mixing annual and multi-year contract values in the same total.
- Including taxes, or using invoiced or collected amounts for some deals and booked amounts for others.
- Counting one opportunity several times because it has several products or invoices.
- Planning on the average when one large contract dominates the total.
- Mixing currencies without converting them at a consistent rate.
Scenario comparison
In totals mode, the conservative case lowers the total won amount by 10 % and raises the deal count by 10 %; the optimistic case does the opposite. In list mode, every deal amount moves by 10 %. These are illustrative changes, not predictions.
If you are in list mode, also try removing or reducing the largest deal yourself: the difference shows how dependent your average is on that single contract.
Methodology and limitations
The average is sensitive to outliers. In totals mode the median and the largest deal’s share cannot be computed; use list mode when deal values are uneven.
Booked value is not realized value. Cancellations, refunds, credit notes and unpaid invoices can reduce what is eventually recognized as revenue or collected as cash.
It only describes won deals of the chosen period and segment. It says nothing about deals lost, and a few deals can make short periods volatile.
Frequently asked questions
How do you calculate average deal size?
Divide the total amount of won deals by the number of won deals in the same period and segment. With 240,000 won across 20 deals, the average deal size is 12,000.
Should I use annual or total contract value?
Either can be valid, but use one basis for every deal and every period. Total contract value of multi-year deals produces a much higher average than annual value for the same customers.
Why look at the median deal size?
Because one large contract can raise the average far above what most deals bring. The median is the middle deal and is less affected by such outliers. List each deal to see it.
Should taxes and refunds be included?
Use amounts excluding taxes. Refunds and cancellations affect realized value rather than booked value; if they are frequent, calculate a realized version separately and label it clearly.
What if I have no won deals?
With zero won deals, the average cannot be calculated and the calculator shows no result. Use a longer period or a wider segment to get a meaningful figure.
Is average deal size the same as average order value?
They follow the same logic, total value divided by count, but average order value usually describes individual purchases in e-commerce, while average deal size describes won B2B opportunities that may include several products and a multi-period contract.
Sources
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