What is average deal size?
Average deal size metric indicates the average amount of revenue a business receives per deal they close.
How to calculate average deal size?
To calculate the average deal size, divide the ‘total value of all deals’ in a particular time period by the ‘number of deals’ in that period.
Formula for calculating average deal size
Real-life example of average deal size
Let’s assume you closed 5 deals last month, each valued at $6,000, $5,500, $3,000, $2,500, and $4,500 respectively.
Then, the total value of all the deals will be $21,500. And, your average deal size will be: 21,500/5 = $4,300
What’s an ideal average deal size? (benchmark)
A good average deal size doesn’t have a set benchmark. This metric will greatly vary depending on your number of customers, industry, business model, pricing, economic conditions, and soo much more. You can benchmark this metric for yourself by looking at your previous numbers and that of your competitors.
According to a Hubspot survey, 8.5% of their respondents said their average deal size was $1,000-$2,000.
You might focus on escalating your average deal size from where it is now.
Ways to increase your average deal size
- Filter out poor targets: Target people who are actively seeking your services and discard those with poor buying intentions. This will help you build lasting relationships rather than trying to capitalize on the wrong market.
- Offer upsells and add-ons: One of the most effective ways to increase average deal size is by offering upsells and add-ons to your existing customers. By offering additional services or products that complement your main product or service, you can boost your average deal size and increase your revenue.
- Create bundles and packages: Creating bundles and packages of products can be another great way to increase average deal size. This can be done by offering a discounted price for buying multiple products together, or by creating special packages that include a combination of products. Check out: 13 Product Bundling Examples That Convert