Key takeaways
- ASP is revenue from a set of sales divided by the number of those sales.
- Decide whether you measure per unit, per seat or per deal, and keep it consistent.
- A falling ASP with steady volume often points to discounting or smaller customers.
- Dividing a revenue target by ASP tells you how many deals you need.
How do you calculate average selling price
Divide the total revenue from a group of sales by the number of sales in that group. If a team closes 8 deals in a quarter worth £96,000 in total, its ASP for the quarter is £96,000 divided by 8, which is £12,000.
Two choices make the number trustworthy. Fix the period and the set of sales, such as new business closed in the quarter, and use the price after discounts, because that is what the customer actually pays. Leave out one-off oddities, such as a free pilot, or report them separately.
Is ASP the same as average deal size
In most B2B sales teams ASP and average deal size are used to mean the same thing: the average value of a won deal. The terms split when one deal contains many units. A company selling seats might report an ASP per seat of £400 and an average deal size of £8,000 for a 20-seat contract.
Neither is wrong. Pick the one that matches how you sell, label it clearly on every report and do not mix the two in one chart.
Why does ASP matter to a sales team
ASP turns a revenue target into a number of deals, which is the number a sales team can actually plan around. A £480,000 target with a £12,000 ASP needs 40 deals; the same target with a £24,000 ASP needs 20, and a very different amount of pipeline.
ASP is also an early signal. If the number of deals holds steady but ASP drifts down, sellers may be discounting harder or winning smaller customers than the plan assumed. ASP is one of the inputs to sales velocity, so a change in it moves how fast revenue arrives.
What makes ASP go up or down
ASP moves when the price paid per sale changes or when the mix of sales changes. The usual causes are below; check each before deciding the market has shifted.
- Discounting, especially at quarter end.
- Product mix: more sales of a cheaper entry plan or of a premium add-on.
- Customer mix: more small companies or more large ones in the period.
- Contract length: multi-year deals counted at full value raise ASP.
- Bundling services, such as onboarding, into the deal.
How can you raise ASP without losing deals
The most reliable way is to sell to customers who need more of what you offer, rather than pushing the price up for everyone. Tighten your ideal customer profile towards companies with more users or more complex needs, and prospect there first.
Then protect price inside each deal. Agree discount rules that need a manager's approval past a set level, offer a clear tiered package so buyers can choose more, and tie any concession to something you get back, such as a longer contract.
Where Pebbles Ai fits
Common questions
Does ASP include discounts?
It should. ASP is most useful when it reflects the price customers actually paid, so calculate it from the discounted deal value rather than the list price.
Should ASP include renewals?
Usually not in the same figure. Most teams track ASP for new business and report renewal or expansion values separately, because they behave differently.
What is the difference between ASP and ARPU?
ASP is the average value of a sale. ARPU, average revenue per user, is the average recurring revenue each customer or user brings in over a period, so it includes customers you won long ago.
About this page. Written by the Pebbles Ai team for people who run sales, marketing and growth. Last updated .
