Increases in ACV aren’t free. In order to increase ACV, it means some other metric of importance gets worse; for instance, the sales cycle gets longer, the close ratio comes down, churn can increase, and the number of leads needed to complete a sale increases. Enterprise customers have more layers of management to achieve an approval, more time required to identify the decision maker, and more bureaucracy. It’s not uncommon to see sales cycles of 4 to 6 months for ACV’s over $20k and 6 to 9 months when ACV’s get to $100k+.
ACV is a metric that should be monitored, but don’t change the way you sell in order to artificially increase it. Rather, focus on generating the most revenue you can as cash efficiently as possible. Make sure you’re selling to the ICP and retaining and upselling the customer
Visit us at blossomstreetventures.com and email me directly at sammy@blossomstreetventures.comhttps://blossomstreetventures.com/metrics/
Enjoyed this post?
Share it using the links below.